The Cameron government in the UK is busy testing the hypothesis that the way to economic recovery from a severe recession is to drastically reduce government spending.
How is that working out? Not so well, according to the latest information from the Financial Times. While the government is touting GDP growth in the first quarter of this year, it is only 0.5%. That offsets the previous quarter's decline of 0.5% and shows the British economy essentially treading water.
Britain's opposition finds the performance unimpressive. Mr. Balls, the chancellor of the shadow (opposition) government in waiting, observed that Chancellor Osborne “doesn’t seem to understand that without jobs and growth you can’t get the deficit down. The slower growth, higher unemployment and higher inflation we now see under George Osborne means he is now set to borrow £46bn more than he was planning to. That’s a vicious circle and makes no economic sense at all.”
Regrettably, our own deficit hawks seem bent on leading us down the same path.
By the way, the "austerity will get us out of recession" hypothesis has been tested before. We tested it in 1929. Japan tested it in the 1990's. It doesn't work.
Wednesday, April 27, 2011
Tuesday, April 26, 2011
Ford Ascendant
Ford Motor Company today reported its first quarter net income was $2.6 billion, or 61 cents per share, a $466 million increase from first quarter 2010. Pre-tax operating profit was $2.8 billion, or 62 cents per share, an increase of $827 million from first quarter 2010. Ford also reported it had posted a pre-tax operating profit for seven consecutive quarters.
This is not just good news for Ford. It is good news for a particularly effective style of management, advocated by one of America's great innovators.
After a bad experience with an automobile built by one of Ford's domestic competitors, I read that Ford had hired W. Edwards Deming as a consultant on quality. Not long afterward, I bought a 1987 Taurus and have purchased Ford products ever since.
It wasn't that I thought Deming could magically and immediately bring Ford up to the quality of the Japanese auto makers to whom he gave advice not long after WWII. It was rather that I thought his hiring told me that Ford was now taking quality seriously. That meant a lot.
It turns out, Deming paid no attention to the details of Ford's quality control procedures. He examined Ford's management. It is management, he insisted, that is responsible for 85 percent of a company's problems with quality.
Problems don't lie to any significant degree with the workers, and cannot be corrected by the workers. Slogans and exhortations don't work, he insisted. Instead, he concentrated on changing the culture of management.
Good for Ford.
I'll have more to say later about some of Deming's ideas and how they might help address some of our problems in government and politics.
This is not just good news for Ford. It is good news for a particularly effective style of management, advocated by one of America's great innovators.
After a bad experience with an automobile built by one of Ford's domestic competitors, I read that Ford had hired W. Edwards Deming as a consultant on quality. Not long afterward, I bought a 1987 Taurus and have purchased Ford products ever since.
It wasn't that I thought Deming could magically and immediately bring Ford up to the quality of the Japanese auto makers to whom he gave advice not long after WWII. It was rather that I thought his hiring told me that Ford was now taking quality seriously. That meant a lot.
It turns out, Deming paid no attention to the details of Ford's quality control procedures. He examined Ford's management. It is management, he insisted, that is responsible for 85 percent of a company's problems with quality.
Problems don't lie to any significant degree with the workers, and cannot be corrected by the workers. Slogans and exhortations don't work, he insisted. Instead, he concentrated on changing the culture of management.
Good for Ford.
I'll have more to say later about some of Deming's ideas and how they might help address some of our problems in government and politics.
Momentous Events
This Friday, April 29, 2011, two momentous events taking place an ocean apart will probably dominate television.
Early that morning east coast time, the world will be treated to the spectacle of the royal wedding of Prince William and Kate Middleton.
That afternoon, we will see the final launch of space shuttle Endeavor, commanded by Captain Mark Kelly, husband of Congresswoman Gabby Giffords, who was shot in the head last January by an attempted assassin. Congresswoman Giffords is expected to attend the launching. Oh, by the way, so will President Obama.
By far the most momentous of those events will be the presence of Congresswoman Giffords at the launch of Endeavor.
My guess is that the largest TV audience will be that of the wedding.
A question for the bean counters among us: which event cost their nations the most - the wedding or the space launch?
I have no idea.
Early that morning east coast time, the world will be treated to the spectacle of the royal wedding of Prince William and Kate Middleton.
That afternoon, we will see the final launch of space shuttle Endeavor, commanded by Captain Mark Kelly, husband of Congresswoman Gabby Giffords, who was shot in the head last January by an attempted assassin. Congresswoman Giffords is expected to attend the launching. Oh, by the way, so will President Obama.
By far the most momentous of those events will be the presence of Congresswoman Giffords at the launch of Endeavor.
My guess is that the largest TV audience will be that of the wedding.
A question for the bean counters among us: which event cost their nations the most - the wedding or the space launch?
I have no idea.
Monday, April 25, 2011
Church and State II
In the late 1940's, I attended Star School, a rural grade school about eight or ten miles east of Oklahoma City.
In addition to reciting the Lord's Prayer every morning, we had other religious instruction.
The most memorable was the annual visit by an itinerant preacher, who addressed the student body on the importance of religion, the evils of smoking, and related subjects.
At one point in his presentation, the preacher asked if any student could recite the golden rule. He offered a quarter to anyone who could do so. Hands shot up, usually hands of eager boys anxious to win the quarter. The preacher would call on the boys in turn. None ever won the quarter.
The only way to win, it turned out, was to recite the King James translation of Matthew 7:12 - "whatsoever ye would that men should do to you, do ye even so to them." No variations allowed.
I don't recall that he required the rest of the verse, where Jesus is quoted as saying: "for this is the law and the prophets." That is, this is the essence of Judaism, and by implication, the essence of Christianity.
Sounds like altruism to me. Maybe those who claim to be Christians and also followers of Ayn Rand should reexamine their position.
In addition to reciting the Lord's Prayer every morning, we had other religious instruction.
The most memorable was the annual visit by an itinerant preacher, who addressed the student body on the importance of religion, the evils of smoking, and related subjects.
At one point in his presentation, the preacher asked if any student could recite the golden rule. He offered a quarter to anyone who could do so. Hands shot up, usually hands of eager boys anxious to win the quarter. The preacher would call on the boys in turn. None ever won the quarter.
The only way to win, it turned out, was to recite the King James translation of Matthew 7:12 - "whatsoever ye would that men should do to you, do ye even so to them." No variations allowed.
I don't recall that he required the rest of the verse, where Jesus is quoted as saying: "for this is the law and the prophets." That is, this is the essence of Judaism, and by implication, the essence of Christianity.
Sounds like altruism to me. Maybe those who claim to be Christians and also followers of Ayn Rand should reexamine their position.
Sunday, April 24, 2011
Church and State
Today's Washington Post addresses the history of church and state in America, as one of their "Five Myths" series. Today it was "Five Myths about Church and State."
It is worth reading.
When I was in grade school in rural Oklahoma, we routinely recited the Lord's Prayer. This never raised any opposition, because so far as I know, all of the students came from white, anglo-saxon protestant families.
I never noticed that reciting the prayer had any beneficial effect on student conduct, but neither did it seem to do any harm in that setting.
I learned one thing from the exercise - Methodists prayed for forgiveness of their trespasses, and Presbyterians prayed for forgiveness of debts. Maybe that's why, at least in our community, the Presbyterians seemed more prosperous.
It is worth reading.
When I was in grade school in rural Oklahoma, we routinely recited the Lord's Prayer. This never raised any opposition, because so far as I know, all of the students came from white, anglo-saxon protestant families.
I never noticed that reciting the prayer had any beneficial effect on student conduct, but neither did it seem to do any harm in that setting.
I learned one thing from the exercise - Methodists prayed for forgiveness of their trespasses, and Presbyterians prayed for forgiveness of debts. Maybe that's why, at least in our community, the Presbyterians seemed more prosperous.
US Behind in Percentage of Small Business-Who Knew?
Everyone seems to agree that the US is a beacon to the rest of the world when it comes to encouraging small business. Everybody seems to be wrong.
A report from the Center for Economic and Policy Research comparing major industrial countries shows we are way behind.
Why are there so many more small businesses in other countries?
The center speculates that the reason is that the other countries all have some form of universal health care, which removes an important economic obstacle to businesses.
A report from the Center for Economic and Policy Research comparing major industrial countries shows we are way behind.
Why are there so many more small businesses in other countries?
The center speculates that the reason is that the other countries all have some form of universal health care, which removes an important economic obstacle to businesses.
National Strategy
This morning on CNN, Fareed Zakaria disclosed and discussed a new strategic vision for the United States contained in an article by "Y," the pseudonym used by two military officers on the JCS staff.
The article is intended to be a twenty-first century replacement for George Frost Kennan's "X" article published in 1947 in Foreign Affairs. Kennan's article proposed the strategy of "containment," which dominated US strategic thinking for the next four decades. (Kennan himself objected to what he described as the "militarization" of containment).
The newly proposed Strategic Narrative suggests replacing "containment" with "sustainment." The authors describe it as follows: "The primary approach this Strategic Narrative advocates to achieve sustainable prosperity and security, is through the application of credible influence and strength, the pursuit of fair competition, acknowledgement of interdependencies and converging interests, and adaptation to complex, dynamic systems all bounded by our national values."
I'm skeptical that this new article will prove to provide adequate strategic direction for America's future, but I agree that we need to broaden our vision concerning national security beyond military power and punitive measures. I'll have more to say later.
The article is intended to be a twenty-first century replacement for George Frost Kennan's "X" article published in 1947 in Foreign Affairs. Kennan's article proposed the strategy of "containment," which dominated US strategic thinking for the next four decades. (Kennan himself objected to what he described as the "militarization" of containment).
The newly proposed Strategic Narrative suggests replacing "containment" with "sustainment." The authors describe it as follows: "The primary approach this Strategic Narrative advocates to achieve sustainable prosperity and security, is through the application of credible influence and strength, the pursuit of fair competition, acknowledgement of interdependencies and converging interests, and adaptation to complex, dynamic systems all bounded by our national values."
I'm skeptical that this new article will prove to provide adequate strategic direction for America's future, but I agree that we need to broaden our vision concerning national security beyond military power and punitive measures. I'll have more to say later.
Friday, April 22, 2011
Earth Day
Today, April 22, is Earth Day 2011.
A week ago, while I was watching Dr. Strangelove at the Old Theater in Oriental, the scene where General Jack D. Ripper described the commie plot to threaten our precious bodily fluids reminded me of an event during the first Earth Day in 1970. I remembered being told by my destroyer squadron commander that the event was a "commie plot." It was obviously a communist plot, he explained, because Vladimir Lenin was born on April 22, the day of the Earth Day celebration. Even more significantly, he emphasized, Lenin was born April 22, 1870, so the first Earth Day was in celebration of Lenin's centenary.
Not exactly.
In fact, the first Earth Day was organized by Senator Gaylord Nelson of Wisconsin, a long-time environmental activist. April 22 was selected because that spring it came on a Wednesday, and wouldn't be a day taken off just to have a long weekend.
As for Vladimir Ilich Ulyanov, later known as Lenin, April 22 1970 wasn't exactly his birthday, either. He was born in Russia, which used the old style Julian Calendar until after the 1917 Russian Revolution. In England and America, which used the Gregorian calendar since 1752, Lenin was born on May 4, 1870. The calendar discrepancy is why the Soviet Union always celebrated the October 1917 revolution in November.
Anyhow, Earth Day never had anything to do with Lenin.
A week ago, while I was watching Dr. Strangelove at the Old Theater in Oriental, the scene where General Jack D. Ripper described the commie plot to threaten our precious bodily fluids reminded me of an event during the first Earth Day in 1970. I remembered being told by my destroyer squadron commander that the event was a "commie plot." It was obviously a communist plot, he explained, because Vladimir Lenin was born on April 22, the day of the Earth Day celebration. Even more significantly, he emphasized, Lenin was born April 22, 1870, so the first Earth Day was in celebration of Lenin's centenary.
Not exactly.
In fact, the first Earth Day was organized by Senator Gaylord Nelson of Wisconsin, a long-time environmental activist. April 22 was selected because that spring it came on a Wednesday, and wouldn't be a day taken off just to have a long weekend.
As for Vladimir Ilich Ulyanov, later known as Lenin, April 22 1970 wasn't exactly his birthday, either. He was born in Russia, which used the old style Julian Calendar until after the 1917 Russian Revolution. In England and America, which used the Gregorian calendar since 1752, Lenin was born on May 4, 1870. The calendar discrepancy is why the Soviet Union always celebrated the October 1917 revolution in November.
Anyhow, Earth Day never had anything to do with Lenin.
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