Category Archives: economy

Us vs It—Part VI, This better work

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This is the third day that Missouri is open for business and our lives haven’t changed here on our quiet street. The people at our house haven’t been tested yet and we don’t know anyone who has been. Our two hospitals offer testing. Maybe we’ll go see one of them soon. Columbia has five locations. Osage Beach has one. We mention those places because a lot of Jefferson City people work in Columbia, or will when the University reopens. And a lot of Columbia people work in Jefferson City now that state government is getting back to the new abnormal. A lot of these folks never quit working, of course. They just haven’t been in their offices. But we’ll be watching case numbers in Boone and Cole Counties, in particular, because of the numbers of people who pass each other going in opposite directions twice every day on Highway 63. And we’ll be watching case numbers in Camden County and Osage Beach because the reopening means tourism season has begun.

Governor Parson, the state health director, and various other state and private entities have assured us in the daily briefings that Missouri’s most critical numbers have been declining for the last two weeks, one of the main measurements needed to reopen. We’ve been assured the state is ready to quickly respond to hot spots such as meat packing plants in California and St. Joseph (St. Joseph had only one testing station when we checked the list last Sunday and California has none) and Marshall (which has one).

We have welcomed the Governor’s daily briefings. They have been examples of the kinds of Coronavirus briefings adults should conduct and we appreciate the recent change that allows reporters to be present instead of submitting questions. That’s important because answers often lead to other questions and the old system didn’t provide that opportunity very well.

We understand the growing pressure on states to reopen for business but the lack of a vaccine and the admission that the virus has not and will not go away leaves us nervous. The YMCA reopened on Monday with a lot of precautionary policies put into place to keep us safe. We haven’t resumed our three-times-a-week morning workouts yet although we miss our friends a great deal. We’ll go back soon, just not right now.

Our church isn’t going to go back to in-person worship services until the first Sunday in June. I don’t know that we’ll go to a restaurant or to a movie theatre anytime soon. We both plan to wear our masks for awhile any time we go someplace where a lot of people are visiting or shopping.

We are going to tiptoe into the world, not dash into it.

We want things to be okay. We want to be able to be with friends. We want our working friends to get their jobs back.

Your faithful observer has kept a journal since March 28th and it is unlikely that journal will stop anytime soon. Our wish is that there be little to add to it but we’re keeping it going into autumn, into the next flu season and, if the scientists are correct, into the second wave of this virus.

To be candid, we suspect reopening the state and the nation is as much a political decision as it is anything else. But reopening has to occur, or had to occur, sooner or later and most of the people in positions to decide when reopening is appropriate and safe (enough) recognize the responsibility they are assuming by giving the go-ahead. It seems to us from having watched the daily briefings from our capitol that the reopening order has not been hastily or easily given.

We do hope there are thresholds in place that will determine when stay-at-home orders will be put back in place.

If you’ve read these entries this year you know we spent a lot of time looking at what happened with the last great pandemic, the Spanish Flu of 1918-19, and while our abilities to fight a pandemic are better than they were, the shortcomings in response that we have seen leave us nervous.

We don’t think our governor would unlock the doors if he didn’t think it was safe to go out and responsibly conduct ourselves and our business.

But this is bad stuff and more Americans died from it in April than died in the entire Vietnam War and it is still on the loose.

This reopening better work.

 

Us vs It—part IV, Best guess

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(Before we get to the main point of today’s missive, your constant observer must confess that he feels a slight fever and has trouble breathing every time he hears the phrase “new normal.” He would quickly recover if the political and media leaders more accurately referred to the next positive step as the “new ABnormal.”   Likewise, he would be interested to see if President Trump could communicate without using the word “beautiful,” including the usual hand gestures.)

Legislative leaders, last we heard, are still thinking of reconvening the session on the 27th despite concerns by some members that the recall will be happening just about the time some analysts say Missouri will hit its Coronavirus peak.

Several issues could be before the House and Senate but the biggest one is the state budget for the fiscal year that starts July 1. The Missouri Constitution says the legislature must adopt a budget by the next-to-last Friday of the session, in this case, May 8.

Our lawmakers face complicated and sad choices. Today we are going to try to explain how our state government has no good alternatives and why. Please stay with us because this will be a long class.

Here’s some history of why the Missouri Constitution requires passage of a budget a week before legislative adjournment and what that means in today’s circumstances.

Last nights of legislative sessions were usually quite wild until 1988. We recall when the legislature adjourned at midnight and the last budget bills, “Midnight Specials,” some called them, hit the floor minutes before the deadline. Chaos might not be an adequate word to describe those minutes when the legislature rushed to pass last minute budget bills. The fact that everybody was exhausted and not a few were feeling the effects of early celebration of the session’s end added to the disorder.

But in 1988, Article 3, Section 25 of the Missouri Constitution was changed to say, “No appropriation bill shall be taken up for consideration after 6:00 p.m. on the first Friday following the first Monday in May of each year.” That left the session’s final week for consideration of regular legislation, created a less chaotic ending, let members get home to their families before midnight and let the reporters file their stories before sunrise the next morning. Your faithful correspondent thinks it was one of wisest laws ever enacted in the state of Missouri. Until then, members of the General Assembly had a tendency NOT to go home after midnight adjournment but to go out to the Ramada Inn after midnight and get really serious about celebrating. And it often was sunrise or later before he could go home from his Missourinet newsroom.

If the General Assembly fails to enact a budget by the deadline, what happens? If economic uncertainty makes it unrealistic to adopt a reasonably realistic budget during the regular session, the Constitution allows the governor to call a special session to get a budget done for the fiscal year starting July 1. The General Assembly also could call itself back. But it will be easier for the governor to do it, and he would. The legislature has never operated a budget on the basis of a continuing resolution, as Congress too often has done, so it is unlikely to take that strategy—-which (to a non-lawyer) seems to be unconstitutional in Missouri anyway.

A special session in June is not unprecedented.

The legislature in 1997 failed to appropriate money for Health and Mental Health, nor did they appropriate money for their own salaries as well as those of judges and statewide officials. That last problem arose when legislators argued they could not appropriate money for themselves and others until they have approved funding for everybody else. Governor Carnahan called a special session that, we recall, started right after the regular session adjourned so the last two budget bills could be approved. It took six days to do it because the legislative process of introducing and passing bills takes a little time.

In 2003, Governor Holden and the legislature got into a big snit and he vetoed appropriations bills for education and social services. He called a special session in June that was unproductive. With time running short, he called another one. The legislature told him to take it or leave it. He finally signed appropriations bills for elementary, secondary, and higher education on the last day of the fiscal year.

Special sessions usually cost more than six figures a week, mostly for legislative travel expenses and per diem payments. However, the expenses of one this year would be significantly reduced by savings realized by the shutdown of the legislature from mid-March until late April—except for the couple of days lawmakers returned this month to pass the important supplemental appropriations bill.

After the legislature approves a budget and the governor signs it, he will have to make sure the state does not fall into constitutionally-forbidden deficit spending. Given what is likely to be an indefinite period of economic uncertainty, it would not be surprising for the governor to sign a budget but withhold funds from various services and programs to make sure the budget remains in balance for the entire fiscal year. He can announce spending restrictions when he signs the budget and he can make adjustments throughout the year, although the later in the year he makes them, the harder it is for agencies and their employees to deal with them.

Under the circumstances any budget the legislature approves is likely to be only a best guess.

Governor Parson will have to adjust it downward, if necessary, to keep it in balance. We have seen examples of that within the last few days when the governor withheld $228 million in the current budget because the diving economy makes the amount of money available for the fourth quarter uncertain.

Education has a tendency to absorb the biggest share of cuts and withholds. Here is why.

Joe and Josephine Missouri might have trouble understanding why it’s so painful to make cuts in the state budget of almost $30.1 BILLION dollars proposed by Governor Parson in the flush days of January. If you are a Joe or a Josephine, we hope we can help you understand some important things about that thirty-BILLION dollars.

The legislature can decide how to spend only about one third of that money and even then it is limited in what it can do.

More than ten billion of those dollars come from the federal government for state-run federally-financed programs.

Another ten billion dollars is considered “other” funds. Those are funds that are dedicated to specific purposes. Gas tax money that goes for our road and bridge system is one example. The Conservation Sales tax money that funds our wildlife areas and Conservation Department programs is another. The special sales taxes that help fund our state parks system and help limit soil erosion is another one. Gambling proceeds that fund a tiny part of education. The legislature can’t fiddle with those because the Missouri Constitution sets them outside of legislative control.

That leaves $10,431,666,579 that the governor’s budget proposal said was under control of the state. But even that is not fully in play because other state mandates require funding for some things. One-third of that ten-Billion goes to Elementary and Secondary Education under the statutory formula for funding K-12 education. Other mandated spending eats up another $5.108-Billion.

So out of that thirty-billion dollars-plus, the legislature actually only has $1.881,921,936 to play with, if you will. But remember, that’s the figure the governor recommended back in January when the restaurants and malls and theatres and bars were open and we could go wherever we wanted to go.

When big budget withholdings have to be made or when cuts have to be made—as they have been and will be—that $1.9 billion dollars is the place to cut. That’s only six percent of the entire proposed budget.

Of that $1.9 Billion dollars, two state departments consume $1.102 Billion—Higher Education and Social Services. The next two are Elementary and Secondary Education ($136 million), and Corrections ($107 million). That chews up about $1.345 Billion of that $1.9 Billion dollars. But there are five other state agencies. The governor proposed $365 million to fund them. There’s another $166 million that falls into the “other” category. A good chunk of those “other” funds go to Elementary and Secondary Education and Social Services with relative pocket change scattered through several other agencies.

In his COVID-19 daily briefing on April 9, Governor Parson was pretty direct. “We’re gonna have to rebuild the budget,” he said. His January proposal is junk because of the pandemic.

It is likely the best-guess budget for the programs and services all of us use will take some really painful reductions for the fiscal year starting July 1. Everybody is going to be hurt to some degree. Programs already dealing with serious problems are going to be dealing with even bigger ones.   The biggest programs are going to take the biggest hits because that’s where the money is. People are going to lose jobs. People relying on those programs will struggle even more than they struggle now.

The people we elect to work for us are facing the possibility that they will have to hurt many of us. Do not think that when they show up at the Capitol on the 27th, or whenever the decision is made to reconvene the legislature, that they will not anguish about what they have to do.

If you were in their place, which of YOUR neighbors would you choose to hurt even more than they already are hurting?

Most of us can rage against our circumstances. These folks are the ones we have chosen to get beyond rage and do something about the circumstances facing us. They will have no easy choices.

Us vs. It—part III, Re-opening Day

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This is the third or fourth version of this entry from your faithful observer as he has struggled to keep up with our President and his ping-pong positions on the pandemic.

We started with the anticipation that President Trump would be convening a task force to look at when he can proclaim the country re-opened for business. He called it the biggest decision of his life. Within seventy-two hours he had amplified his position, asserting that he and he alone could order the lifting of social distancing and other policies put in place by the nation’s governors.

Now, after several governors have suggested rather clearly that he didn’t know what he was talking about, he has decided he’s going to “authorize” each governor to reopen states as the governors see fit. This is a big CYA effort (or if you prefer a more elevated phrase, a face-saving effort) and governors are likely to maintain that they don’t need his “authorization” either.

The way things are going, this entry could be out of date before sundown. But we’re going ahead anyway.

The President is under a lot of pressure to get the economy moving again. Some of that pressure is coming from Wall Street, which is highly-important to him personally as well as politically.

The Washington Post reported a few days ago that the Trump Organization had laid off 1,500 people and closed seventeen of its twenty-four properties in various parts of the world because of the virus. Based on previous Trump financial disclosures, says the newspaper, the closed properties generate about $650,000 a day. The organization’s payments on leases and property taxes are coming due or are past-due.

Some of this is increasingly political. He needs a big economic turnaround before the Republican National Convention opens in Charlotte, North Carolina on August 27. He needs the virus to be gone and a major economic resurgence to talk about at the convention and in the weeks before the election. He can continue deflecting criticism of his handling of the epidemic to someone else—as he already has in pointing a finger at China, Congress, Democrats, the Obama Administration, governors, and the World Health Organization. But by late August, he’ll have a hard time generating enough other boogeymen to deflect enough blame away from an administration that had taken exclusive credit for the growing economy and now wants no criticism for its sharp decline.

While he now seems willing to let governors decide what is best for their states, we’ll be watching to see if this new attitude also includes better assistance to the states in the recovery. As we have heard, he has blamed governors for their lack of protective equipment for healthcare workers.

Actually, we were looking forward to a possible legal donnybrook between the governors and the President if he had maintained his position that he has the exclusive power to reopen state economies. We do wonder if his new position still includes part of his previous statement that if he disagrees with a governor’s actions or lack of them, “I would overrule a governor, and I have a right to do it.”

We all know what could happen if he tries to overrule a governor, don’t we? What will the President do if a governor refuses to be overruled? Will he withhold federal disaster aid? That won’t win many friends or votes. Will he sue the states or the governors? Will the states and their governors sue him?

Our Governor Parson, asked on Monday about the President’s remarks about exclusive powers, said the President “well-knows the authority of the states.”  He said he’s not worried.” We might have to go back to the early days of World War II to find a governor who suddenly has so many things on his plate.

The President still hopes something good for him can happen on May 1. He seems to be one of the few who thinks that date is realistic.

Here’s an outlook for Missouri is concerned:

Leaders of the Missouri legislature hope to re-convene the General Assembly on April 27. Governor Parson said yesterday that would be okay with him as long as they maintain social distancing—as they did last week when they passed the supplemental budget bill. Some projections underline the governor’s cautionary note.

The University of Washington’s Institute for Health Metrics and Evaluation, which has been cited in several White House Coronavirus briefings, a few days ago lowered the anticipated death toll from the virus at 61,545, quite a drop from a possible 240,000 suggested earlier. It says social distancing is the key to the lower number. But while the 61,545 was the hard number we read about and heard about, the institute admitted it was only an estimate, somewhere between 26,487 and 155,311 in its modeling.

We checked the projection graphs a few hours before posting this entry. The institute has increased its projected death total to 68,841 with the 68,841st death coming on June 28. The hard number falls in a bracket of 30,188 and 175,961.

The forecast estimated that on May 1, the nation’s hospitals will need 49,891 beds, 10,937 in intensive care, and 8,953 invasive ventilators. It suggests 976 people will die that day.

Not a good day to reopen the country. We expect the modeling will changes from day to day as new statistics are fed into the system.

The IHME’s latest forecast is for Missouri’s peak day is April 29, just one day before May 1, two days after the legislature convenes. The good news is that no bed shortages or ICU space shortages are forecast. But we will need 313 ventilators. The institute forecasts that we’ll be averaging 50 deaths per day by then, part of an anticipated total of 1,712 with the 1,712th death coming on June 16. That’s the hard number forecast so far. The institute model says that’s within a range of 420 and 5,557.

Governor Parson has said more than once that he’s making decisions about re-starting the economy based on Missouri-specific data. He needs a lot more of it. Our testing numbers, although growing, are not impressive and Missouri as well as other states are going to have to have large improvements in testing to make a safe determination of when stay-at-home orders should be lifted and social distancing standards should be eased.

The President realizes that the opposition gains more ammunition each day the virus creates a new hot spot, each day that first responders are overwhelmed, every day that doctors and nurses are exposed to the virus because they lack the personal protective equipment they need. He knows, or should know, that declaring the company open is a great risk if the virus is still killing significant numbers of people each day.

Governors also must be aware that easing the protective steps they have ordered could backfire on them, many of them facing re-election this year. The autumn flu season will have started by the election in November. The autumn sports seasons will draw thousands of people to distances far less than six feet, elevating the danger of a new virus surge. The last thing the President or the governors need is a flare-up of COVID-19 ten days or fewer before the election.

A popular song during World War I proclaimed, “We won’t come back ‘till it’s over, over there.” The lyric can change to fit our times: “We won’t come back ‘till it’s over, over here,” with a new definition of “come back” and another new definition for “it.”

 

 

Us vs. It—part II, Waist deep

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At the height of the Vietnam War one of the nation’s greatest folk singers began performing an allegorical song called “Waist Deep in the Big Muddy.”

When Pete Seeger performed it on the Smothers Brothers Comedy Hour more than fifty years ago, the song became part of a national controversy because many people, apparently including the CBS censors, thought that the next-to-last verse criticized President Johnson’s increasing investment of American lives in what some already thought was an unwinnable war.

It didn’t help that Seeger was among those blacklisted during the McCarthy Era (he was part of The Weavers, the group that brought folk singing to early popularity. But the group was too liberal for McCarthyites) and he was still considered somewhat “leftist,” therefore, “subversive.”

The CBS censors cut the song out of the show but when Seeger performed it on a later program—one of the last in the show’s brief run—it was allowed to stay in, perhaps because of the public reaction to its deletion the first time.

We keep hearing President Trump talk about the need to re-open the country or to get big-time sports going again even as he also says we’re headed for the deadliest part of the Coronavirus assault. The shutdown of a part of the economy—the hospitality industry—is a big blow to his personal interests and reopening the country, as he likes to put it, would certainly be to his benefit. We make the observation without implying that he is driven only by his personal economic concerns but his insistence that reopening business in the wake of the ongoing pandemic brings Pete Seeger’s song from another era to mind. It was the next-to-last verse that got Seeger and the Smothers Brothers in trouble then and it might get this observer in trouble today, at least with some people. Have at it in the comment area at the end if you wish—either way. Just remember our civility guidelines.

Waist Deep in the Big Muddy

It was back in nineteen forty-two,
I was a member of a good platoon.
We were on maneuvers in-a Louisiana,
One night by the light of the moon.
The captain told us to ford a river,
That’s how it all begun.
We were — knee deep in the Big Muddy,
But the big fool said to push on.

 

The Sergeant said, “Sir, are you sure,
This is the best way back to the base?”
“Sergeant, go on! I forded this river
‘Bout a mile above this place.
It’ll be a little soggy but just keep slogging.
We’ll soon be on dry ground.”
We were, waist deep in the Big Muddy
And the big fool said to push on.

 

The Sergeant said, “Sir, with all this equipment
No man will be able to swim.”
“Sergeant, don’t be a Nervous Nellie, ”
The Captain said to him.
“All we need is a little determination;
Men, follow me, I’ll lead on.”
We were, neck deep in the Big Muddy
And the big fool said to push on.

 

All at once, the moon clouded over,
We heard a gurgling cry.
A few seconds later, the captain’s helmet
Was all that floated by.
The Sergeant said, “Turn around men!
I’m in charge from now on.”
And we just made it out of the Big Muddy
With the captain dead and gone.

 

We stripped and dived and found his body
Stuck in the old quicksand.
I guess he didn’t know that the water was deeper
Than the place he’d once before been.
Another stream had joined the Big Muddy
‘Bout a half mile from where we’d gone.
We were lucky to escape from the Big Muddy
When the big fool said to push on.

 

Well, I’m not going to point any moral,
I’ll leave that for yourself
Maybe you’re still walking, you’re still talking
You’d like to keep your health.
But every time I read the papers
That old feeling comes on;

We’re, waist deep in the Big Muddy
And the big fool says to push on.

Waist deep in the Big Muddy
And the big fool says to push on.
Waist deep in the Big Muddy
And the big fool says to push on.


Waist deep! Neck deep! Soon even a
Tall man’ll be over his head, we’re
Waist deep in the Big Muddy!
And the big fool says to push on!

https://www.youtube.com/watch?v=uXnJVkEX8O4

We are not implying in this entry that President Trump is “the big fool” of today’s “war.” That would be name-calling and we do not believe name-calling either solves problems or ennobles the person who has nothing of intrinsic value to otherwise add to a conversation.

A blogger, Chimesfreedom*, has a nice piece about Seeger’s performance of the song on the Smothers Brothers Comedy Hour. Tom and Dick Smothers were constantly at war with the CBS censors and Seeger’s performance of the song on their season-opening show in 1967 led to a loud public fight about censorship.

http://www.chimesfreedom.com/2014/01/28/the-censored-pete-seeger-performance-on-the-smothers-brothers-comedy-hour/

The brothers’ constant fight with CBS about the content of their show led the network to abruptly cancel it, despite good ratings, after just two years. It was replaced by Hee-Haw.

Chimesfreedom is a blog with an unnamed “editor-in-chief” who describes himself as “a writer and professor in New York.”

Jefferson City vs. the Pandemic, 1918—II

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A look back at the Spanish Influenza pandemic of 1918 might help us understand how the Coronavirus could run its course in 2020. There are some important things to remember, however. First, Jefferson City, a town of about 14,500 people, had one hospital, St. Mary’s, which was adequate under normal circumstances but faced the same issues today’s hospitals are facing. The other thing to remember is that in 1918 there were no vaccines available or on the horizon. Quinine, which gained popularity in the 1830s thanks largely to Arrow Rock Dr. John Sappington, was tried as a medicine in 1918 but showed no indication that it helped.

In many cases, what happened then is happening now. But in many other ways, today’s conditions, cures, and treatments are a far cry from what our parents, grandparents, and great-grandparents faced.

In recounting these sad and tragic days in 2020’s nervous and uncertain days, we hope we are not leaving the impression that the Coronavirus will have the same course or the same deadly results. Although health officials are struggling to find a cure, medical care is more than a century advanced from the days of the Spanish influenza. It is obvious now that it is likely to be with us for a while and we are likely to lose some people. But we are better prepared today because we know what happened long ago.

It was a bittersweet time. The Great War was ending about the time the Spanish Influenza was at its peak.

A new concern entered Jefferson City discussions in mid-November, 1918 when the National Tuberculosis Association voiced fears the flu epidemic could lead to substantial increases in tuberculosis, perhaps as much as ten percent for the next two years. The NTA said the influenza “weakens a person’s physical vitality and lowers a person’s resistance to the disease.”

The first case of the flu in the penitentiary led to an immediate quarantine reported by the local press on November 17. The first inmate death was reported.

When Mrs. Will Ruprecht died November 20th, the funeral at her home was private “on account of influenza restrictions.”   Home funerals were common in those days before Jefferson City had its first funeral home.

Thirty-nine new cases in two days in the city was considered a “slight falling off” from the previous week but there had been four deaths in the last four days.

The State Board of Health sent around word on November 21 that it would be okay for cities to remove the “more or less drastic measures” intended to limit the disease’s spread. The next day the city had 25 new cases of the influenza.

The day the controls were lifted in Jefferson City, a two year old boy died. The next day, “a beautiful young life went out” when a popular 24-year old woman “just budding into sweet womanhood” died at her home. Robert F. Mueller, “an excellent harness maker,” died the next day and police posted ten more placards on the doors of home signifying they were quarantined. The week ending November 22 saw 173 new cases. The next week the total dropped to 109. People were dying daily and the Federal Public Health Service reported the number of cases nationally was approaching 350,000. The Missouri Capitol was fumigated a second time.

It was December now, likely the longest six weeks in city history.

Community Nurse Ruth Porter, now recovered from her bout with the flu, said her case load had was double what it was in October. Fortunately, the Council of Clubs had bought a car for her to use in her home visits. She had 34 people under her care as of December 13.

The State Prison Board reluctantly admitted more than 100 flu cases behind the walls. State Health Board Secretary George H. Jones reported the state’s October death total of 3,145 represented half of all deaths in Missouri.

The Red Cross was looking for a building that could accommodate patients when St. Mary’s Hospital couldn’t handle any more. The hospital’s own annex became the spill-over building, capable of holding 25 additional patients.

“I am astounded at the death rate of this epidemic,” said the former Assistant State Highway Engineer J. P. Davis, an experienced sanitary engineer who believed in disinfectants. He suggested all of the back yards in town be cleaned up and disinfected. He also suggested the city use a flushing tank filled with a germicide “rather than men with brooms” to clean the streets.

The penitentiary got a gallon of pneumonia serum from the Mayo Sanitarium in Rochester, Minnesota, and quickly inoculated all of the convicts. It was too late for seven of them. Three days later the total was 13 inmate deaths.

But there seemed to be a glimmer of good news when the city’s doctors reported new cases were down fifty percent although the death of Oscar Walther at St. Mary’s Hospital put the city death total into the thirties.

The Daily Capital News asked, “Isn’t it time the state of Missouri was giving some attention to the health of its citizens? It is a sad commentary upon our humanity that we give more thought and spend more money on the health of hogs and cattle than we do upon men and women. The Board of Health has no power to do anything and no money to do anything with.” It was a valid point, but a state health department was not created until a new constitution was adopted almost thirty years later.

Four days before Christmas, the prison announced the deaths of three more inmates raised the total dead there to 22. A study of the fatalities showed 17 of those inmates had been in the prison for less than a year. The penitentiary blamed local jails because, “Many of the prisoners come to the penitentiary run-down physically and are in no condition to have the influenza.” The seriousness of the situation in the prison became apparent with the prison doctor’s end-of-the year report. The prison hospital usually had 20-30 admissions a month and a total of only 32 in October and November. In December it was 459. The final death toll was 26 inmates from pneumonia resulting from the flu.

An important sign that the flu was abating came when the school board decided to reopen schools on December 31. They’d been closed since October 10 and the school days would be lengthened by 45 minutes in an effort to catch up the students on their learning before graduation in late May.

St. Mary’s Hospital reported at the end of the year it had handled 154 flu cases. Forty-one patients had died during the year, “25 were brought in in a dying condition,” most likely influenza victims, many with flu-caused pneumonia.

By the end of January the city death toll was at least 34, fifteen of them people who died at home, plus the 26 prison inmates. Many other deaths were reported throughout the county.

On February 20, 1919, St. Mary’s Hospital caught fire. All 35 patients were removed safely, some taken to the top floor of the Governor’s Mansion and the rest housed in the 14-room vacant mansion of the late Jacob F. Moerschel a Jefferson City brewer who donated the land on which the hospital was built. The fourth floor of the hospital was destroyed, as was the roof, and the rest of the building was heavily damaged by water. A $75,000 fund-raising effort was started to rebuild the hospital, which served the city until 2014 when a new St. Mary’s opened.

The flu made a small comeback in March but by early June, Community Nurse Ruth Porter was reporting “General health conditions have never been half as good as they are now.”

Except—-

Tuberculosis cases resulting from the influenza epidemic were increasing in “staggering” proportions.

The city, the state, the nation survived the worst epidemic in American history up to that time in 1918-19. Most of the great-great-grandchildren of those who were victims of and survivors of the great Spanish flu epidemic will survive the Coronavirus epidemic in 2020. But we know from history that we might be facing a weeks-long struggle. Many will be sick. Some will die.

And then life will go on—as it did after the great pandemic of 1918-1919.

Let America Be America Again

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For many people, America has never been as great as some have nobly proclaimed it to be or proclaim to have made it. Again.

It’s good. But great? Yes, for some. For others, no. Can it be great if it is not great for all? We explore that issue today through the words of a great Missouri writer.

Langston Hughes is considered one of the nation’s greatest African-American authors, a Joplin native whose poetry and prose spoke powerfully of the African-American experience from the time his great grandmothers were slaves to the days when segregation was still a powerful and widely-accepted social institution. He died in 1967, still writing about what this country was but aware of what it could be or should be.

In 1935, he wrote a poem that portrayed the two Americas—the one he dreamed would come with a counterpoint describing the America he knew.

In our turbulent times today, it’s a good idea to think about Langston Hughes, who hoped for a better country while the real world around him seemed far from it. His voice from 85 years ago is a voice for many in these times and a challenge for others who are comfortable with their station.

Let America Be America Again

Let America be America again.
Let it be the dream it used to be.
Let it be the pioneer on the plain
Seeking a home where he himself is free.

(America never was America to me.)

Let America be the dream the dreamers dreamed—
Let it be that great strong land of love
Where never kings connive nor tyrants scheme
That any man be crushed by one above.

(It never was America to me.)

O, let my land be a land where Liberty
Is crowned with no false patriotic wreath,
But opportunity is real, and life is free,
Equality is in the air we breathe.

(There’s never been equality for me,
Nor freedom in this “homeland of the free.”)

Say, who are you that mumbles in the dark?
And who are you that draws your veil across the stars?

I am the poor white, fooled and pushed apart,
I am the Negro bearing slavery’s scars.
I am the red man driven from the land,
I am the immigrant clutching the hope I seek—
And finding only the same old stupid plan
Of dog eat dog, of mighty crush the weak.

I am the young man, full of strength and hope,
Tangled in that ancient endless chain
Of profit, power, gain, of grab the land!
Of grab the gold! Of grab the ways of satisfying need!
Of work the men! Of take the pay!
Of owning everything for one’s own greed!

I am the farmer, bondsman to the soil.
I am the worker sold to the machine.
I am the Negro, servant to you all.
I am the people, humble, hungry, mean—
Hungry yet today despite the dream.
Beaten yet today—O, Pioneers!
I am the man who never got ahead,
The poorest worker bartered through the years.

Yet I’m the one who dreamt our basic dream
In the Old World while still a serf of kings,
Who dreamt a dream so strong, so brave, so true,
That even yet its mighty daring sings
In every brick and stone, in every furrow turned
That’s made America the land it has become.
O, I’m the man who sailed those early seas
In search of what I meant to be my home—
For I’m the one who left dark Ireland’s shore,
And Poland’s plain, and England’s grassy lea,
And torn from Black Africa’s strand I came
To build a “homeland of the free.”

The free?

Who said the free?  Not me?
Surely not me?  The millions on relief today?
The millions shot down when we strike?
The millions who have nothing for our pay?
For all the dreams we’ve dreamed
And all the songs we’ve sung
And all the hopes we’ve held
And all the flags we’ve hung,
The millions who have nothing for our pay—
Except the dream that’s almost dead today.

O, let America be America again—
The land that never has been yet—
And yet must be—the land where every man is free.
The land that’s mine—the poor man’s, Indian’s, Negro’s, ME—
Who made America,
Whose sweat and blood, whose faith and pain,
Whose hand at the foundry, whose plow in the rain,
Must bring back our mighty dream again.

Sure, call me any ugly name you choose—
The steel of freedom does not stain.
From those who live like leeches on the people’s lives,
We must take back our land again,
America!

O, yes,
I say it plain,
America never was America to me,
And yet I swear this oath—
America will be!

Out of the rack and ruin of our gangster death,
The rape and rot of graft, and stealth, and lies,
We, the people, must redeem
The land, the mines, the plants, the rivers.
The mountains and the endless plain—
All, all the stretch of these great green states—
And make America again!

Langston Hughes reminds us from generation to generation we have much work to do before we should proclaim ourselves great. Proclamation is cheap. Achievement of greatness is hard and the quest for it should be never-ending if we really want to create, “the land that never has been yet—and yet must be.”

It not a matter of “again.”  It’s a matter of “yet.”

Whose Money Is It?

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—OR, how a $2 fee is having a multi-million dollar negative economic impact in Missouri.

This entry will be lengthy because we have to use a lot of numbers to make our point.

A number of bills changing Missouri’s gambling laws have been filed for this year’s legislature. But we wonder if any of them should be considered until a significant problem with one of our existing laws is corrected because it has turned into a growing economic drain on our state.

Regular consumers of these pages know that the author has been advocating a fee increase for the casino industry to pay for the creation of a National Steamboat Museum.

As we’ve researched that issue we have come across a lot of interesting other issues and concerns. We passed some of them along to the House Interim Committee on Gaming that met this fall. In some cases we think we have some answers but here’s one where we don’t. Maybe some of our lawmakers will try to provide some. Or maybe somebody will ask the court system to do look into things. Our voice, however, is puny compared to the politically influential voices of a large, wealthy, and politically persuasive industry.

First, the scenario.

In 1993, the legislature required the casinos to pay the state two dollars for each admission on their proposed riverboats. Our first two casinos opened for business in the spring of ’94 and they paid the two dollars, no problem.

Our casinos have paid the two dollars in each fiscal year since. They are obeying the law.

But there’s this thing called inflation.

In the second fiscal year of casino gambling in Missouri, the inflated value of two dollars was $2.05 and the purchasing power of two dollars dropped to $1.95. In the fiscal year after that the equivalent value of two 1993 dollars was $2.11; purchasing power was down to $1.90. (Our numbers come from the Federal Bureau of Labor Statistics.)

We get into some higher mathematics now. Our casinos paid the state in fiscal 1994-95 a total of $25,216,862, a very healthy increase in state general revenue. But if they had paid the state the inflated value of the two dollars, they would have paid the state an additional $702,172.

Whose money was the $702,172? The 1993 law does not say anything about casinos being able to keep what we refer to as “windfall profits.”   In fairness, the law does not prohibit casinos from keeping that money, either.

We were around then, covering the legislature, and don’t recall any concerns that the day would come when two dollars wouldn’t be worth two dollars. Trying to determine legislative intent at this great distance could be difficult although there are a lot of people still around who were serving in 1993 and voted on that bill who might recall what it was.

Fast forward to fiscal year 2018-19 that ended last June 30. Our thirteen casinos paid the state $75,000,634. But the inflationary value of the 1993 two dollars had risen to $3.48 (and it’s $3.53 for this fiscal year). Had the casinos paid the state in contemporary equivalent dollars, they would have paid the state about $55.6 million more than they did. Instead, they kept the money. The total windfall profits after twenty-six years of unadjusted two-dollar payments had reached $888.5 million as of June 30.

Whose money is it?   And whose money SHOULD it be?

Neither side seems to be protected by that 1993 law.

Compounding this question is the continued decline in purchasing power of the two dollars our casinos pay the state. It was down to $1.15 in the most recent fiscal year. The total loss of purchasing power since our casinos opened had reached $944.2 million.

The combined total of dollars the casino industry has kept because of windfall profits and the loss of purchasing power of the two dollars the industry did pay represented an economic deficit to the state during those twenty-six years since the two-dollar fee was established of almost $1.833 Billion as of June 30.

Now the question becomes even more acute: Once again, Whose. Money. Is. It?

There are some other questions, too. Why wasn’t anybody paying attention, either at the gaming commission or in the legislature? The casino industry probably was because it was reaping the benefits but should the industry have stepped forward and said, “Hey, legislature, this two-dollar fee thing is making us a lot richer while the programs intended to be funded by the two dollars are getting poorer and poorer?”

It was under no legal obligation to do so.

Now, with the accumulated negative economic impact after more than a quarter-century of casino gambling nearing Two Billion Dollars, shouldn’t somebody start trying to determine whose money this really is?   Should these windfall funds have been set aside in some kind of an escrow account until somebody decided who is entitled to them? Nothing in the law requires that.

A complicating factor is that the customers of casinos do not pay the fee. It comes out of casino revenues, the money casinos win from the customers. When the law was passed in 1993, it was still assumed there would be boats on the rivers making two hour cruises for which customers paid two dollars. They would get off the boat at the end of two hours and a new group would get aboard (and those wishing for another two hours on the boat would get back on board), each paying two dollars. But when the present system of boats in moats ended any thoughts of customers paying to enter the casino, the decision was made for casinos to pay the state two dollars per person with a new count being made every two hours. That’s how casinos wound up with 37.5 million admissions last year in a state of only six million people, most of whom don’t go to casinos. No customer pays anything.

That means the two dollars is not a pass-through from customers to the state, in effect a user fee. It is now a fee charged to the casinos and it is paid out of their money. (Their adjusted gross receipts in the last fiscal year were more than $1.735 Billion.)

If it is the casino industry’s money, is it the industry’s responsibility to make sure the two dollars going to the state are worth two dollars to the programs and entities that the fee was intended to pay for? If the two dollars are worth only $1.15 to the receiving entity, are they really the “two dollars” promised them by the statute?

The law says two dollars. Period. No inflationary adjustments are mentioned. And the casinos have done what most of us would have done (and what we might have done in certain circumstances)—if there’s money left on the table and nobody else claims it and if it’s MY table, it’s my money.

It is time to answer the questions. Here are the main reasons why.

The two dollar admission fee is split with one of the dollars going to the host city of the casino and the other dollar going to the state gaming commission which takes its budget out of those funds and then divides the remainder among a handful of worthy causes. The biggest worthy cause is the Missouri Veterans Commission Capital Improvements Trust Fund that provides money for nursing homes and cemeteries for our veterans.

Last fiscal year, each of those dollars had the purchasing power of 57.5 cents. The value is down another penny this year. Five years ago, the figure was 61 cents. At this rate, it won’t be long before the casinos are making more money from the two-dollar admission fee that was intended to offset the additional costs to host cities of a casino’s presence and to fund the gaming commission and its worthy causes benefiting veterans, college students, and programs for people who get in trouble because they gamble.

Nothing in the law says they can’t.

Nothing in the law says they can.

Whose. Money. Is. it? And—

Whose. Money. SHOULD. It. Be?

Who can answer the question? The state auditor? The attorney general? The legislature?

No matter what happens with our steamboat museum idea, isn’t it time to find an answer for our veterans, our college students getting scholarships under a program funded by admission fees, problem gamblers looking for help from a program financed by these fees, and our casino host cities?

Here are some additional figures that seem to bold-face the need to address this situation. It has been a long time since our high school bookkeeping class so we hope there is not a flaw in this reasoning. But here it is.

The state received $75,000,634 in admission fees in the last fiscal year. But because of the lack of inflationary adjustment in the two-dollar fee, it did NOT receive $55,600,438 more. That was the windfall profits that the casinos kept. The inflation-caused loss of buying power meant the $75 million the state did get was worth only $42,375,358, a loss of $32,625,276. Here is what it all adds up to:

If we add the amount of money that the casinos kept to the amount of lost purchasing power in the money the state got, the total is $88,225,744.

That means the state of Missouri and the home dock communities in the last fiscal year saw an economic DEFICIT of $13,225,110. Our analysis shows the unadjusted admission fees have produced annual economic losses to the state for the past five years totaling almost forty-eight million dollars.

That economic deficit is on track to almost DOUBLE in the current fiscal year.

In the first six months of this fiscal year (July-December) the economic loss was $$12,201,732—almost as much as all of last fiscal year. Why? Although admissions are down four percent from last year, the value of the two-dollars in contemporary money is more and the purchasing power of the money the state has received is less. The windfall profit so far this year is $28,285,835. The purchasing power loss for those six months is $20,890,844, a combined total of $49,176,680. The two-dollar fee has produced a payment of only $36,974,948.

At least, that’s how it appears from our calculator. And that’s why it is time for the General Assembly to take corrective action, despite this being a campaign year in which the well-financed casino industry can exert great pressure to keep millions flowing into its accounts while the programs the admission fee was created to pay for are victims of a rapidly rising negative economic impact. As long as that $2 fee is not adjusted, the casinos get richer and the programs and entities the fee was intended to finance get poorer.

The casinos want the legislature to let them take bets on sporting events, a new type of wagering that some expert testimony in last autumn’s committee hearings say could increase their revenues by hundreds of millions of dollars a year. Why should it be unrealistic to think the admission fee problem should be solved before these thirteen businesses are allowed to haul in even more dollars through sports wagering?

The casino industry probably would prefer this boat not be rocked, this sleeping dog not be awakened, this pot not be stirred. Its reasons are understandable. But for the others, isn’t it time somebody rocked the boat, awakened the dog, and got busy stirring?

Food for thought

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We stopped in Terre Haute, Indiana on our annual trip to cover the Indianapolis 500 for the Missourinet and as we nibbled on our bad-for-us hamburger and fries, we found an article in the local newspaper, the Tribune-Star, by Morton J. Marcus that we know will upset the Missouri Farm Bureau and other farm-advocacy organizations, Governor Parson, our friends at the Brownfield network, and numerous other people who continue to advocate for something Marcus thinks is an anachronism: agriculture as an important part of Missouri’s (and Indiana’s) economy.

We offer this as food for thought in a changing world—which has an unchanging reliance on the subject on which Marcus’ appears to have some relevant points. You are welcome to add your grains of thought to his observations in our “comments” section.

The article appeared in the Tribune-Star on May 22. It was published in the Indianapolis Business Journal the next day.

Last week, the governor of Missouri was interviewed on NPR and stated that farming was the number one industry in his state. I’ve heard the same claim from Indiana politicians. In fact, one Hoosier solon claimed farming was “the backbone of Indiana’s economy.” I responded, “Every corpse has a backbone.”

Why do people in Missouri and Indiana believe such exaggeration? Perhaps, at one time (in the 19th century) it was true. Farming does take up a lot of the land we see when traveling from one place to another. Plus, the farm lobby is still disproportionately strong.

How important is farming? Folks from Purdue love to say, “If you eat, you’re are part of farming.” Oh, so true! Plus, if you eat, you’re part of trucking, dentistry, and waste disposal.

Let’s look at three different measures not provided by the biggest farm lobby of all, the U.S. Department of Agriculture:

First, value added, the part of Gross Domestic Product (GDP), our basic measure of economic activity, attributed to Agriculture nationally (including farming, forestry, fisheries and hunting) is 0.8%, or 19th of 19 private sector industries. Number one is (drum roll… ) real estate, rental and leasing at 13.3%, followed by manufacturing at 11.4% of GDP.

To be blunt, total value added from farming is less than 0.8% of the U.S. economy. What will the farm lobby say? “Well, you’ve got to remember farmers buy lots of stuff and lots of money passes through their hands that wouldn’t be spent if we didn’t have farming.”

No one is talking about not having farming! That’s the argument of a child, not an industry. We measure economic activity as the value of the goods sold less the value of goods purchased. That’s what we call value added. And the sum of value added by all economic activity in the marketplace is GDP.

For Missouri, agriculture (Ag) is 1.1% of the state’s GDP. For Indiana, Ag is 0.9% of the state’s GDP. In each of those two states, Ag is 19th of the 19 major private sector economic activities in GDP. Only in South Dakota does Ag exceed 5% of the state’s GDP.

Second, personal income, the sum of earnings, rent, dividends, interest, and transfer payments (Social Security, Medicare, unemployment compensation, etc.) are received by — guess who? — persons. Farm earnings are net of the expenses of farmers, but include government subsidies. How many carpenters, janitors, teachers, surgeons can say the same?

In the nation, farming accounts for 0.4% of total personal income. In Missouri, the figure is 0.46%, in Indiana 0.33%.

Third, jobs. Farming, fishing and forestry account for a lofty 0.34% of jobs in the U.S., 0.18% in Missouri, and 0.12% in the Hoosier Holyland.

These are data for 2018. Not 1820, which might have been the source for the governor of Missouri. They are from the U.S. Bureau of Economic Analysis and the U.S. Bureau of Labor Statistics, not the fake news agents working in the speech-writing cubicle of every statehouse.

A couple of observations from your, uh, loyal observer:  I grew up in a farming community, on a five-acre farm. We rented our pasture to people with horses. I spent summers baling hay and cutting weeds out of Illinois bean fields in the days before pre-emergent herbicides.  Today, it seems, the phrase “small family farm” is a phrase for a time long gone.  HOWEVER, there is no doubt that the people who farm, whether they are a dwindling number of individuals or operations that have become corporations for various reasons, raise the food that feeds a growing population.  But whether agriculture is the “backbone” of our state’s economy in the 21st Century is an issue that Morton Marcus has rightfully raised.  Perhaps it is time to find a new defining phrase for the importance of agriculture.  But in doing so, we cannot forget that this industry that is a shrinking part of our total GDP is the source of our food.

A modern assessment of the economic value of agriculture in the greater scheme of the nation’s economy does not violate the old bumper sticker that says, “Don’t criticize agriculture with your mouth full.”  If anything, the comments from Marcus should make us appreciate, on a personal level, the importance to our well-being of agriculture in whatever business model its participants follow.

(Who is this Morton J. Marcus fellow?  He writes entertaining, informative, and sometimes provocative columns, a compilation of which you can find at https://howeypolitics.com/Content/Columns/Morton-Marcus/10/23.  He is director emeritus of the Business Research Center at Indiana University’s Kelley School of Business.  He taught economics there for more than thirty years and was an advisor on economic development and taxation to a half-dozen Indiana governors. One of his degrees in economics is from Washington University in St. Louis.  He has a bunch of other qualifications.  One write-up of his qualifications for his columns notes, however, “None of his advice has been taken.”)

 

A t-shirt story

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I have a t-shirt that says “Missouri. It’s not all that bad.”

Some folks laugh at it.  Others just shake their heads.

A new survey indicates why those opposite reactions are both accurate.  A new survey says we’re keeping our money (“because the people know better how to spend their money than government does,” as the legislative cliché goes).  But what’s it costing us?

A personal finance company in Washington, D.C. peppers our mailbox regularly with surveys on local and state issues. One of the most recent looks at where Missourians rank when it comes to return on investment of their tax dollars.

Wallet Hub says Missouri is the sixth-lowest in total taxes per capita (meaning the population 18 and older).

But we don’t rank as highly in some key things the company also measured.

Our economy isn’t bad—19th, rated on the median household income, annual job-growth rate, the share of people living below poverty line, economic mobility, unemployment and underemployment rates.

We’re 25th in education, a measurement of the quality of our public university system. The company ranked 500 of the 951 public and private universities in another survey.  Truman State was the highest ranking public university in Missouri and it ranked 107th among the private and public schools. Missouri University of Science and Technology in Rolla was 140. UMKC was 200th, the University of Missouri (apparently Columbia) was 223.  Schools were measured on Student selectivity, cost and financing, faculty resources, campus safety, campus experience, educational outcomes, and career outcomes.

We were 29th in public schools rankings.  Among categories in that ranking were the number of blue ribbon schools per capita, high school graduation rate among low-income students, projected high school graduation rate increase between 2017-18 and 2031-32 school years, dropout rate, math test scores, reading test scores, median SAT and ACT scores, and pupil-teacher ratios.

Missouri ranked 35th in health, measured in terms of hospital beds per 1,000 people, the quality of public hospitals—using data from the Centers for Medicare and Medicaid Services, average life expectancy at birth, births, infant mortality rate per 1,000 live births, average health insurance premium, and the quality of health care.

The numbers for safety are worse. We’re 42nd in safety. The ranking is based on our per-capita violent crime and property crime rates and vehicle fatalities per 100-million miles traveled.

In infrastructure and pollution quality—only seven states are worse. The poor quality of our roads and bridges is well-known.  But other factors enter in: average commute time, parks and recreation expenditures, highway spending per driver, air pollution, and water quality and the share of the population that receives fluoridated water through public water supplies.

Not sure what we should expect as the sixth lowest in total taxes per capita.  Probably not surprising that we’re only average at best in some categories and among the worst in others.

But everybody has to be someplace.  And Missourians seem to be happy to be in the lower third of state in some important areas.

King Canute, Charles Wilson, and the dangers of rejecting change

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We have a lot of misquotes that we like to quote to prove our points in arguments and discussions.

One arose when Charles E. Wilson was appointed by President Eisenhower as Secretary of Defense. Wilson was the President of General Motors and his position triggered intense questioning during his confirmation hearing.  When he was asked if he could, as Secretary of Defense, make a decision that would be bad for GM, he said he could although he could not think of such a situation happening because “for years I thought what was good for our country was good for General Motors and vice versa.”

Through the years his statement has been turned into the rather arrogant and erroneous quote that “What’s good for General Motors is good for the U.S.” It came to mind recently when GM announced layoffs and plant closures affecting thousands of workers in the United States and Canada.

The President has threatened GM with various penalties if it doesn’t reverse course and keep running factories and keep employing people making vehicles that consumers aren’t buying in enough quantity to justify their continued production.

It’s the equivalent of President Woodrow Wilson in 1915 ordering the thirteen-thousand manufacturers of wagons and buggies and their supporting industries (horseshoes, harnesses, buggy whips) to maintain production while people drove by their factories in Model T’s.

Paul Turner has recalled in his Adaptive Insights Blog that there were 4,600 carriage manufacturers in 1914, the year after Henry Ford fired up his first production line.  About a decade later there were only 150 of those companies and just 88 in 1929.  “Companies that tried to hang on to the past, or simply apply old world skills and technology to the new world simply failed to exist,” he wrote. One company that recognized the future and embraced the idea that it was not in the business of making wagons and buggies, but was in the transportation business was Studebaker. But changing economics, market demands, and public taste eventually drove Studebaker out of business, along with its late partner, Packard.

Think of the badges that have disappeared in recent years—Plymouth, Oldsmobile, Saturn, Mercury.  We let them slip away with some minor mourning, not paying as much attention as we might have to what their disappearance meant.  But now Ford has announced it’s getting out of the passenger car business because of changing public demand. And General Motors has ignited public awareness dramatically with its announcement that the products it makes, while good products, are not what the public wants in enough numbers to justify continued production and before GM becomes another Studebaker-Packard, it has to reprogram itself for what tomorrow’s consumer wants.  And tomorrow’s consumer appears to be leaning more toward being a rider than a driver and increasingly turning attention to electricity rather than gasoline.

We have lived through numerous non-weather climate changes and that is happening with the auto industry—worldwide—might just be the most eye-catching example.  The sprouting of big windmills and wind farms is an unmistakable indication that the way we get our energy in ten years will be much different from the way we get it today.  A former Sierra Club CEO, Carl Pope is quoted by Theenergymix.com saying “Real markets are poised to savagely strand assets, upset expectations, overturn long-established livelihoods, and leave a trail of wreckage behind them.”

Some will see the words “Sierra Club” and immediately dismiss Pope’s observations as drivel. But remember how quickly the wagon makers and their extensive support industries that employed thousands of people disappeared.  Pope wrote in 2015, just three years ago of, “fossil fuels, with coal companies declaring bankruptcy at the rate of one per month, stock exchanges delisting their stocks, and oil and gas beginning to lose market value.”

Woodrow Wilson probably could have gotten a lot of votes in some places if he promised to revitalize the horse-drawn wagon industry. But by then, Lydston Hornsted had driven his 200 hp Benz faster than 124 mph, pretty well proving one horsepower was not the future of transportation.

Change is not coming in transportation and energy alone, it is here and it is gaining momentum.

Paul Turner set forth three lessons from the transition to the car:

  1. “Only those who embrace creative destruction will make the shift…The carriage makers that didn’t invest in retooling their production failed. Most were too busy protecting their existing, dying, revenue streams. The same holds true today….”
  2. “The transition is much faster than anyone expects.” He cites the death of the wagon industry 1914-1929 and remarks, “That’s akin to a staple of the year 2000 sliding into the dust today—or perhaps today’s cars essentially being replaced by self-driving cars by the mid-2020’s. The pace of change can be disconcerting. Those that have spent their entire careers in a single industry invariably underestimate the breadth, depth, and speed of change. The speed of disruption and the unwillingness to put aside antiquated technology is a potent combination capable of bringing organizations to their knees much faster than thought possible. Innovators like Google with a self-driving vehicle, and Tesla Motors with an electric vehicle designed from the ground up understand this, while the old automakers do not.”
  3. “New innovators emerge out of nowhere, faster than the old world leaders expect.” Forty-six hundred carriage makers were in business in 1914. A dozen years later there were 3.7-million cars and trucks on the roads, some of them driving past a lot of shuttered carriage factories.

He concludes, “Holding on to the past is more risky than embracing the future.”

The Twelfth Century English Historian Henry of Huntingdon told of King Canute setting his throne by the seashore and commanding the tide to stop before it wet his chair and his robes.  Moments later the wet king rose and turned to his followers and told them, “Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth, and sea obey by eternal laws.”

The tide is here and it is going to keep coming and General Motors is the latest “king” to realize sitting still is to become submerged by the future.  There is pain in change but history tells us that ignoring change or ordering us to ignore that change is asking for a mouth of salt water at best, drowning at worst.