Merchie Fun Facts - part ...

[JWE]

ORIGINAL: el cid again

Any idea why we have decided (now, de facto) not to have a significant merchant fleet or shipbuilding capability? Given Mahan's theory about maritime power, and the US Navy's attitude about it, you might expect a different policy. My former home port - Long Beach Naval Shipyard - is now operated by China.

Mike is quite right. My last real window was in the 70s, but the issues remain today, and the howls were even louder then. Much of the answer is political, and may offend, but then the whole political spectrum is offensive so what the hey.

Construction costs and operating costs.

Government regulations, union rules, and taxes made operation of US flag vessels uncompetitive. Everybody fled to flags of convenience, but were allowed to retain US domicile (take profit here, get tax break there) by agreement to recall/reflag and allow nationalization upon sufficient notification of National Emergency. Congress did consider passing a law requiring US shippers to ship in US bottoms, but the shippers said they would just expat; tax revenue would go to zero and the maritime unions (voters) would disappear. Uummm … money, Uummm … votes

Nonetheless, most US shippers were driven from the country by confiscatory regulations and predatory unions. Many well known companies are still alive and well, but under other names in other countries.

Construction costs were also prohibitive due to regulation, taxes and union rules. European nations got around this (and the operating cost issue) by subsidies, but we could not. You don’t subsidize the BISBU (Boiler and Iron Ship Builders Union) and the SUP (Sailors Union of the Pacific), for example, and not the UAW; not and have any hope for re-election.

Most of this was justified by McNamara’s pencil-necks. The theory, at the time, was that conflict intensity would not allow for long-term infrastructure development; conflict was to be a one-shot-pop. There were some hulls in the Reserve Fleet, some hulls in the Reflag Fleet, some hulls in the Flag Fleet, and this was deemed suitable by the DOD chairborne warriors.

McNamara was SecDef to JFK and LBJ, then we had, for a year, Clark Clifford?? And then Harold Brown?????? And now we’ve gone from 1961 to 1981 and the damage was complete and terminal. There is neither hope nor possibility of recovery.

[Mike Scholl]

Basically the same bunch of short-sighted, penny-wise, pound-foolish, Politicians and Labor Leaders that keep jacking the minimum wage...., since the 60's over 400%.  Result?  Since the 60's the costs of hamburgers and movies has increased by over 400%.  The rule seems to be to cater to the biggest bunch of morons, as their votes might be for sale.  Alexander Hamilton must be turning summersaults in his crypt.

[JWE]

ORIGINAL: Mike Scholl

Basically the same bunch of short-sighted, penny-wise, pound-foolish, Politicians and Labor Leaders that keep jacking the minimum wage...., since the 60's over 400%.  Result?  Since the 60's the costs of hamburgers and movies has increased by over 400%.  The rule seems to be to cater to the biggest bunch of morons, as their votes might be for sale.  Alexander Hamilton must be turning summersaults in his crypt.

Shoot Mike, you guys are stressing the crap out of me, you’ve made me dig out my moldy black binder thingies from way hell and gone. I remembered something from back then; maybe it’s true, the older you get, the more of your youth you recall.

It was 1973, my notes were for November, so it might well have been October – December in the Congressional Record. Testimony by R.Adm. Roland Cawthon (sp?, I just have him as Rollo) before the House Armed Services Committee on issues of Fleet Support. He was opposed by a Richard “Dicky Doo” Donlon, an economist from Tufts working for State. A major Donnybrook that should be required reading for all students at every service academy (and VMI, Citadel, Norwich, A&M, etc..)

Rollo’s thesis was that macro-econ theory (at the time) didn’t specify the effect of transportation, but folded it into production cost metrics; basically burying it as a percentage adder to the marginal rate tables.

The Wharton School had a 2 step model; production – consumption (McNamara went to Harvard and was a Wharton disciple). Back then, the Chicago School had a 3-step model, and put transportation on the same level as production and consumption; Rollo was making an economic theory argument.

Rollo went to U of North Carolina, and was a Chicago school disciple. Rollo was very articulate, but Dicky trumped him; I have a Masters from Tufts, you have a Doctorate from .. where? .. oh .. North Carolina? .. sniff ..

I remember this because I spent four years in high school with Dicky Doo, at the Bolles School. He went to Tufts and into State; I went to Bates and then went to war. Dicky & I ate a lot of crabs and drank a lot of beer and had many hot arguments in Georgetown during those times. He’s still my friend although our paths have devolved into mutual political hatred.