Friday, May 4, 2012

The Cofferdam Approach To The Economy

     My home town has been an historic and major inland shipbuildng port for
two centuries. Oliver Hazard Perry's fleet, which won a decisive victory on
Lake Erie in the War of 1812 ("We Have Met The Enemy And They Are
Ours"), was built in Erie, PA, and later the first iron-hulled warship, the
Wolverine,, was built in Erie several decades later. Over the next hundred
years, ships of all sizes were built by various boat builders at the port of Erie
which also had the first lighthouse on the Great Lakes, and still has a major
U.S. Coast Guard station. A few years ago, this industry was revived locally,
and currently huge freighters, tugboats and smaller ships and boats are built
and repaired in the city. My own interest in ships has kept me (now living far
away) abreast of this industry, and in the course of my reading about it, I
came across a term I did not previously know--- a cofferdam.

A cofferdam (sometimes just called a coffer) is a temporary structure built over
water which enables ship repair to take place in a body of water on dry land.
Usually using a steel enclosure, the water is removed and the space filled with
dirt. It's an expensive process, but it is done when putting a ship in drydock is
unfeasible or, as is often the case, even more expensive than a cofferdam. If
you live in a port city, especially on a Great Lake or near a major river, you
have probably seen a cofferdam. The cofferdam. being temporary, is removed
after use.

It has occurred to me that the way politicians are dealing with the current
economic crises, is very much like using a cofferdam. Unfortunately, while the
cofferdam is a practical and necessary device in ship repair, I think the fiscal
cofferdams appearing in the US. and Europe these days function in an opposite
manner. The U.S. economy, including Social Security, Medicare and Medicaid,
the private pension fund system, mortgage banking system, healthcare financing
system and other major economic structuress are in need of historic and very
major repair. The great ship which is our economy really should be taken into
drydock for serious and critical work. Putting an economic ship into drydock ,
however, involves delays, dislocations and other "inconvenient" problems, but
unless you want a ship eventually to sink, it must be done.

Our politicians don't want to face the hue and cry that would come from the
citizenry (and voters) if they put the U.S. in the absolutely necessary (in my
opinion) drydock to get the job done right.

So the politicians avoid the drydock and construct economic cofferdams that
only provide short-term and superficial repair. An even more egregious example
of this is the behavior of politicians in the European Union today. Their debt
problems are perhaps even more immediate and serious than ours, but instead
of facing up to imminent dangers of delay, European leaders are constructing
cofferedams everywhere on the continent..

Much has been made in recent weeks and months as the centenary of the
sinking of the Titanic in 1912, a disaster which a hundred years later still grips
worldwide fascination, was observed.  Our cruise ships today are much larger,
and much safer, but recently one of them in the Mediterranean struck a rock,
and sank, turning on its side,  killing more than 30 persons. 

An economy is a vastly large ship. When in need of major and critical repair,
too much is at stake to simply construct a temporary cofferdam and just patch
up the problem.

Commodore Perry, who commanded that key naval battle of Lake Erie in 1813,
and who had personally supervised the construction of the U.S. fleet in Erie, PA
two hundred years ago, had the most famous naval battle flag in Ameerican
history. Its words still ring out today: "Don't Give Up The Ship!"

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Copyright (c) 2012 by Barry Casselman.  All rights reserved.






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