My schooner as allegory for the economist

May 2009

By Dodge Morgan

My investment account has a brand-new profile, the same features displayed half-size like a naked shrunken head. My schooner appears patently unaware of the financial surgery accomplished on her long-term friend. She sits dry and comfortable as always under winter management of her Riverside Boat Company keeper. My portfolio asks questions of its counsel that are really rhetorical, thus have no answers: sell, dollar-cost-average buy, hold, ignore, avoid all economic news, or spin it somehow positive?

The schooner just wants a pair of new bunk cushions and some chainplate rust removal along with the annual total paint job. Her owner, vainly addressing his decrepit age stage, tries one more evaluation of a jib roller-furling system and replacement of the yachtsman anchor with a Bruce, both pitting negative aesthetics against the sin of convenience.

I am thinking that the schooner makes a delightful metaphorical contrast for the plights of financial distress at individual level, concluding in a kind of blueprint for the substantial value of inaction. Let’s compare the old gal to a Cigarette powerboat in an effort to better understand our economy and its financial hit on each of us.

For the past decade at least, the world’s economic powers have been at breakneck Cigarette speed, delightedly blazing along a course of hazed GPS numbers with no ultimate destination but “more” (there is an old Maine saying: “If you don’t know where you are going, you are certain to get there”). The vessel is not simple: huge engine, complex controls, specious drive train, fuel avarice, seat belts, hat-losing self-caused winds. And the sonofabitch refuses to change direction.

Some have been observing all the pell-mell from the deck of the old schooner. She will barely exceed five knots and is most happy at anchor rest if the wind comes from where she wants to go. The only real urgency aboard is coffee while it is hot. Things do go wrong, of course, but they all can be slowly fixed by a knot or a hammer blow or duct tape. She always gets to her destination – and she always has a destination.

The schooner intimately knows her surroundings, aware which ones to ignore – while the Cigarette is oblivious to every natural signal around her. The schooner horizon can be described in one simple phrase because it changes only at the speed of the sun – “Red sky at night, sailor’s delight” – while the Cigarette view is described in a laundry list of details, barely connected: engine temperature, rpm, spray ducking, waypoint, blinking spot on a screen, bladder pain.

Is there a lesson here? Yes, of course there is, but I am not sure what it is. Maybe it’s that all highly fueled trends are dangerous and should be constantly challenged by contrary examination. Maybe it is that life in the slow lane is far more rational, if less wowing, than that at blank speed, a kind of age analogy – undefined youth to uncertain wisdom.

Maybe that the old ways work more durably than the new ways, and we almost always drift back to them. Maybe that abandoning the code of simplicity by creating exquisite mechanisms – such as derivatives and hedge funds or jet drives and chart recorders that it turns out no-one truly understands – becomes a script for lasting confusion.

Maybe the crisis is better ignored than internalized, just as the bubbles should have been before popping.

Maybe doing as little as possible as slowly as possible will get us back home to center channel.

Dodge Morgan lives on Snow Island, Maine