According to the latest Department of Commerce numbers, the U.S. economy was tooling along with real GDP growth of 2.0 percent in the first quarter—somewhat less than 2017’s 2.3 percent but with prospects for improvement in the next quarter. Compared to sleepwalking 1.6 percent in 2016, the real possibility that 2018 (or even 2019) closes out somewhere around 2.8 percent is welcome news. Unless, of course, trade wars or Federal Reserve policy battles cancel out the benefits of tax cuts, regulatory reform, and low-cost natural gas.
Those clouds hovering over an otherwise-sunny outlook — trade wars, Fed interest rate policy, developments in foreign affairs that could affect the price of oil, or other unforeseen circumstances — could conceivably converge and put the economic engine in reverse. A little bad luck on the policy front and a 2019 recession isn’t out of the realm of possibility. In good times and bad, there is always some risk.
Is there anything we can do about it? Or are we economic marionettes whose strings are always pulled by larger macroeconomic forces?
Raising these questions brings memories of my 1963 encounter with C.E. Woolman, co-founder and later chairman of the board of Delta Air Lines. A storied executive, Woolman became famous for starting the world’s first aircraft based crop-dusting service and then, in 1928, turning it into a Mississippi-based passenger service. Thus, Delta Air Lines got its name from the region where it was born.
Woolman was famous for insisting that customers be treated like royalty. He was said to urge his many employees to “put yourself on the other side of the ticket counter,” his version of the Golden Rule. Of course, touting the Golden Rule is one thing. Embodying it with anything resembling consistency is something else. And that was what I encountered with Woolman.
At the time, I was part-owner of a small industrial machinery company located in Atlanta, and I was eager to do business with Delta, whose corporate headquarters were located just outside the city at the Atlanta airport. I was waiting in Delta’s reception area, where a secretary had taken my business card, called the purchasing agent I hoped to see, and asked me to wait.
As I sat waiting my turn, a large gray Chrysler pulled up and double parked at the office’s front door. The driver stepped out of the car, opened a rear door, and assisted a tall, elderly man into the building. The gentleman spied me, walked over, extended his hand and said, “I am C.E. Woolman. Who are you waiting to see? How long have you been waiting? Your time is too valuable to be sitting here.”
Somewhat bowled over by the unusual attention, I quickly gave the name of my Delta contact and indicated that I had not been waiting long. Woolman smiled, thanked me for calling on his airline, turned and asked the receptionist to ask for my visit to be accelerated. “We don’t want to have people waiting for us,” he said, as he headed away. I was smitten, and immediately became a Delta fan.
Up until 1978, Delta and its six major competitors were regulated by the Civil Aeronautics Board, which granted routes and set rates. That’s right. There were just seven airlines offering scheduled services in the United States. Consumer choice was limited; new carriers simply were not allowed to exist. All that ended when markets were opened in 1978 with the CAB’s elimination. New carriers entered. Fares fell dramatically. Existing airlines struggled to adapt to the new open skies.
Eastern Airlines, Braniff, and Pan American bit the dust. American and United survived. So did plucky Delta with its humble origins. Woolman’s customer-caring culture seems to have paid off. Delta missed the deregulation recession.
Can an individual business manager or professional do something to counter a national recession? Yes, the organization’s leader can apply Woolman’s advice: Put yourself on the other side of the ticket counter and treat your customers like royalty.
2019 recession? To some degree, we have a say in the matter.
Bruce Yandle is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of the Clemson University College of Business & Behavioral Science. He developed the “Bootleggers and Baptists” political model.
