American Hero

[In honor of Memorial Day, the Daily Reckoning presents American Hero, first written and aired May 22, 2000]

AMERICAN HERO

“It looks just the same as it did 56 years ago,” said Colonel Flamm Dee Harper, USAF (Ret.). “France is a beautiful country…as beautiful now as I remember it. Except you don’t have to worry about running into a German patrol around every bend in the road.” Col. Harper, a small, handsome man of 80 years, stood on the hillside speaking into a microphone to a crowd of about 200 people. At his right was a young lieutenant, the USAF attache from Paris who served as his interpreter. Further down the hill, a group of about a dozen French officers were formed up into a square, starched and grave…with enough gold braid to back a currency.

On his left were two flags, hoisted on recently implanted poles – the Stars and Stripes and the French drapeau – and a marching band of about 40 pieces, resplendent in dark blue suits with white insignia. They were the municipal band of little Montmorillon, the sous-prefecture about 10 minutes away from my house.

Montmorillon was celebrating the return of Col. Harper, an American pilot who crash-landed in this field in 1944. In front of me, a blonde woman had tears in her eyes. She looked as though she was about 55 years old. I did the math twice to make sure – she had to be at least 70.

“I want to thank Jacqueline Thomas, who saved my life,” said Col. Harper.

For more than half a century, Jacqueline Thomas, who stood before me, had wondered whatever happened to the young flyer she found in her grandfather’s vineyard in 1944. It was the vineyard, as much as Jacqueline, who saved him. Born in Albion, Idaho, Harper was 21 years old when America entered WWII. Like so many pilots, he was fascinated by machines and speed. And when a group of P-38s flew over Utah in 1943, Harper saw them and knew what he wanted to do. He enlisted in the air force and was sent to flight school. A few months later, he was already flying his 29th mission over France. His target was the German ammunition depot at Sillars, about 20 miles from here.

But something went wrong. A time-delay bomb went off and ignited the powder magazine just as he was passing overhead – at an altitude of only a hundred feet. The debris hit the aircraft, putting one engine out of action and damaging the other. Worse, Harper had been struck in the head by flying glass. So much blood streamed down his face that he could no longer see. Smoke filled the cockpit.

Harper undid his harness and started to bail out. Then he realized that the ground was only about 50 feet below. So he sat back down in his seat and prepared to crash.

Seeing the field again, for the first time since the event, Harper turned to me: “I don’t know how I survived. A P-38 can’t glide at less than, say, 130 miles per hour. I should have been killed.”

But the wires that held up the grapevines slowed the plane. Harper jumped out of the cockpit with no further injury. At first, Jacqueline Thomas thought he must be a German. She started to run away. Then by some instinct she decided to go to his aid. His face was covered with blood. And the Germans could arrive at any minute.

She led him to her grandfather’s house. No one was home.

She tended his head wound in the only manner she knew – dousing it with “eau de vie,” strong spirits that hurt so much that Col. Harper recalls the pain to this day.

Not long after, Jacqueline’s father arrived. He had seen the plane go down and was concerned for his daughter. Taking command of the situation, he had Harper take off his clothes and dressed him as local farmer.

The two grabbed fishing poles and went down to the river where, pretending to fish, they made their way to a cave where Harper was hidden.

Eventually, Resistance leaders were contacted. Harper was driven to a farm where another woman took charge of him – – Denise LaBrousse. She was there yesterday, too. Nothing seemed to have changed. Harper was vigorous – with a sense of humor and a friendly smile. Jacqueline still seemed like the teenaged girl who found him in the field. And Madame LaBrousse looked like she’s probably always looked. She looked like she could make a good omelet – which is just what she did for Harper.

As the story was told, each of these people made their way up to take their places alongside Col. Harper… Denise LaBrousse walking with difficulty with the aid of a cane. And there they stood. The mayor of Montmorillon had invited me to the ceremony as a representative of the local American community (“I not only represent it,” I explained to Col. Harper, “I am it. Apart from my family, there are no other Americans in the area.”) and as an interpreter. He now presented Col. Harper with a medal from the town. A representative of the French Air Force gave him another medal – a set of wings. The band struck up the Star Spangled Banner…and then the Marseillaise.

Tears welled up in many eyes. Many of those present had fought in the war. Others had vivid memories of it. My friend, Gilbert Mining, was there. He had made his way to North Africa to join the Free French Forces of de Gaulle. He’d made friends with an American soldier…whom he has never seen again. Another old soldier sat next to me at the dinner following the ceremonies in the field. He had been with the French army at the Maginot Line. They were driven back by the Germans and finally pinned against the Loire River.

“I asked my commander for permission to desert,” said the retired schoolteacher. “He told me to go ahead. So I swam across the river. Then I fought in North Africa…and then back to France.”

Harper, meanwhile, went on to glory. He joined the local S.A.S. forces, Britain’s underground operation that coordinated resistance activity throughout the war. John Fielding, an Englishman who was part of the local unit, was also at yesterday’s ceremony.

Together with the local French resistance, they blew up train lines to keep the Germans from moving troops from the south of France to the front in Normandy.

But Harper did not remain on the ground, or under it, for long. Scarcely three weeks after the local paper in Utah reported him “missing in action,” he was back in England and back in the cockpit on various missions.

Later, in Korea, he was shot down again. His ribs were broken, but he managed to kill two North Korean soldiers with a handgun and was rescued by helicopter. He became the only pilot to get shot down in two wars and keep on flying. But the most remarkable phase of his career was probably during the period following his rescue in North Korea.

While he was recovering from his injuries, Harper directed the activities of his unit of flyers. One of his pilots reported a massive build-up of supply trains in the sector.

Harper was unable to get permission for an attack, but ordered it anyway. The pilots went to work. They discovered that the boxcars were loaded with ammunition. The whole sky lit up, brightened by the explosions. Encouraged, they just kept hitting the train, which just kept blowing up.

Some military historians believe this attack was the key to ending the war. The ammunitions train was meant to supply a massive million-man Chinese army. Without supplies, the offensive was called off, and the North Koreans decided to resort to the bargaining table.

But world politics were a long way away from the thoughts of those assembled here in Montmorillon this weekend. “I’m just glad to be alive,” said Harper.

Your correspondent,

Bill Bonner
Paris, France
May 30, 2001

Market Watch

This section of the Daily Reckoning is written by Eric Fry, editor of Grantsinvestor.com. You can watch Eric on TV this week – he’s the guest host on CNN-FN, 9:30 – 11 E.S.T. My notes and letter follow, as usual.

From Eric:

*** The consumer is OK so far. The Conference Board’s consumer confidence index jumped to 115.5 in May, from 109.9 in April. The University of Michigan index went the same way, from 88 to 92.

*** In keeping with the upbeat mood, Americans spent more than they earned in April. Spending on goods and services grew 0.4% in April, slightly higher than the month’s 0.3% personal income growth.

*** So, Americans are still living beyond their means. But, despite the encouraging news, most stocks lost ground yesterday. In particular, the NASDAQ fell more than 75 points. Blame Goldman Sachs analyst Laura Conigliaro!

*** Before the market opened, Ms. Conigliaro issued some unflattering comments about Sun Microsystems and data- storage company EMC. Citing fierce price competition in the data-storage business, she reduced her earnings estimates for both companies.

*** Someone needs to take Ms. Conigliaro aside and explain how the game is played. Shares of the two tech companies stumbled from the opening bell and dragged the NASDAQ down with them. Goldman can’t earn much money that way.

*** The Dow Jones Industrials bucked the trend with a 33- point gain.

*** Most of the visiting on-air commentators I encountered at the CNN studios yesterday expressed optimism that the U.S. economy and stock market are recovering, thanks to the indefatigable American consumer. We consumers will keep spending, the optimists say, even if we must borrow to do it, and yes, even if we’re losing our jobs.

*** Well, I’m a consumer and I’m not buying that prophecy. Allow me to offer a different one: the rising unemployment trend is, unfortunately, just beginning. And those without jobs and those who fear losing their jobs will not be visiting shopping malls in their spare time, no matter how many credit cards Capital One tries to give them.

*** Remember the ‘wealth effect’? Stocks went up and people felt richer. Their portfolio statements told them they were richer. So they spent more money and invested more freely. But what would happen when stocks went down? Would there be a ‘poverty effect’?

*** Alan Greenspan wondered the same thing. So he pulled together a panel of economists to study it. Well, it turned out that the ‘wealth effect’ was highly concentrated among, guess who…the wealthy! They were the ones who owned the stocks that went up. And when stocks went down, the wealthy didn’t exactly begin to scrimp and save. But they did cut back – which is why you can get a beach house in the Hamptons for $10,000 less this year than last year, even though most consumer spending remained unchanged.

*** But the study also found that while most consumers had never benefited from the ‘wealth effect,’ they still acted as if they had. They stopped saving and went further into debt. Now, half of all U.S. households have less than $17,500 in financial assets. Those in the middle income range have only enough financial reserves to sustain spending for 2.2 months. And the bottom 40% of households have NO RESERVES whatsoever. If these people lose a job – or even overtime pay – they must cut back on spending.

*** The U.S. economy at the moment is like the economists who plunges one hand into ice water and the other hand into boiling water and proclaims, “On average, the water is warm.” Although U.S. GDP registered a tepid 1.2% growth rate in the first quarter, our economy contains elements that are both red-hot and stone cold. Moody’s reports, “An index of lumber product prices recently posted stunning gains of 91% for 2001-to-date, and 17% year-over-year.” But at the same time, Moody’s observes, “April’s record 40.9% monthly decline in semiconductor equipment bookings broke the previous record drop of 25.3% set just two months earlier. Semiconductor equipment bookings have dropped 45% year-over-year thus far in 2001.” Warm…on average.

*** Despite the 5 rate cuts by the Federal Reserve, we are in the middle of what the folks at International Strategies and Investments (ISI) term an economic “head fake.” ISI’s research uncovered two such head fakes in the last 30 years. The economy firmed briefly in the middle of the 1970 recession and, similarly, strengthened briefly before heading into the 1990 recession.

*** “The U.S. economy may be doing a touch better,” ISI concludes, “but we seriously doubt it’s about to take off because it’s facing a number of headwinds including:

* Declining corporate profits.

* Declining employment.

* Collapsing tech activity.

* An over-extended consumer (as too much spending, too much debt, negative savings rate).

* Slowing global economic activity.

* A weakening California economy.”

And a few notes from Bill:

*** The ‘second half recovery’ that investors have been talking about so eagerly is now only a month away. Will it arrive on schedule? As Eric points out above, if unemployment continues to rise, consumers will be forced to cut back their spending. And if they cut back, the recovery will have to wait – maybe for years.

*** But what would make unemployment increase? A slowdown in consumer spending, of course! Hmmm…I’ll have to look at this more closely…I’m not getting anywhere. More tomorrow…

*** “Despite its 296-point loss for the week last week, the Dow has risen 17% from its March 12 low of 9389,” write Blue Teamers Addison Wiggin and Dan Denning. “That’s what is seen. What is unseen? Corporate profits have dropped two quarters in a row. First-quarter 2001 after-tax profits fell over 3% in the first quarter. They fell 4.3% in the fourth quarter.

“Even worse, business investment is falling too,” the team continues. “Business investment fell 2.6% in the first quarter. It fell 3.3% annually in the fourth quarter. Those are the first back-to-back declines since, you guessed it, the recession 1990-1991. Investment is what creates profits. And without new investment, profits will continue to fall.”

*** The Internets were the big losers yesterday – with the index down 10% on the day’s trading. Even the U.S. government is doing e-commerce – selling such things as wild mustangs and WWII ships. Doing business in a fashion described as “haphazard,” Bloomberg reports that the Feds still took in $3.6 billion of sales last year – more than the $2.8 billion sold by Amazon.com. Jeff Bezos just keeps drifting down that big lazy river of no returns.

*** I reported recently that the euro probably had about 3 cents worth of downside risk (while the dollar could go down 30 cents). Well, already the euro is down more than 2 cents. It is now at just a bit above 85 cents…and nearly at its all-time low.

*** Edward, 7, packed his bags and set off on his class trip cheerfully this morning. He seemed happy to go…but I thought I saw a tear welling up in the corner of his mother’s eye as her ‘petit dernier’ went out into the wide world without her.