Page 1


A Public Service Message from the American Income Life Insurance CompanyExecutive offices, Waco, TexasBernard Rapoport, Pres. Our ‘economic ship of state’ By Seri. Gary Hart The thought seems hardly to have occurred to anyone, during our current scramble to cure the nation’s economic ills, that we may be treating only the symptoms of the illness or, even worse, the wrong disease. Congress has voted a hodge-podge of tax rebates, tax reductions, investment tax credits, and tax reforms all representing “fine tuning” of an economic engine that requires a major overhaul. Consider what the mood of the country will be in 6 to 12 months if these measures have gone into effect and nothing happens: inflation runs rampant and unemployment remains at recession levels. Politicians and economists must realize times have changed. The creaking economic ship of state is taking on water from leaks that did not exist in the Great Depression or even more recent recessions: 1.Keystone industries have become increasingly concentrated and anti-competitive, . and spend more money on sexy advertising campaigns than they do on innovation, invention, product quality, and product safety. 2.New Deal regulatory agencies stifle competition, create bureaucratic nightmares, and are seduced by the industries they were designed to regulate. 3.Government procurement policies, particularly for military hardware, are political footballs that, with acquiescence by organized labor, have become tools for “economic stimulation” in favored regions. 4.Giant multinational corporations chartered in this country, but owing allegiances to no flag run roughshod over our foreign policy and dominate our economy through control of vast quantities of raw materials and productive facilities. 5.The tax structure is increasingly used as a subsidy mechanism in the amount of $92 billion a year, over half of which goes to powerful special interests. 6.Much of the nation’s capital assets railroads, seaports and shipyards, plants and productive capacity deteriorate while we seek to “stimulate” an economy premised on wasteful consumption and planned obsolescence. More than anything else, the nation cries out for leaders who will tell the hard truth that old-time, “fine-tuning” economic remedies are no better than leeches and snake oil in the last quarter of the 20th century; that the free lunch is over and, in fact, the economic pie is shrinking; that economic stimulation through weapons procurement is inherently inflationary; that a democracy cannot long survive with a tax system as inequitable as ours; that our “free-enterprise” economy is being eaten alive by big enterprise while the Government acquiesces; that the quality of life is more important than the quantity of goods consumed. But those same leaders could offer a message of hope and a return to fundamental values. Translating these values into sound policy will require strong measures such as these: Fiscal stimulation through rebuilding our national assets, not through weapons production; a return to true competition through strict antitrust action and public-interest regulation; stimulation of private savings and investment through programs to broaden private ownership of productive assets; subsidies dispensed above the table and not hidden in the tax laws; replacement of a paternalistic government’s handout programs with guaranteed employment and income maintenance; and thorough review and reform of our economic institutions the Federal Reserve Board and our monetary system, our planning and budgeting process, where progress has been made, our credit system, and our tax structure. The Administration and Congress have merely taken the easiest course, the one most readily at hand. But the hard questions have not been asked and the causes have not been identified, and the people know it. The people know that a fundamentally sound structure is beginning to rot and decay through misuse and lack of maintenance. Gary Hart is junior Democratic Senator from Colorado. This article appeared in the New York Times of April 21, 1975, and is reprinted by permission of the author.