Let the bishops take no guff:
Toolan, David
LET THE BISHOPS TAKE NO GUFF AN INTERVIEW WITH ELIOT JANEWAY DAVID TOOLAN Eliot Janeway started the debate over the impact of political pressures on commerce and financial trends in 1935. Now,...
...economy...
...It's too static-and needs to be related to demographics...
...What worries me is the growing gap between society and the working economy, that a growing proportion of the society is like a detached retina...
...JANEWAY: What I fear will happen if things go bad with the economy-and I believe they are headed that way-is that we'll see a dramatic increase in the numbers of the poor and these numbers will be former middle-class people...
...We reclaim scrap metal, reclaim scrap paper...
...The front page claimed that prices would go up from forty to eighty dollars- because the demand would continue high and the supply was low...
...Moreover, the problem of poverty in our country must be linked to the dynamics of our continuous technological revolution...
...The trouble with the bishops' good intentions is that they don't have a workable plan for putting them into effect...
...I mean you can't have a strong defense by getting a bunch of kids to walk around with broomsticks...
...Now that the real estate market is buckling everywhere, and the financial services boom has gone bad, there are no strong segments left in the economy...
...These are built-in public sector responsibilities, and they're as necessary to economics as breathing...
...What is the age distribution...
...But I hope the bishops stand their ground...
...JANEWAY: Part of the solution is to take the poor along with us, to catch them up in the dynamics of the new technology by raising their educational capability and their incomes-so that they become part of what drives the economy to produce...
...How many people are productively employed...
...TOOLAN: Is there some way to bring your two assembly lines into relative synch...
...The way the Pentagon works, the plane will come in in the twenty-third year for $94 billion and be unusable...
...They were full up...
...JANEWAY: I do...
...JANEWAY: I think there's a problem with their notion of the poor...
...The bishops' letter asks for a practical commitment to the rights of the living...
...I'd like to go back to the demographics of the American economy...
...He can't have it both ways...
...God bless him, he's welcome to it...
...Doing the other side of the figure eight, the inside page carried an interview with a Gulf Oil manager in Newfoundland-known to be the shortest in oil supply of any region in North America...
...Debts have outrun the ability of incomes to pay interest plus expenses...
...I don't see Bill buying any uninsured banks...
...Church schools, among others, should be radically reorienting themselves to do the job...
...What kind of deal is that...
...And we can't do that unless they're trained and healthy...
...In the nineteenth century we thought of automation as the enemy of employment...
...Unless you get the public and private sector to mesh like the teeth of a gear, you're going to have chaos...
...Their basic capital consists of a $53,000 home-which carries a $219,000 mortgage...
...JANEWAY: I take pragmatic exception when they call for a "new American experiment" that calls for' 'cooperative ownership...
...JANEWAY: Well, the bishops are either in it or they're not...
...The fact of the matter is that right now business is trapped in marked-up inventory that customers won't take...
...Justice Douglas's view, from the judicial standpoint, converges with the message of the bishops...
...which guarantees a long siege of sellers chasing buyers with price cuts and contingency shipments while activity stalls...
...We haven't been utilizing them as capitalists should-or as good socialists should want to...
...It seems to me that this would be tokenism...
...JANEWAY: Well, the bishops are on terrain they're not familiar with...
...Why can't we reclaim people...
...Why should the worker take responsibility for the mistakes of bad management...
...JANEWAY: Yes...
...What's your point there...
...We're enjoined by the Constitution and the Bill of Rights to subordinate the claims for efficiency to the interests of human well-being...
...We need to update our concept of the poor to allow for a growing middle-class membership...
...His The Struggle for Survival (1951) is the definitive history of economic mobilization before and after Pearl Harbor...
...If we did away with overtime in the defense industry, we could add employment there...
...Instead of putting their funds exclusively into government treasury bonds- which are not going to make any money-the insurance companies take a fraction of their money-usually about 3 percent of it-and invest it in blue chip stocks like the AT&T...
...How many are supported by those productively employed-or employable...
...He operates under the protective wing of the government...
...The greatest challenge fiscal reformers face is dealing with the way the Pentagon makes long-range commitments...
...JANEWAY: The bishops write: "Our faith calls us to measure this economy not only by what it produces, but also by how it touches human life and whether it protects or undermines the dignity of the human person.'' This criterion of judgment is consonant with, and in the great tradition of, the Bill of Rights, the Constitution, and the Declaration of Independence...
...Any ordinary disaster, an illness or loss of job, can easily drop them into the ranks of the homeless...
...JANEWAY: Let's address that right now...
...TOOLAN: Do you think we're in for a crash much worse than what we saw on last October's Black Monday...
...Let's call it social obligation...
...By the time 1988's victory of debts over income has taken its toll, the country will be begging for another dose of inflation...
...There's plenty of room for both the public and private sectors...
...I recall a conversation I once had with the late Justice William O. Douglas...
...The export data lump sales for cash, credit, and barter, another gross distortion...
...Before you can evaluate whether the standard of living is rising or falling, you have to pay attention to the population-a completely nonideological, apolitical matter...
...Except for the expert advice they were given, they're doing all right, groping in the right direction, no apologies needed...
...Moreover, the poor as we have known them are going to find their ranks radically augmented by new recruits not heretofore regarded as poor...
...Those high school dropouts don't have the skill to get into a high tech economy...
...At the same time, the military spending system is a more complex problem than either the bishops or advocates of a strong defense seem to realize...
...The words become our captors and we lose control of our lives...
...I think I have one, a proposal I am about to make in my new book...
...TOOLAN: What do you mean...
...Janeway now heads his own financial consulting firm, publishes the Janeway Letter, and contributes regularly to the New York Times, the Washington Post, and Barron's Financial Weekly...
...And typically, the place is in lousy repair and not easily salable...
...Automation leaves no place and shows no mercy to those unable to keep up with its pace...
...The most palpable fraud perpetrated on the work force is done in the name of power sharing...
...It is, however, the excluder of the illiterate...
...Is that a problem...
...There's plenty of work to be done, rebuilding roads and bridges, the decaying infrastructure of our economy...
...And this becomes a very dangerous source of social trauma and violence in society...
...And what are you going to do with the rest...
...No one took me seriously...
...The bishops come down foursquare on the obligation of society to the continuity of employment, to the continuity of priorities for human need and human values...
...Since January, when the government claimed 150,000 new retail jobs were created, retail sales have been a disaster...
...Right now, a person pays into this fund and, in return, is guaranteed an old age in near penury...
...It's in everybody's self-interest to see that this happens, to see that they can pay their own way...
...I'm glad to see that...
...Is there anyone who denies that education is a public sector responsibility...
...What I've come up with is a new source of capital investment that's been right under our noses all these years since the New Deal...
...We reclaim soil...
...Of all the things we know that aren't so, the working of the law of supply and demand tops the list...
...The bishops' hearts are in the right place...
...Your average hard-working, church-belonging middle-class family is in very poor financial shape today...
...But the oil shortage was a joke, a sham...
...In turn, any resolution to the human costs of rapid technological change requires attention to education...
...Demographics are key...
...Improvement in export figures can't begin to make up for volume losses on the consumer side, especially with imports on the rise...
...Educated at Cornell University and the London School of Economics, he became Business Editor of Time at the age of twenty-five...
...The manager said they had run out of storage space...
...For instance, think of that $45 billion, fifteen-year contract the Navy just let for a new plane...
...In conceptual terms, visualize two parallel assembly lines entirely different yet supplemental to one another, each moving continuously without interruptions...
...The trouble goes far deeper than the touted power of the Federal Reserve Board to tinker with palliatives...
...What we want from a president is policy...
...Why not do with a fraction of these funds what the insurance companies now do with their investments...
...Either way, incomes shrink, cutting the consumer economy back drastically...
...It is in the mainstream of congressional legislation and the decisions of our courts...
...If they're in it, they're involved in policy...
...The government has to be involved...
...Or anyone who thinks that the census or labor statistics ought to be privatized...
...There's no way government spending, with or without a balanced budget imperative, can deal with such shenanigans...
...What bothers these gentlemen is government intervention that may harm productivity, innovation, and our competitive edge...
...I mean social security funds...
...The right of employees is to be compensated...
...It is not the enemy of employment...
...But like all the Nobel Prize winners in economics of this century, they fail to make the connection to changing technology...
...They've been borrowing on it for years to send their children through college or whatever...
...It seems to me that you're taking enough of a risk where your livelihood is without compounding that risk by investing in it...
...TOOLAN: Your concern, then, is a growing underclass...
...Full steam ahead...
...and debt is rising while incomes are eroding...
...Bill Simon is out there buying every Savings and Loan institution he can find-yes, taking advantage of government insurance of the property and not making mortgage loans...
...TOOLAN: But even the Simon-Novak statement, Toward the Future, conceded that there was no such thing as a perfectly free market...
...It has no data sorting out the impact of price-cutting on volume of goods moved...
...TOOLAN: Do you think the bishops have unrealistic expectations of the U.S...
...JANEWAY: In 1979, I was asked how long inflationary oil prices would continue, and I was quoted in the Wall Street Journal as saying '' until these dumbbells who run the major oil companies run themselves out of storage space...
...How can you be for the rights of the fetus and not be for the rights of the successors to the fetus...
...TOOLAN: What is your reaction to the bishops' letter on the U.S...
...The bishops could have made these linkages clearer...
...This abstract argument about public and private initiative is a war of words...
...The responsibility of employers is to employ...
...In the time period since the letter was published, the condition of the poor has suffered radical deterioration...
...moreover, the poor-and I also mean the new middle-class poor-can't enjoy even their present level of security, however little that is, if the economy goes into a tailspin...
...Your "new American experiment" has already been tried in Europe...
...they are participants...
...JANEWAY: TO some extent, yes...
...The other, the demographic line of the society, bears people, as the phrase goes, from cradle to grave...
...Now, fifty years later, his thesis that Washington, not Wall Street, is the place to look for the key to market direction, is widely accepted...
...We ought to do the same with social security funds...
...TOOLAN: Some critics say that the bishops should stick to moral principles and not get involved in policy recommendations regarding welfare reform, agriculture, and third-world debt...
...No monetary manipulation can reach the source of dislocation...
...The government admits it has no reliable data on inventories, where the trouble is...
...It's a toss-up whether debtors or creditors are hurting most...
...The division of labor makes sense...
...TOOLAN: We keep hearing economists say the bishops' hearts are in the right place, but...
...they will be disabled...
...We desperately need more vocational education...
...The down payment in the first year was $214,000...
...TOOLAN: What final mark would you give the bishops for their effort...
...What ratio is productively employable...
...Any time there is a glut in this region, you know there's a super glut everywhere else...
...It is already happening in Germany...
...I know of no one who is for a strong defense who is against government involvement in many aspects of the economy...
...Janeway's articles in Fortune were the first to raise the subject of economic mobilization of national resources for strategic planning...
...TOOLAN: You have spoken elsewhere of the declining middle class...
...TOOLAN: Are you suggesting that the bishops' "preferential option for the poor'' might well have been aimed at the average parishioner...
...TOOLAN: Do you have reservations about the bishops' letter...
...How many of them are not productively employed...
...One bears paper, installment paper, mortgage paper, financial instruments-the debt structure, money...
...The next time we have a boom, we'll have an inflationary disaster if we don't make provision to get these bodies into the economy...
...economy...
...If you don't provide these services, it's panic...
...Could you give a specific example of the "but...
...JANEWAY: Let's not call it economic rights...
...He said, "If the Constitution which we're called upon to interpret had meant us to grant sovereign attributes to the market and thus to pure, economic efficiency, it would have been written differently...
...Yet statistical hype dominates the media...
...Statistical superficiality, plus outright official fraud, are concealing the accelerated deterioration of the economy...
...If provision isn't made to change their status, to extend the dynamics of the society to their situation, they won't simply be the poor...
...Assuming that the economy grows, that investment will appreciate much faster and have a higher annual return than government securities will...
...As the consumer goes, so goes the economy...
...TOOLAN: In the bishops' terms, you're talking about "economic rights...
...Whenever an industry went bad in Europe, you socialized it-and the former owners wound up in the south of France on yachts...
...JANEWAY: You've got it...
...So why had the Gulf manager shut down his refinery...
...Each has its functions, and they had best cooperate...
...Besides, if the claims made for the forces of supply and demand were correct, there never would have been an oil inflation...
...The bishops don't consider the business cycle, those interruptions, periodic slumps, recessions...
...The dilemma is this: The economy can't go into boom with the unemployable poor on its back...
...In recent years, the gap has widened...
...Debt troubles plus income fears are stifling the half-century consumer boom...
...The laxity of secular education in this country is the biggest drag on the economy...
...Which should have meant that the price would come down...
...The way I see it, these funds can be used more creatively-both as capital and for the purpose of extending the social contract...
...So let the bishops take no guff...
...Including George Bush, who wants to be president...
...The Wall Street Journal ran one of those front page stories which begins one way and ends the other on the inside page...
Vol. 115 • June 1988 • No. 11
