OUR PROPOSALS FOR THE CRISIS

...Worse, it will find itself standing by while sophisticated conservatives carry out a program much more "radical" than that offered by the Left...

...The last time the social contract was rewritten, he said in referring to the '30s, business simply opposed the whole process and as a result had no influence upon it...

...First, the companies that are major suppliers of COMMENTS AND OPINIONS 103 the government, like Lockheed, should not be subsidized...

...It proceeded by way of the special oil tax deductions of 1950, 'a foreign aid program for reactionary Arab anti-Communism passed behind the backs of the American people, through the oil import quotas, the depletion allowance, the expensing of intangible drilling costs, and the rest of the measures that added up to a multibillion-dollar annual gift to the richest corporations in the world...

...Fifth, a national planning mechanism should be established, both as a part of the office of the Presidency and as an office under the control of the Congress...

...And third, we counterpose a democratic Left program to the corporate planners, one that moves in a clearly socialist direction but is not, in and of itself, socialist...

...That is why the 1970s, in contrast to the '30s, may well see two programs of structural change, not one...

...Nicer than to auto workers who make the cars...

...That is why we need deficit-spending for social purposes...

...This time business should be in the forefront of change...

...As part of that full employment program, we advocate the immediate creation of 1 million new public service careers...

...In the area of food crisis, the American government has been paying agribusiness billions not to produce ever since the '30s...

...IN EACH of these areas, the capitalist system, in its sophisticated corporate statist variant, does not work...

...We must, just as Felix Rohatyn says but not for his reasons, husband our resources more carefully, allocate them more prudently, and match our financial capabilities with our social priorities...

...The Federal Reserve then extended credits of $1 billion to Franklin National...

...It suffered $46.8 million in losses in the first five months of 1974 because of the activities of foreign speculative interests that controlled it...

...It is not a finished program, a blueprint for social engineering, but a direction to be taken in which the details will have to pass the test of trial and error...

...The essential fact is indeed that the "prior and present economic mismanagement by the Western governments" is a critical factor...

...As the Wall Street Journal put it, the oil price increases are a threat "only because of the prior and present economic mismanagement by the Western governments themselves...

...At a time when the oil-producing countries are levying an initial tax of $60 billion a year on the rest of the world, the U.S...

...The Brookings Institution tells us that the 1975 budget proposals conceal major new investments in weapons systems...

...They should be nationalized...

...It will be necessary to take steps toward the socialization of investment in the United States...

...So long as the dominant economic institutions in this society are corporate— so long as basic investment decisions are made in the executive suite—then the government can cajole and bribe with its subsidies, but it must act prudently so as not to disturb the private sector as it takes charge of the social process of economic accumulation...

...That is sound good sense, and the corporations are going to propose just that in order to save themselves from the dead end into which they have led the nation...

...Conrail, it is reported, will need between $3 billion and $5 billion in outright grants or long-term loans...

...If, however, the democratic Left contents itself with even such an impressive array of immediate reforms, it will forfeit one of the greatest opportunities for much more basic social change since the New Deal...

...We made ourselves vulnerable to OPEC by a generation of federal policies that followed corporate energy priorities rather than those of the common good...

...Vermont Royster, a columnist for the Wall Street Journal, recently and proudly resurrected Engine Charley Wilson's famous mot that what was good for the country was good for General Motors, and vice versa...

...This can be done in a number of ways...

...Instead, the bank should have been nationalized, as Congressman Reuss proposed...

...But we will not have nationalized anything, except the costs and debts of the system...

...Not only are their personal hopes dashed...

...Moreover, in New York State we are now being treated to the terrible spectacle of how medicine for profit—in this case nursing homes for the aged paid for with government monies—can speculate on human misery...

...In the Great Depression, conservatism was not simply conservative...

...After all, as the Wall Street Journal proclaimed a short while back, profits are only another name for savings...

...Now, he continued, there is going to be another revision of that contract...

...There is no automatic "final conflict," no inevitable apocalypse, built into capitalism even though some radicals mistakenly think so...

...He did not need to do so...

...That is one of those magnificent half truths of the capitalist epoch...

...Second, we know that, unlike the situation in the '30s, there is an imaginative corporate plan to accomplish those structural changes in order to benefit the rich in this society...

...That plan would be indicative, since it does not require the public ownership of the heights of the economy as a precondition, but it will only work in the people's interest if the plan can be enforced by way of a vastly enlarged democratic participation in investment decisions...

...On the contrary, we see the more basic- changes we propose as the fulfillment of the economic and political logic of desperately needed increments of reform...

...As soon as it 102 COMMENTS AND OPINIONS could stand up on its own, the RFC, having socialized its risks with public funds, would retire, leaving the private sector to enjoy the profitability that a gracious government had restored...

...What many will call state planning would, to the average family, be no more than prudent budgeting...

...But the companies will remain in private hands...

...We must move toward the socialization of investment in America...

...And our inflation results, in some considerable measure, from the fact that the New Deal, thank God, deprived capitalism of its most effective antiinflationary tool, mass unemployment, but provided no substitute for it...

...It is, as you will see, not one demand, but a series of demands with a common thrust...

...This fact, however, is not simply known by socialists and radicals...

...the traditionalists are for the reckless wasting of the country's resources while they wait for the intervention of a free market mechanism that long ago stopped functioning...

...What we need ultimately is socialized medicine in which the society will pay all medical costs out of general revenues raised by a steeply progressive tax and under which the only question to be asked a new patient is, what do you need...

...But so long as America concedes the control of investment to private, corporate decision-makers, just so long will government intervention in the long run turn out to be a system of subsidies to the corporate rich...

...That is why we are for massive deficit-spending to achieve full employment...

...Rohatyn speaks in the authentic tones of an American Gaullism terrified by le deft arabe and our own indigenous crisis, determined to use state power to restore the grandeur of the capitalist system...

...Our current commitment in this area is only the merest of beginnings: it does not generate jobs as fast as the recession destroys them...

...We believe that this is an area in which it is possible to effect some of those economics that President Ford prefers to inflict upon the people who need food stamps...

...There is, therefore, no question as to whether there will be structural change in our economic institutions...

...This means that a new institution will be created, along the lines of the Reconstruction Finance Corporation (RFC...

...Third, the United States should establish a federal gas and oil corporation, which should be given privileged rights to develop new energy technology in the public interest and for public purposes...

...He has called upon the government to become an "investor of last resort...

...In saying this, I do not for a moment dismiss the struggle of the labor movement and the liberals for immediate responses to the recession-inflation...

...It could be a yardstick by which to measure the performance of the 300 largest banks in America that have, almost unanimously, turned their backs on voluntary Federal Reserve guidelines for consideration of social priorities in their operation...

...If they are to come from the democratic Left, it will be necessary to go far beyond the conventional wisdom established 40 years ago by the New Deal...

...Yes, profits are essential to the dynamics of the system, a fact known to those hardy souls who have ventured into Volume II of Das Kapital as well as to the editorialists of the Wall Street Journal...

...That is why it is necessary to change the very structure of the system and to assert a democratic control over an increasing portion of basic investment decisions...

...That the Journal then proceeds to a downright silly reaffirmation of the proposition that the free market will solve this problem—and probably cure the common cold—is beside the point...

...Rockefeller, whose brother has since been translated to the spheres in which social contracts are rewritten, did not specifically spell out the fact that this corporate creativity would be dedicated to corporate interest...

...Such a nationally owned bank could make socially desirable loans, refuse to speculate, and turn its profits over to the public...

...Under it, the federal government will directly own the tracks, and will subsidize the cost of locomotives and freight cars through the Consolidated Rail Corporation (Conrail...

...I leave aside any reference to that last and hilarious sentence, since I do not know of any families that receive multibillion subsidies from the government as they prudently balance their budget...

...First of all, we see the current crisis as a crisis of the system requiring structural change...

...THIS LEADS to my third major point...

...But Royster is right to suggest that, as long as General Motors is one of our chief transportation and energy planners, Washington has got to be nice to it...

...Will they come from the corporate Right or from the democratic Left...

...AT THIS POINT, the specifically socialist content of our analysis comes into focus...

...The Christian Science Monitor reports that the United States Railway Corporation will soon present Congress with a scheme that will avoid the "extreme of full nationalization...

...So it was that between 1969 and 1973 this nation subsidized the nonproduction of the equivalent of 8 billion bushels of wheat...

...I think that Felix Rohatyn and the corporate conservatives have us over a barrel—much as the Arabs have them over a barrel...

...We advocate a productive investment in the human future of America...

...David Rockefeller of Chase Manhattan signaled the change several years ago...

...We must make counterproposals, democratic proposals for the socialization of investment decisions in America...

...It changes itself reluctantly when it breaks down, but it does change...

...It would remain as a stockholder only so long as an enterprise was in difficulty...

...We must cut back on military spending and, above all, we must reject any new American involvement, direct or indirect, in Indochina...

...Our food shortage, in other words, stems more from the limitations of corporate-oriented politics than from those imposed by nature...

...The superior efficiency of the private sector will be vindicated even if it takes almost $20 billion of public charity to do so...

...These specifics merely indicate a direction...

...If anyone thinks this is fanciful, let them look for a moment at the American railroads...

...In the area of energy, our problems do not derive primarily from the OPEC cartel, even though its quadrupling of the price of oil has obviously had an important impact...

...The soaring costs of medical care have been a prime factor in inflation...

...The issue before the nation is who is going to make those changes and how...

...The nation is already running an unconscionable deficit of the wrong kind...

...We need a publicly owned gas and oil corporation to take the lead in developing new energy technology...

...It is well understood by bankers and executives...

...But even the rich learn...

...Our energy and food disasters, created by precisely such a united front of business and government, are cases in point...

...It is also estimated that Washington will have to pay the railroad creditors as much as $13 billion...

...The premise that, under such circumstances, the country has to husband its resources more carefully, allocate them more prudently, and match its financial capabilities with its social priorities would appear to be worth considering...

...The hodgepodge of reactionary measures offered by President Ford, capped by a proposal for rationing by the purse which is an allocation system designed to favor the rich and injure the poor, is utterly inadequate...

...has been capital-poor...

...Take the Franklin National Bank...

...His proposal for an RFC, he says, can be perceived as the first step toward state planning of the economy...

...We favor a comprehensive national program for health security...

...That mismanagement included the subordination of the public interest to corporate profit by the use of American power to shoulder the British out of Saudi Arabia in 1943 and to reduce their influence in Iran in 1953, in the latter case through the CIA subversion of a popular government...

...Yet the time may have come for public debate on this subject...

...We need a national plan to eliminate the incredible—and profitable—waste in the system and to come up with a unified transportation policy emphasizing mass transit...

...Second, and more generally, where corporations and/or banks get into difficulty, the government should consider nationalizing them...

...All this was crowned by multibilliondollar federal subsidies to big cars and the suburban middle and upper class, a policy that helped destroy the railroads and mass transit, isolate the poor and minorities in rotting cities, and make us the most wasteful nation in history...

...In the December 1 New York Times, Felix Rohatyn of Lazard Freres has given us an idea of what this business creativity might mean...

...it was also stupid...

...I do not urge this as a panacea...

...On the first count, let me simply and briefly recapitulate an analysis I have made elsewhere in detail...

...the nation also loses their economic output and must pay high costs for the custodial care of their suffering through unemployment programs, increased welfare rolls and, most tragic of all, through a rise in crime, family breakdown, and social pathology...

...Rohatyn is quite aware of how radical his ideas are...

...But they are also the great engine of social inequality, of antisocial priorities in the economy, of the degradation of the environment, of the ruin of the central cities...

...It would buy stock in companies and banks that were in trouble, thus giving them an infusion of equity rather than of debt...

...Millions of workers are on the streets...

...We are for a national energy policy...

...It is precisely because we are socialists that we understand that this outrageous proposal might, for a time, work...

...The items I have listed are not an exhaustive inventory of what the nation needs, but they clearly 101 indicate our enthusiastic support of the programs of the trade unionists and liberals...

...Fourth, employee and public representatives should be placed on the boards of directors of all major industrial and financial corporations with instructions to inform the public of the bias of the pricing, technology, plant location, and other policies of these corporations...

...It is not true, as Royster naively thinks, that if government pursues policies good for business in general that "they would inevitably benefit the whole country...

...It should, for example, come up with a ten-year plan for transportation and energy in the United States, after the consideration of presidential proposals, congressional hearings, and a vote in the House and Senate...

...The possible impact on this country's welfare, as well as its security, of foreign control of major enterprises has not been evaluated...