Et Tu, Mr. President?
SCHWARZ, JOHN E.
Perspectives ET TU,MR. PRESIDENT? BY JOHN E.SCHWARZ AccoRDrNG to Ronald Reagan, many Americans-with reporters, television commentators and academics leading the parade-have for too long talked in...
...In our unbalanced negativism about our past, we largely ignore the powerful economic accomplishments of those years and concentrate, rather, on areas of perceived disaster...
...No other industrialized country-not even Japan and not West Germany-generated new jobs at anything approaching the rate of the United States...
...Its seductively tranquil-izing effect can only result in our asking less of ourselves as a nation than we did in the past, while making us believe it is more...
...Yet, while our rate of inflation did increase, we were one of the best inflation-fighting countries of the decade...
...Today unemployment, poverty and other dispiriting economic and social conditions are far more widespread and linger far longer than we would have tolerated in the 1970s...
...Instead, America's balance of manufacturing trade with foreign nations remained steady, registering a positive $4 billion both at the beginning and the end of the decade...
...Significantly higher inflation was experienced by our biggest competitors, such as Japan and France, not to mention Britain and Italy...
...It should further be pointed out that those who speak of our economic failure often refer to the fall of the American dollar over the decade-allegedly the result of our decline in international competitiveness...
...Each time double-digit inflation occurred during the decade, it was a direct outgrowth of soaring energy prices...
...The aerospace industry, power tool producers, electronic computer manufacturers, chemical companies, and most of America's machinery makers all expanded their exports by 400 per cent or more in the single decade, accounting for a $50 billion increase in exports among these industries alone...
...Setting a postwar record, America's economy generated enough jobs to employ 18 million (or 22 per cent) more people in 1979 than in 1970...
...The poor image of the 1970s in providing new jobs for American workers is far off the mark as well...
...Now, too, our economy is saddled with projected budget deficits soaring to $200 billion, several times greater than the largest of the 1970s, so that interest rates hover at levels decisively higher than at most points in that decade...
...It improved the average productivity of each of its nearly 1 million workers by a stunning 40 per cent from 1970 through 1979, while at the same time its yearly sales of cars, trucks and buses climbed by 2 million vehicles, a long-overlooked strength that is being "rediscovered" inthecurrent rebound...
...In the single decade from 1970-1980 America's industrial production -the very foundation of our economic strength-rose by 40 per cent...
...What troubles me is that the President himself often acts otherwise, particularly when talking about the economy...
...lose their ability to compete in foreign markets in the 1970s...
...In the 1970s, too, the nation's manufacturers raised their productivity (the output of goods for each hour of labor) at a rate surpassing 25 per cent, equaling America's postwar experience generally, and that of the highly-touted 1950s in particular...
...Everywhere he goes, it seems, he speaks of the economic decline of the United States during the past generation and the nation's growing failures over these years intheareasof industrial production, international competitiveness, inflation, and unemployment...
...Nevertheless, with the beginning of an economic recovery-albeit one very long in coming-we may indeed begin to look at it all as success, relative to the way we see the 1970s...
...Fewofus seem to be aware that our rate of industrial growth in the 1970s outstripped every major Western European nation, including the envied West Germany, and climbed at virtually the same rate as Japan's...
...Even more unwelcome than the possible hypocrisy here is the President's misrepresenting the record of the past to a degree that few have noticed...
...We frequently hear it said that runaway inflation wiped out almost all of the growth of income that Americans gained in the 1970s...
...America's motor vehicle industry, frequently the President's prime illustration of a declining industry, also fared better than we normally assume...
...Since 1980 our improvement in manufacturing productivity, the key to our competitiveness, has slowed compared to the strong advances of the 1970s...
...In the President's "model decade," the 1950s, real per capita income growth after inflation was no more than 13 per cent...
...11 does not honor, let alone benefit, America...
...That is not true either: Real income per American rose by 23 percent over those 10 years, even after discounting for inflation...
...Nor did our manufacturers as a group John E. Schwarz, Associate Professor of Political Science at The University of A rizona, is the author of America's Hidden Success: A Reassessment of Twenty Years of Public Policy, to be published this month by Norton...
...Among major Western nations, only West Germany had a lower inflation rate than we did...
...To get down to specifics, directly contrary to the image the President conveys, the nation's economy excelled during the past generation, as even the record of the much-maligned 1970s shows...
...But the dollar actually slipped little on average in the 1970s in relation to the combined currencies of our trading partners, and not at all in the last half of the period...
...In contrast, the economy of the 1950s added fewer than 7 million jobs, less than a 15 per cent increase for the decade...
...The President tells us that inflation was a notable failure of the American economy in the 1970s...
...In fact, excluding the years of hefty international oil price increases, only once during the 1970s did our price level rise above an annual rate of 7 per cent...
...And they were by no means the country's only industrial superstars...
...BY JOHN E.SCHWARZ AccoRDrNG to Ronald Reagan, many Americans-with reporters, television commentators and academics leading the parade-have for too long talked in unduly negative terms about the nation and its accomplishments...
...Passing with so little challenge, his misrepresentations in effect reinforce the public' s own negativism and add to the overwhelmingly bleak image that most of us have of our economy's recent history...
...At the very same time that the President asks us to accent the positive, he play s upon the penchant of most Americans to diminish the nation's record of the last decade...
...Despite the surge into the labor market of 30 million young adults born during the baby-boom years, unemployment rose by less than 1 per cent during the 1970s...
...Finding sometruth in this view, I support the President's call asking us to adopt a more positive outlook...
...In turn, our low estimate of yesteryear's performance-the "grim picture," to use the President's description -leads us almost inevitably to ask less of ourselves as a nation since nearly any present achievement, however mediocre, can be made to seem desirable by comparison...
...If some sectors experienced difficulty, many others blossomed...
...Diminishing America's record of the last decade may bring praise to what we do now and bestow credit on those who lead us...
...This falsely encourages us, as we measure the present against previous performance, to view our current failures as akin to successes...
...America's industry, meanwhile, is struggling to surpass the level of production already reached four years ago, in 1979...
Vol. 66 • November 1983 • No. 22
