Acting Beyond Selfish Interest

...The disaffected David Stockman has concluded that the entire Kemp-Roth exercise was designed to cut top marginal rates on personal income...

...Political action committees, in the cant phrase, simply seek access to the beneficiaries of their largess...

...However, he identifies persuasive evidence of countervailing forces...

...In their heyday, supplysiders assured one and all that lower tax rates would miraculously stimulate saving, investment and growth...

...Reich, whose The Next American Frontier won the plaudits of both Walter Mondale and Gary Hart during the 1984 Presidential primary follies, refreshes his credentials as a potential adviser of 1988 Democratic contenders with his current entry...

...Tales of a New America By Robert B. Reich Times Books...

...Time cushioned former Chairman Ralph P. Davidson's impending early retirement with a $4 million package, including $185,000 for legal fees incurred by Davidson in negotiating this modest shelter against indigence in old age...

...The voters of South Dakota evidently admired him for his courageous advocacy of policies they often disagreed with...

...American top management is rewarded on an equal opportunity basis for success and failure...

...He raises his voice in two contexts...

...When Howard Baker was in the Senate he voted for the Panama Canal Treaty against the prevailing sentiments of his Tennessee constituency, who re-elected him anyway...

...Unfortunately, he rarely explains how and why the important actors on the economic stage will alter their values and behavior...

...It is, I suppose, a matter of judgment how frequently each triumphs...

...American corporations have demonstrated their incapacity to compete in international markets...

...Furthermore, astute special interests tend to adopt and shape ideas to their own specifications...

...But it did not take long for affluent Americans to realize that sharp reductions of taxes on large incomes, politically unpopular most of the time, now could be presented as public spirited stimuli to prosperity under the ideological shelter of supply-side economics...

...Yet, argues Kelman, in several respects we are better served than we realize both by elected officials and by humble toilers in Federal, state and local agencies...

...For all the noise and shouting, the War Against Poverty was underfunded and Medicaid and welfare benefits were and are pitiful by European standards...

...Sophisticated observers know that Congress, if not quite for sale, surely is available on short-term lease...

...Our corporate leaders must operate more flexibly and nimbly...

...They are responsive as applied intellectuals to evidence, plausible new ideas, and the merits of legislative proposals...

...Block grants, distributed by state and local ? fficials, shift credit and political reward to governors and mayors...

...Reich'sbookis disappointing...

...Social Security pensions automatically rise with the consumer price index...

...With the inspiration of Irving Kristol, the rich are funding chairs of democratic capitalism and conservative think tanks affiliated with universities...

...Kelman has written a far superior book that has so far received much less attention than it deserves...

...Kelman cites numerous examples of Congressional action more responsive to public than personal interest...

...Public choice theory maintains that politicians are motivated solely by self-interest...

...Reich scolds liberals because they coddle life's losers...

...Lee Iaccocca's $23 million 1986 compensation might strike one as a trifle generous, yet at least the man did make aprofitable enterprise out of an inefficient, bankrupt laggard in the auto industry...

...President Reagan need merely promise a dam, a post office, a military installation to win a vote for contra aid...

...After a decade of Presidential assaults on allegedly parochial Congressmen and incompetent bureaucrats, begun by Jimmy Carter and escalated by Ronald Reagan, traditional American suspicion of government has almost certainly been intensified...

...George McGovern, an unabashed liberal, served three Senate terms...

...Equally in need of revision are the usual political labels...

...Our Washington representatives, frantically overscheduled, rely heavily upon their own staff, committee staff, the Congressional Budget Office, the Office of Technology Assessment, the Legislative Reference Service, and the General Accounting Of fice for detailed policy analysis...

...Less sanguine than Kelman, I rather think that money more often than not prevails...

...290 pp...

...The traditional adversarial stance of unions and corporate officials is an outmoded drag upon efficiency in the competition against Japan's smart workers, hands-on supervisors and advanced technology...

...Money and ideas are both important...

...An increasing percentage of the specialists are holders of advanced degrees...

...Reich's tone is didactic, occasionally peremptory and frequently hortatory...

...Reich has fallen into the trap of even-handed criticism of both liberals and conservatives...

...As for Uberai compassion, Reich apparently needs to be reminded that at its height the Great Society lavished the bulk of its largess not upon the poor but upon the middle class—Medicare, more generous Social Security pensions, student grants and loans, and mortgage subsidies...

...Too much of the time, complains Reich, public debates oppose "us,' taxpayers and employers, against "them," recipients of benefits and ordinary workers...

...Government operates far more effectively in his view than bashers of civil servants and Congress concede...

...Liberals in the House of Representatives notoriously lobby for military spending in their districts at the same time that they inveigh against bloated Pentagon appropriations...

...A second major count against the legislators is their asserted responsiveness to big campaign contributors...

...Arthur Laffer, Paul Craig Roberts, Robert Mundell, and Jack Kemp no doubt sincerely believe in the supply-side revelation...

...Only the naïve accept this selfserving piety...

...Ideas and special interests are often allies, not opponents...

...Congress nevertheless responded to mounting economic evidence that regulation raised consumer prices and limited consumer choices...

...They are so obsessed with profit that they fail to realize well-designed expenditure upon education, nutrition, housing, and medical care amounts to an investment in productive human beings...

...Kelman also argues with some passion that men and women, among them health professionals, lawyers and social scientists, pursue public employment as the means of furthering policies they value...

...The books themselves could scarcely be more different...

...The general charge against members of Congress is that an obsession with re-election causes them to focus upon the interests of their constituents to the exclusion of concern about the national interest...

...To do so, they need to redesign factories around shorter production runs and the sort of general purpose machine tools that permit quick switches from products that lose consumer favor to those more attractive to the customers...

...Moreover, voters reward their representative for public spirit as well as lavish helpings of public works pork, and punish them for excessive localism...

...In enacting last year's massive revision of the tax code, Congress resisted the anguished screams of real estate developers, the restaurant industry and low-tech manufacturers—important sources of campaign funds...

...Reich, who has done much better in the past, contributes nothing of consequence in his new volume...

...Kelman obviously concurs with the famous concluding words of Keynes' General Theory: '...soon or late, it is ideas, not vested interests, which are dangerous for good or evil...

...He admonishes conservatives for the opposite shortcoming...

...General Motors lavished bonuses on senior managers while informing production workers that earnings were too low to trigger profit-sharing provisions...

...Since Richard M. Nixon's days, Congress has been substituting block grants to states and cities for categorical subsidies that allowed politicians to collect brownie points from several groups of recipients...

...The first is an assault upon the public choice theorists, horribly influential among economists and political scientists...

...Herecycles his earlier prescription for American management, by now the conventional wisdom in business and the media...

...His good-tempered, well-written and moderate case for ideas, public spirit and commitment by civil servants to the mission of their agencies is a needed corrective to the cynicism fostered by conservatives in and out of government...

...Why on earth should ordinary workers identify any common interest with the moguls who shape their destinies...

...Kelman, a sensible soul, does not deny the reality either of money or of local interests as influences upon Congress...

...Any harassed Congressman in short, will hear not only the lobbyists and the contributors but also the relatively objective voices of authentic experts...

...Even the three year Kemp-Roth tax cut swept through Congress in 1981 as an expression of an idea—supply-side economics, an example of the power of kooky notions...

...Time and CBS have been enthusiastically laying off staffers, presumably more competent in their jobs than Wyman and Davidson...

...All in all, Kelman has fulfilled the promise of his subtitle...

...But so long as top management, investment bankers and legal stars can enrich themselves by curtailing staff, pushing down wages and benefits for corporate serfs, and playing the merger and acquisition game, it is hard to see why they should transform their behavior, concentrate on producing things insteadofeasy rewards for themselves, and turn factory floors into cooperative quests for high quality products...

...Kelman inspects American politics and public administration and reaches largely cheerful judgments about the openness of all three branches of government to public sentiment, including strongly held minority opinions...

...Therefore they persistently spend public money to purchase votes, and dodge raising taxes to finance this nefarious enterprise...

...It is a mystery how these pundits explain Congressional efforts to raise taxes and the adamant opposition to this from the White House...

...Cash stimulates economists and political scientists just as it does politicians...

...Out of a booming economy, the Treasury was certain to collect more taxes at lower rates than from an overtaxed citizenry...

...Thus deregulation of trucking, airlines and banking was opposed by most major corporate operators...

...The practical consequence is to align him with the more conservative of the current Democratic Presidential aspirants rather than with Paul Simon or Michael Dukakis...

...Their professionalism has kept the public sector functioning even during the Reagan era...

...Reviewed by Robert Lekachman As colleagues should, Steven Kelman and Robert ?. Reich of Harvard's Kennedy School furnish warm dust jacket blurbs for each other's new work...

...Congress has thereby deprived itself of the chance to do something for the old folks in election years...

...Cooperation between workers and managers is essential...

...For the most part, Kelman describes and Reich prescribes...

...He lost a close race to Brock Adams who effectively used the incident...

...What justifies the gold showered on ousted CBS headman Thomas Wyman —$4 million in cash, $400,000 a year for life, temporary office space, life insurance, and medical benefits...

...One of their leaders, James Buchanan, won last year's Nobel Prize in economics...

...Former Republican Senator Slade Gorton of Washington openly switched his vote against the confirmation of Daniel Manion, one of the more conspicuously unqualified Reagan judicial nominees, in return for a promise that one of his own judicial favorites would be endorsed by the White House...

...Nobody is entitled to a social benefit without a corresponding obligation to improve his own skills, attitudes and productivity...

...Liberalsand conservatives share an interest in the health of corporate America, the source of jobs and rising living standards...

...Exercising heroic self-restraint, Kelman refrains from evaluation of the Reagan "revolution...