What must be done; Money Sources

Hello my name is Percy Sutton. I am the president of the bar of Manhattan in the city of New York are for the next 30 minutes I'll be moderating a different kind of panel program. It is run of a series called What must be done. The title of these programs what must be done has two meanings. First it poses a demand for urgent solutions to America's greatest problem the crisis of there have been ghetto and the black community but it also refers to what can be done and what must be done by you the listener because nothing stimulates action as effectively as the demand of an Arabist population. This series of programs takes as its point of departure the award winning issue of Newsweek magazine published last November the 20th on the Negro in America. Today's topic is money sources. That is where the money will come from to solve our urban problems. The members of our panel are Mr.. Yet the editor of Newsweek Mr. Dick necessary have the old University Department of Economics of New York University Mr. Robert

Theobald writer on economics and Dr. Vivian Henderson president of Klock College of Atlanta Georgia. I'd like to ask Mr. Haas been at the at the editor of Newsweek magazine to begin today's discussion. Thank you Mr. Sutton I would say to summarize the Newsweek findings in a brief 30 seconds or so it would boil down to the fact that this this problem that we're talking about today is as you said the most important domestic problem that faces our country today and probably that has ever faced our country. We concluded in broad terms that a reordering of national priorities was necessary in order to meet this great problem of ours and the reordering I suppose has to begin with an early end of the war in Vietnam. Our economy is very much strained by this war and by other burdens upon it today something like 30 or

35 billion dollars a year being spent on the Vietnam effort. And we don't think it's realistic to look for the kind of money that we need for these programs. Unless that burden or a large part of it is removed what we look for is the necessity to spend between 20 and 30 billion dollars a year for a minimum of 10 years to bring this society into phase with it. Ideals missed in next year. The Newsweek special issue. And the many proposals that have been advanced in the last few years involve what seems to be a great deal of money 20 30 billion dollars as Mr. Eliot mentioned. But actually it's not very much money compared to the size of the national economy. We have an eight hundred billion dollar economy. The federal government is the only source but even with federal financing we have

to choose priorities among the programs. And it seems to me that we have to demand that federal government support those programs which can only be supported at the federal level and by this I would include income maintenance drastic improvement in health services for the poor and very heavy expenditures and education in the large cities city of all. Well it's obviously quite true that there's a lot of money around. We have gross national product. We've been told of a hundred billion dollars in a potential increase in that of 40 billion dollars a year. But the problem is that everybody wants more than their fair share of the 40 billion dollars already at the present time. The estimates are that even if the Vietnam War ended not very much of that would become available. And I think we're going to have to go a lot deeper if we're going to

find out where the sort of money that I think is going to be required is going to come from. I'm not at the moment up to mistake I see the unions in a sense trying for more than they're entitled to any level. I see management trying for more than it's entitle to. And I think if we're going to give money to the poor and to the people and to the areas of the cities that need it by going to have to have a new feeling about rights and responsibilities in our culture Dr. Henderson. But I would like first of all to say that I'm not convinced that we have to wait on the end of the Vietnam War in order to began a massive program to generate the kinds of opportunities jobs and income that are necessary in order to correct the various problems that we have. Very few people in this country deny the fact that the haves and the have

nots tend to be drifting further and further apart in terms of the class differences and. Opportunities and access that in this country we on the verge of a trillion dollar economy in this country. With a trillion dollars it seems to me that we ought to be able to effect a concept of economic dividends to the poor to the people who have been shunted out of the system. That would be meaningful. And so far as generating opportunities and access and I want to emphasize access because this is extraordinarily important. Secondly I'd like to point out that. We are owed really in essence talking about when we say the crisis of the citizen the crisis of the urban areas let's face it we're talking about a crisis in race relations in this country. And there's no point in obscuring it under some euphemism called Urban ism known as other

stuff. So Ari I believe on the one hand that while we must have certain priorities. Obviously between. A lot let me put it another way. While the priorities are not in my judgment solely in terms of how do we spin health education and welfare monies. The prior ideas really are. How do we spend our public funds between space and a lot of other philos kinds of things. And I don't mesti kinds of problems. So I would say that the sources of funds are there. It's just a question of why we do we have the will and the intent and the desire to really channel these to where it's going to correct some of the problems we're talking about. I don't intend to marry with much of what Dr. Henderson says. But I would challenge the availability of the money. You only have to look back a week or two to remember that the Congress has imposed on the president a

six billion dollar cut in the upcoming budget. And you know where the 6 billion dollars is it is going to come out of. No I would not on the other hand say that all of the what you refer to as frivolous expenditures in space are frivolous. I would certainly inspect those very closely inspect some of our antiquated farm subsidy program and bring some other of the programs that have been built into the system up to date. But I do think that under current circumstances it's going to be very hard to find the kind of money that we're talking about to produce the kind of programs that we want. You know me I just comment. That's far gentlemen you've discussed the economy. You've suggested that Mr Dawkins and you've suggested that we ought to begin now. You've suggested that we cannot have money available to us you'll identify that money is coming from the federal government that money which is necessary to not are not enough anyway. Exactly as long as we are fighting the war in Vietnam of course I'm anxious

to have a cessation of the war in Vietnam so I am too I want to make that point. But I am concerned about whether or not. We ought not get started now on the programs can we afford to wait for the end of the war in Vietnam. And isn't it true that even after the war in Vietnam. In that we're going to be if we follow our practice in Korea are we going to keep troops in the Far East so that we'll still have the outflow of money and he war economy and still not have it available for domestic use. Well I would say that you're going to have that pressure prep plus a lot of other pressure from the military as soon as the Vietnam war ends. The military is going to come piling in saying that this program that program and the other program that has been postponed because of Vietnam now has to be re-instituted. And this is going to be a very serious problem and we're going to have a have a national commitment that we don't have now. This is the whole point I was trying to make is that.

Insofar as the aggregation of funds are concerned. I think we can see that their funds are here. But the question is and Bob put his hand on it then is the extent to which v. i. That is through our political institutions. I will remain to vote these ones and make them available. And I believe that we simply have to recognize the fact that alterations in our present institutions the welfare institution the Agricultural Department and all of these areas these must be altered. If we want to be able to channel the funds to where they can do the most good for example. If I take one more second. When I look up and see that a senator from Mississippi is able to take thirteen thousand dollars a month from the federal treasury to keep land out of production that

the people that were farming this land and had some semblance of livelihood and yet he gets it without even raising a shovel. It seems to me that when we have this kind of thing continually We do have a serious problem as to how this these kind of funds can be channeling to the best direction when that senator gets that money a 13th out of time but still just in a sense NASA Mississippian when that center to get set $13000 a mark it's called a subsidy. Right and in fact $13000 a month went to a lot of poor people who would be called welfare. With me right now I think you see I think the great problems here because in a sense as soon as we start talking we really get away from the financial question we get to a question of will you know and I think this is healthy because our assumptions that people get what they deserve in our culture of based on an economic theory which is to say the least a bit obsolete.

In order to prove that in a sense each of us gets what we're worth you have to have some very strange assumptions indeed which might have had some validity in the 1900 when they conceived were conceived but don't at the moment. Those assumptions were that all firms were small. There were no labor unions no government intervention in the economy and all information moved perfectly. Now today wealth is distributed on the basis of power. Basically economics is a branch of politics and up to now we have allowed certain groups in our society power which has allowed them to get a large amount of money. Other groups have been deprived of power which is also the problem. Deprive them of money. I think if we get caught in the trap in the sense of saying how do we reallocate within our present conventional beliefs were finished before we start because it is quite clear that cannot be enough reallocation within our present sets of beliefs. In my opinion to change the society fast enough I think we have to go right back to bedrock and ask who is entitle to what and for what reasons and forget that the economics

forget the economic theories we're presently using which are no longer about what to think next year. Well I don't think you have to accept Mr theory of theories about the nature of the economic process to come to the same results that he comes to. I agree to that. There is a very this is very very considerable it's not a matter of belief and will but it's it. It's a will even within the the structure of government and what the government in our society does a very large percentage of the country's gross national product is absorbed by government and spent by governments about what parts absorb I've got about 30 percent. OK I got it all and spent spent in a variety of ways now there. We can all agree to spend a lot of ways we despise such as the Vietnam

War and on wasteful farm subsidies and and similar obviously obnoxious things but there are also there's a great deal of money spent on things that are by themselves nor less worth the kinds of things we're less worthy. Conventional middle class thing and this is where the this is where the crunch really comes that that the way the government spending process in this country works is that middle class people do rather well. Out of the process we have large amounts of government money spent on subsidizing higher education which is a middle class phenomenon pretty largely just a just a take something that's very close to home for me and you can go down the list of government programs now that the very fact that we operate so much of our government through state and local governments rather than through the federal level makes it much easier to operate a government for middle class people supported by taxes paid

by the rich by the middle class and by the poor as well. But as long as we have this kind of structure the government is going to be tending. But the question is what what can we do. And so far as government approaches are concerned for example now we've got a lot of things that economists social thinkers philosophers poor people would put in that vein a talking about for example. When you talk about the problems of the ghetto. Jobs income education health housing is the bread and butter issues. Now the government really isn't doing a whole lot more in these areas and it's been a decade ago proportionally to our total aggregate wealth and income and what I'm arguing is that while we see a lot of

ad hoc programs that the government federal I'm talking about it really hasn't done a whole lot more than it did 10 years ago before we got on the bed of trying to do something about poverty problems. Tell me now Mr. Elliot Mr. Aspen idea you perhaps supervise the Newsweek series as the gathering of the information shared me. You did a lot of writing with regard to it. We've heard discussions here thus far with regard to government's role and where is the money going to come from to solve the urban crisis and apparently only government is going to supply this. Yet there is a large segment I think to a larger segment of society that is believing that private industry the private sector is going to do a great deal in solving the urban crisis. What has been your client thus far and I'd like if you are the gentleman. Think about this. Well actually a private just a sudden. One of the few encouraging signs that we turned up and a great deal of research that we embarked on in this project last fall

was that at long last the business community and in particular the big business community was getting aroused about this. They may have been aroused for a variety of motives ranging from altruism to simple fear. But the fact was as we discovered to our own satisfaction that the big business community was beginning to act in the area of providing jobs for the hardcore unemployed. Now I don't think that. Any of this can be solved by a simple choice of the federal government or private sources. I think that has to be a national commitment involving every segment of our life and I think that the private sector of this economy is a tremendously important one that can do tremendous things.

But I don't think that it can do it alone by any means. And I think that it would be a drop in the bucket if it were not for a major massive federal programs. But on the other hand just to round it out I don't think the federal government can do it alone either. How does anyone here have any idea percentage wise that we play with this for a moment percentage wise as to the total money necessary for curing the urban problem over the next 10 years as suggested by just as yet how much of this money what percentage of the total money could be generated by private from the private sector. What sees me we ought to be we have to differentiate between two things though. We talk about using the private sector visa vi in relationship to the public sector. We don't have various governments. I don't think we ought to get hung up on the question as to whether we're just talking about the federal government coming in and handing out money or had it not jobs.

The fact of the matter is that many jobs in our economy today much of the income generated as you point about a 30 percent is already generated by public expenditures. How many people would be out of work today if it were not for the defense industries. These are guaranteed jobs. So when we talk about the kind of thing most Eliot talked about here I don't want to get hung up on whether we're going to come up and make some work or make some income. I'm talking about generating some jobs and income through private enterprise and otherwise. Yeah but I would think I wouldn't subscribe if I may just interject. I wouldn't subscribe to your suggestion that the. Millions of people would be out of work if it were not for the defense industries. I'm sure that there were deer will support me on this. Well I don't think that you will find in the data post career

would support you very well on it. I don't think he's 68. Well I'm talking about 1968 with the reference to other past experiences with cutbacks in defense expenditures. I must admit every time I talk about Buddy I get more and more frustrated because in a sense we I think we'll lose language which is so far away from people and and a sense I think so far away from us you know what is the difference between public and private. Today I know we make some very sharp distinctions but so much of private industry is no longer a crisis. It depends on the continuing flow of money from the government. This society in a sense is now so complex that the patents which we use to analyze it really don't do very much and i as in a sense go back to the point I was trying to make which is we have a certain amount of money we can as a society decide to use it in various ways. And at the moment we are deciding because in a sense we have a middle class Congress and middle class decision

makers to use it in ways which do certain things. If we're going to do anything about the inner city we're going to do anything about the rural areas and I do hope we don't forget them and a good thing concern about the inner city recruitment. We're going to have to think through all new methods of getting money out. And I'm sure they will be very radically new and different and seems to me that this is where we have so far failed. We're still looking in a sense to use the old instruments for a totally new job we have never committed ourselves it seems to me to eliminating the ghetto and that isn't simply a statement of moving the ghetto which is what we've done many times we moved it both in terms of job growth in terms of people who are in it. This time I think we're saying something profoundly different which is we will no longer tolerate a ghetto. And if we're not saying it as middle class people who are really sitting around this table I can assure the people who are listening that there are people who are saying it took whom we had better listen if we're going to survive and I think we've got to start being much more imaginative now in terms of OK what are the new mechanisms by which we find this

money and I'm not sure that talking back into the private public. Issue really helps us to move ahead of maybe gets us more caught up in the old adage that they have a moment gentlemen let me say this to you each Monday night I sit and for almost two hours I sit in our answer questions posed by people in the Harlem community in New York City. The guy in the street who calls in the lady in her home when we talk about the private sector they understand this. They relate private sector to the urban coalition things of that nature. And I've often had the question ask what is the private sector actually doing they don't see private sector what is the urban coalition doing is there danger that there are bad correlation publicity is given to the urban coalition and what it might do so that we don't place the proper pressure on the federal government and state and municipal governments and for that reason I ask the question and I'm very single minded is very good. I want to know what do you really hope that the private sector will do.

World don't you. Well I you know I tend to agree with the statement that the Kennett Galbraith made a few months ago about this. He said something to the effect in much more elegant language like you stated. But the private sector. Would respond as it has to countless appeals in the past to its social conscience which is to say that is the private sector would announce its whole hearted willingness to respond and will do nothing and that the only way to get the private industry involved in this is to change the whole set of financial incentives either to tax money away from private industry and spend it directly by government or provide a set of financial incentives to to encourage private industry to do the right thing and penalize them for doing the wrong thing. Now it seems to me that something along those lines. Was can be found in the

legislation that Senator Kennedy was proposing which was was to say we don't expect any altruism from private industry but we will we will change the set of financial incentives through altruism. Our fear as suggested by Mr Osborne the private sector may make a contribution but will someone tell me whether they think that this private contribution will be 10 percent of the total need apply our open crisis is 11 percent 20 percent 50 percent. So this guy in the street will have some concept of what is being done by the private sector. While I think this sudden that we talk about percentages. Private versus public. I was you talking about whether they do it through their own accounting and bookkeeping and management system are do they peer through the process of taxation. Dr. Henderson as one who lived in Texas for a while as you did in my old model of Prairie View would you please tell me a Texas language

whether or not the urban coalition and all the other proposals by investment of monies gain through industry in the ghettos and perhaps at the edge of the old plantations. Whether or not we have a reasonable possibility in the future of making some indentation on the crisis that is upon us now. Well I like two points very quickly. One is that I must say rightly or wrongly I am impressed with the minuscule kind of social posture that has recently been assumed by private employers and businessmen. It's it's miniscule to be sure. But I have been impressed with at least their extent to which they've covered you know the kind of thing that the billion dollar investment by the insurance industry itself or so on. Now whether it's out of a fear of profit motive or a social conscious it's immaterial to me.

But by describing it as a minuscule you're suggesting that we better not go to sleep expecting precisely I will say look it's not all about you know I I'm getting a little I did raise my second point all right. Ed no point Harlow and the present state of me is do I believe that the private sector under present arrangements of our institutions are taxed. SEC taxation particularly well do this voluntarily. This must take approximately. Out of our increased gross national product which we estimate over the next 10 years of things continue to go up the next two or three years will be 30 billion dollars a year. If it goes like it is we need to take 30 to 40 percent of that through the form of government taxation and otherwise to invest in the kinds of things we talk to my whole family is who is a writer on economics Mr. Robert he of all has just said he's getting kind of frustrated and he has only one minute

to be frustrated before the end of this program. However in a subsequent program of 30 minutes duration we're going to all of us when we get together people discuss their side of the table. It seems to me that the way you put in putting the question is does it sounds as if the government is doing something massive and person isn't and I'm really not willing to buy this I find nobody is doing it. Oh I quite agree and I actually you know the question is how are we doing now. You see when you see it I'm not sure you can do it this way. If you move a bank into Holland. OK yes that's partly a business decision is partly a marginal social decision and it may have some very important effects. We could move some decent stores into Holland that could be partly a good business decision. And what I'm saying is I'm not sure the accounting was this easy. But I'd like in a sense to close I suppose my feelings on this program is that I think we're saying that we'd better bring pressure both on business and

on government. If anything significant is going to be done about this issue and I don't think we've even begun to bring the sort of intelligent creative pressure on government and business of which we're going to need of again to solve this rise of. Thank you very much Mr ladies and gentlemen this concludes today's edition of WHAT MUST BE DONE. We've not really made a decision as to what must be done. So we're going to keep you on pins and needles waiting for our next program where we will actually state what must be done. We by no means think of course that we've done an in-depth study of the problem but we do hope that in our very next program we're going to have the same protest events come back and give us the solutions out perilous work. It's rather theater all right or an economics ducted necessary at New York University. Dr. Vivian Henderson of Clark University and started an editor of Newsweek. Please listen for the next program in this series when we will cover another aspect of America's urban crisis. What must be done was created and produced by Sam changed

the radio in New York City in cooperation with Newsweek magazine. I'm Percy Sutton saying thank you for our panel this program was distributed by the national educational radio network.