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Seventy-Seven Years of Editorial Freedom
EDITED AND MANAGED BY STUDENTS OF THE UNIVERSITY OF MICHIGAN
UNDER AUTHORITY OF BOARD IN CONTROL OF STUDENT PUBLICATIONS

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Truth Will Prevailt

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Editorials printed in The Michigan Daily ex press the individual opinions of staff writers
or theeditors. This must be noted in all reprints.

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FRIDAY, JANUARY 5, 1968

NIGHT EDITOR: WALLACE IMMEN

The Dollar Drain:
There's Gold in Them Thar Bills

A

ONLY A FEW hours after the glowing
ball slid down the pole much to the
merriment of the drunks, perverts, and
pickpockets huddled in Times Square,
President Johnson commenced Election
Year '68 by summoning his captive re-
porters, recovering from the rigors of
Johnson City nightlife, to a press con-
ference heralding the Administration's
confrontation with the balance of pay
ments problem.
Despite the inevitable attempts in the
next few months to discover a "new"
Lyndon Johnson, the list of nostrums
prepared by the President to halt the
drain of the precious yellow metal from
Fort Knox into the unpredictable water
of international finance, provides mute
.evidence of the changeless folly of the
"old" LBJ.
The transformation of balance of pay-
ments from a problem into a crisis is
just another example of the inescapable
and pernicious effects of the fiasco of
Vietnam. For while Administration of-
ficials, with characteristic candor, con-
tend that the payments deficit cost of
the war is $1.5 billion, non-governmental
observers tend to peg it nearer to $3
billion.
With the total balance of payments
deficit aproximately $4 billion for 1967,
it is apparent that a large portion of the
mmuch-heralded "gold drain" is going the
route of Washing to Saigon and finally to
a numbered Zurich bank account.
When you add the cost of maintaining
over 200,000 American troops-a holdover
from the paranoia of the Dulles Ad-
ministration-in Western Europe to
combat a potential Soviet attack, you
reach the inescapable conclusion' that
the crisis in our balance of payments is a
consequence of America's military pos-
ture. Further evidence that this is the
major source of the "gold drain" is a
comparison with America's exceedingly
large surplus of trade.
IN THE STANDARD operating manual
of the Great Society, the interests of
the state often take precedence over the
liberties of the individual. While not
surprising, the Government's arrogant
attempt to curtail travel abroad-some
form of a tourist tax is being discussed-
would be an alarming abridgement of the
freedom to travel.
As the Supreme Court has affirmed in
a series of recent decisions overturning
the convictions of visitors to such
"naughty" places as Hanoi and Havana,
freedom of travel is contained within
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the broad penumbra of rights implicit
within the First Amendment.
Attempting to employ the power of
taxation to "channel" the foreign travel
of individuals in accepted directions, is
no less intolerable-though far more cyn-
ical-than an outright denial of the right
to travel to Europe. And as is usual with
the Administration's "guns not butter"
philosophy, it is those least able to afford
it-in this case primarily students and
teachers-who will bear the brunt of
these strictures against foreign travel.
Furthermore, Johnson documented the
necessity for a curb on foreign travel by
using what can only be charitably de-
scribed as misleading statistics. For the
President cited a 1967 travel deficit of
$2 billion, but neglected to mention that
much of this outflow resulted from Expo
'67 in nearby Montreal.
THE ONLY HEARTENING aspects of
the Administration proposals are the
unintentional side-effects of the Govern-
ment's reluctant decision to limit foreign
investment. Such a decision can only
be viewed as a victory for Charles De-
Gaulle. who has been correct in his
sensitivity to the deleterious effects of
the growing American control of Euro-
pean industry.
Since the U.S. has been operating un-
der the facile delusion of "what's good
for America is good for the Free world,"
there is little likelihood that the benefits
to the rest of the world of this curb on
investment will be large or long lasting.
(Parenthetically the only European coun-
try to be exempt from these restrictions
on investment are our staunch friends
-the Greek military junta.)
UNDERLYING THE ENTIRE Johnson
balance of payments message, is the
total lack of political courage shown by
his bowing submissively to the heavy
handed pressure of the common wisdom
of fiscal orthodoxy.
By blithely accepting the "gold mys-
tique," Johnson failed to take advantage
of an ideal opportunity to free the dollar
from its gold backing of 25 per cent. The
implications of this are significant, be-
cause $10.6 billion of the $12 billion in
Fort Knox are pledged by law to back
the dollar.
Furthermore, Johnson appears to re-
gard the system of fixed exchange rates
as something immutable and inherently
advantageous, but it is a highly likely
contention- that this country would in
the long run be better off if the dollar
were permitted to float freely in the
foreign exchange markets.
But most importantly the public must!
not regard the balance of payments
problem in isolation. It is a problem
which is a logical consequence of the
widely held premise that American mili-
tary might is the panacea for all the
world's problems. And for a change, the
American people should judge these new
restrictions in light of benefits received.
-WALTER SHAPIRO

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IN 1967 THE UNITED STATES began to reap the hardship that
it had sown. The reality of a thousand trouble spots, from
the ghettoes of America to the jungles of Asia were burned into the
nation's conscience, and we will never be the same after it.
It seemsrnow that all the tragic events of 1967 were inevitable,
that they were merely extensions of the world's own miscalculations.
The Russian and American arming of the Middle Eastern powers was
a powerful invitation to bloodshed. Though American officials claimed
to see "the light at the end of the tunnel" in Vietnam, any light the
American people might have seen was obscured by the bodies of the
dead and wounded-Americans and Vietnamese. And in the nation's
cities, violence erupted over grievances so long ignored that the best
solution America's leaders could hurriedly devise was force.
None of these problems-and the countless others that occupied
and angered us through the year-were surprising events by them-
selves. But their simultaneous occurence-brought to life by television
in every American home-made us all sense that order was disinte-
grating. The American dream was becoming the American nightmare.
Of ,course, it was a very good year in many ways. Science gave
hope to man's conquest of disease, through the much publicized heart
transplants, the synthesis of DNA, and innumerable less-touted ad-
vances in laboratories, hospitals, and universities around the world.
The United States made significant progress in space exploration,
though suffering a setback as three astronauts were killed in a
launchpad test of their spacecraft.

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The nation continued its unparalled prosperity, but even this was
over shadowed by the appalling poverty in the midst of plenty. And so
it seemed that every American achievement was balanced, if not erased,
by a strange counterforce that stifled the nation's desires and aspira-
tions. The performance of the American soldier in Vietnam, a thank-
less task of endurance that could be extolled once upon a time as
gallant and brave, became a bitter target for war critics. The military,
which in decades past seemed a positive agent for America's benevo-
lent mission, suddenly has become an omninous reflection of violence
and the military-industrial network that influences so much of U.S.
policy.
And thus the American success story-in dollars and cents and
good deeds-can be read to the world, but it isn't really believed,
mainly because we don't quite believe it ourselves any more. If 1967
taught us that a nation-however strong and rich-must eventually
confront the consequences of its actions or inactions, then perhaps
there was some ironic justice in the year's events. If nothing else, the
coming year with its elections, will show what the United States
learned, or failed to learn, in the past 12 months.
"By an inevitable chain of causes and effects," the Virginia
statesman George Mason once said, "Providence punishes national
sins by national calamities." With the arms race and war abroad
coupled to social injustice and poverty at home, 1967 has shown the
restless workings of cause and effect. The nation still awaits the
verdict.
-ROBERT KLIVANS
Editorial Director

"Bronze, hell! ... That's 24 karat U.S. Gold ...!"

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