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Seventy-Sixth Year
EDITED AND MANAGED BY STUDENTS OF THEUNIVERSITY OF MICHIAN
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,I

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

WEDNESDAY, MARCH 29, 1967

NIGHT EDITOR: DAVID KNOKE


A Word of Thanks

YEAR-LONG SEARCH for a new
University president has ended with
the appointment of Robben Wright Flem-
ing to succeed Harlan Hatcher.
The Regents, and particularly Robert
Briggs, are to be commended on a fine
and thorough job of selection. They work-
ed closely with the faculty, student and
alumni advisory committees. They com-
piled extensive information on all can-
didates and conducted interviews with
leading prospects. In their final days
of decision, they once again consulted
advisory representatives and joined with
them in interviewing Chancellor Flem-
ing.
The whole process exemplifies the
smooth workings that can be realized be-
tween various factions of the University
community. It has demonstrated that
traditional opponents can cooperate read-

ily in an atmosphere of trust and re-
spect.
0 THE REGENTS and Robert Briggs,
chairman of the Regents' Presidential
Selection Committee, to Prof. Arthur
Eastman afid his Faculty Advisory Com-
mittee, to Gretchen Groth and her Stu-
dent Advisory Committee and to the
Alumni Committee, we extend our grati-
tude.
And to Robben Fleming, we give our
warmest welcome. The appointment proc-
ess has indicated that he will have the
support of all interested members of
the community, and he could do no bet-
ter than to further the spirit of coopera-
tion with which his selection was made.
-ROBERT KLIVANS
Editorial Director

FOR ALL PRACTICAL purposes, Robben W. Fleming
became the ninth president of the University of
Michigan last Friday evening over an extended dinner
meeting in a private dining room at Detroit's posh
Ponchartrain Hotel.
The special session to consider Fleming on Fr iday
was called after he notified the Regents that he had
been offered the presidency of the University of Minne-
sota, March 19.
Because he was a prime presidential prospect all
the Regents wanted to take a close look at him before
it was too late. Other top contenders like Franklin
Murphy, Chancellor of the University of California at
Los Angeles, and U.S. Secretary of Health Education and
Welfare John Gardner had already indicated they would
not take the post. The only other serious contender,
University of California Berkeley Chancellor Roger
Heyns, lacked sufficient Regental support.
Fleming and his wife (who had flown in from
Madison) met with six Regents, four representatives of
the various presidential advisory committees and their
respective spouses.
Fleming was grilled intensively in the Detroit hotel
by the Regents and representatives of the three pres-
idential advisory committees.
Fleming fielded tough questions for three hours Fri-
day night. While playing to no special audience Fleming
apparently had all the right answers. "Everyone was
terribly impressed," says one Regent.
ON SATURDAY MORNING the four advisory com-
mittee members, Gretchen Groth, Grad, Prof. Paul
McCracken of the Business School, Prof. Arthur East-
man of he English Department and alumnus Joseph
Hooper all indicated they favored Fleming.
(Meanwhile, back in Ann Arbor, the Wisconsin
Chancellor took his first full tour of the campus here,
accompanied by Mrs. Robert P. Briggs, wife of the chair-
man of the Regents presidential selection committee.)
After the advisory committee members left the De-
troit meeting the Regents discussed the matter and then
took up the question of making Fleming "A Harvard
Offer": If we made you an offer would you be interested?'
Since the Regents were aware that Fleming was
very seriously interested in the job here (he was stalling
Minnesota) they were essentially voting Saturday
whether or not Fleming would become the next Presi-
dent.
At that point only one other candidate was really
in the running-Heyns.

For a variety of reasons Heyns was unacceptable
to a majority of the Regents. (The Regents had report-
edly not been in touch with him since the middle of the
month.)
As vice-president for academic affairs here Heyns
had miffed sensitive administrators in the business
school, stirred controversy in the office of business and
finance with his handling of budgeting, and won a
scattering of enemies.
WHILE HEYNS WAS the top choice of the student
and faculty advisory committee only one Regent backed
him vocally (a second privately favored Heyns). How-
ever, the rest of the Regents were particularly cool
toward Heyns. Among other things the Regents felt it
would be better to bring in someone from the outside
with a clean slate.
Thus the Regents knew that if they didn't pursue
Fleming they would be forced to begin their search anew
and quite possibly end up with a second choice. The
Regents talked the matter over and agreed to make
Fleming a "Harvard offer."
Fleming promptly said he would take the job and the
Regents decided through phone conversations over the
weekend to have a meeting Tuesday to publicly decide
they wanted to make Fleming an offer.
The Regents kept a tight rein on their decision-
on Monday only two press-release preparing University
Relations officials and President Hatcher were told that
Fleming was the new man.
To their chagrin the vice-presidents were kept in
suspense. One even found himself contacting reporters to
get the scoop.
Tuesday morning the Regents voted to offer Fleming
the job. Regents Briggs, who has worked tirelessly on
the selection, left the room to make the last of hundreds
of Presidential phone calls.
After several minutes of ad-libbing by Regent Cudlip
on the Honors Convocation Briggs returned with the
news that Fleming accepted.
Moment later the news service handed out mimeo-
graphed copies of Fleming's 300 word statement of ac-
ceptance which was released simultaneously in Wis
consin.
* LOOKING UNDERNEATH the press release gloss,
it appears-that the Regents picked Fleming for a host
of right reasons:
" Formost they wanted a-man with proven ability
to work with faculty and students. Fleming had per-
formed well in Wisconsin and was fully supported by

faculty and student advisory groups here.
(The Regents made it clear that they would not
pick a president opposed by the faculty and student
advisory committees.)
While the faculty and student advisors favored
Heyns, they were glowingly optimistic about Fleming.
"He's just like Heyns except that he doesn't have any
enemies," said one advisor who backed Heyns but has
no regrets about Fleming.
The Regents thought that a lack of initial opposition
would be an asset to a new president. "It's usually best
to clean a place out with a new broom," says one Regent.
* They also wanted a man eager to plunge into the
perpetual controversy here. "He recognizes that em-
barassment comes with the job. He's not afraid of con-
flict, he realizes diversity is what makes a university
great," said a Regent.
" A host of smaller, yet relevant considerations also
crystallized in the appointment of Fleming. Obviously
he timing was significant. Fleming had been contacted
originally by he Michigan Regents long before his initial
discussions with the Minnesota Regents. Thus he felt
obligated to wait out the Michigan decision before taking
the Minnesota offer.
Fleming's wife (a far more imporant factor than many
may realize or admit) is considered perfect for her vast
social duties. And at 50, Fleming is "exactly the right
age for the post," explains a Regent.
STILL, IF FLEMING was the right choice a host
of questions remain. The former law school professor
has been a college administrator at Wisconsin for only
three years.
As he candidly confessed Friday night he has not
yet developed and "overall perspective" of exactly where
the University is going.
Explains one member of the student advisory com-
mittee: "He hasn't really formulated a specific overall
philosophy of the university. He's been doing a lot of
reading and thinking about the matter recently."
Still, Fleming will be actively searching for new
ways of making sense out of the university. The result
could be a badly-needed shake-up here.
"He'll want to take a close look at many of the
sacred cows here. and many may fall by the wayside,"
predicts one top official.
In short, Fleming may turn his handicap into an
asset. Because his philosophy of the university is open
not ossified, he may infuse this school with a badly-
needed dose of re-examination.

A4

I

4

Ghetto Immorality Play

LESLIE BIEDERMAN, 24, the Detroit
school teacher who was barred from
the classroom because he encouraged his
students to produce a play about life in
the big city ghettos, is one of the few
individuals who has a real grasp of the
meaning of education.
Obviously 'the school officials don't.
Despite the fact that Jefferson Junior
High School is itself located in the heart
of Detroit's inner city at the Lodge Free-
way and Selden, regional school super-
intendent Arnold Meier thought that the
"numerous instances of profanity and
references to sex" in the play "A Thou-
sand Leaders Among You"-written by a
Wayne State instructor-were "objection-
able."
His reasoning sounds hollow against
the background of protests of parents of
the Jefferson students who said that the
realistic portrayal was certainly not of-
fensive. This does not speak well for
Meier's educational philosophy which
would advocate escape from, rather than
confrontation with, reality.
THE CASTING of a 15-year-old girl as a
prostitute in the play-one of its "ob-
jeactionable" facets-comes as no great
shock to children raised in an environ-,
ment like the Jefferson inner city area.
Described in the newspapers as a "de-
teriorated area," the neighborhood is the
backdrop of rapes and back alley fights,
and is frequented by alcoholics and street

walkers. At Franklin Elementary School,
in a similar area near Briggs Stadium,
the principal is concerned with prostitu-
tion among the students themselves. As
Mrs. Mildred Matthews, Baptist youth di-
rector, said, the play is 'no worse than
what the children see personally and in
the movies all the time."
According to Biederman, the students
in his civics class were familiar with
ghetto living and urban renewal and were
interested in learning how to cope with
it. He had the sense to realize that by
allowing the student to discuss the play
they would be analyzing not only a piece
of literature, but their own lives as well.
STUDENTS,FORCED to submit to the
edicts of blundering "educators" who
strive to protect them from the harshness
of life, will grow to mistrust those who
speak of the good life that can't be had
in the ghetto.
If Biederman's suspension is not revok-
ed, the cause of education will have re-
ceived a setback. But because he is one
of the few who has dared to challenge
the system, he doesn't seem in a position
to win the favor of the school board. As
Mrs. Matthews explained so clearly, "They
are out to get him."
-ANNE BUESSER
Aid Art,
MORTON FELDMAN, one of America's
most distinguished young composers,
will perform and discuss his original
works today in a benefit for the Artistic
Grants Fund of the Dramatic Arts Cen-
ter. The concert will be given at 8:30
p.m. at the First Unitarian Church of
Ann Arbor, 1917 Washtenaw. General ad-
mission is $2, with special student price of
$1.
All proceeds from this affair will go to
the Grants Fund which provides support
for young filmmakers, artists and sculp-
tors.
-ANDREW LUGG

.4

Eyeball to Eyeball, wi th a Recession?

By PAUL W. McCRACKEN
Professor of Business Admin.
IS THE AMERICAN economy in
an eyeball-to-eyeball confron-
tation with another recession?
This question has been asked with
increasing frequency in recent
weeks-and with some reason.
The evidence that the boom
was faltering began to emerge
around the turn of the year. The
pace of the advance in production
and sales was decelerating as we
moved into 1967. Industrial. pro-
duction showed declines in Janu-
ary, after good though decreasing
gains through most of 1966, and
there was a sharp further reduc-
tion in February. And retail sales
slumped badly in February.
Much of this sales weakness,
unfortunately for Michigan, cen-
tered in autos. Indeed, auto sales
(including imports) sagged in Feb-
ruary to not over a 7% million an-
nual rate, down 8-9 per cent from
January. This was a shortfall of
about 25 per cent from the year-
ago pace, but that comparison is
made unduly horrendous by spe-
cial factors making sales abnor-
mally high early in 1966. With
the resumption of General Mo-
tors production, and slightly less
bilious treatment from the weath-
erman, auto sales seem to have
come up to roughly a 7% million
rate in March.
While employment and incomes.
have continued to perform well,
these are slow-moving indicators
whose viscosity makes them insen-
sitive to early changes in eco-
nomic canditions. Moreover, the

length of the w'ork week has de-
clined.
ARE THESE weaknesses mere-
ly an airpocket in the economy's
inevitably uneven pace of ad-
vance? Or is this advance, which
began in 1963, now in its latter
days? These have now become the
key questions.
What we are now seeing is quite
clearly a bona fide deterioration
of business conditions. For one
thing consumers as long as a
year ago began to show emergent
uneasiness. The Survey Research
Center's work here picked up a
discernible decline in consumer
sentiment early in 1966, and it be-
came more marked through the
year. And th4 Bureau of the Cen-
sus survey of buying plans show
a significant reduction in plans
to buy new cars and household
durables in the first half of 1967.d
The boom in business expendi-
tures for new facilities has also
found the wind going out of its
sails. The new survey of busi-
ness plans for outlays on new fa-
cilities was unexpectedly bearish,
and its results were undoubtedly
a major factor in the administra-
tion's precipitate recommendation
for a resumption of the investment
credit and accelerated deprecia-
tion. The survey made in Novem-
ber and released in December in-
dicated that these outlays would
rise to the horizon of the survey
(mid-1967). The survey whose re-
sults became available this month
shows outright declines during the
first half of 1967, with only a
sluggish and uncertain recovery
later in the year.
The most ominous development

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in the current economic scene is
the large build-up in inventories.
In the fourth quarter of 1966
business inventories were rising at
the rate of $17.6 billion per year.
Not over half that rate (perhaps
$7-8 billions is consistent with,
the on-going pace of the econo-
my. Early evidence suggests that
since the turn of the year the
rate of inventory accumulation
has dropped to perhaps a $10 bil-
lion rate, but this is stilltoo high.
Production schedules are, there-
fore, being cut back to moderate
this inventory build-up, and new
orders are falling.
THE SOURCE of the problem
is to be found in the go-stop course
of economic policy. After the well-
timed and well-executed tax re-
duction of 1964 (actually propos-
ed by President Kennedy E in Au
gust, 1962), the economy moved
into the zone of full employment
in the second half of 1955, with
unemployment at 4.0 per cent by
year end. Unfortunately both mon-
etary and fiscal policy at that
point took a perverse turn. They
should have become less expansive
as the economy eased into the full-
employment growth path. Instead
they went the other way.
The money supply, a useful cali-
bration of Federal Reserve or
monetary policy, accelerated from
an 8 per cent annual rate of in-
crease in the first half of 1965 to
a 10.6 per cent pace in the second
half. This was desirable only if
the economy should have been on
a 10-11 per cent per year growth
trend-obviously undesirable since
its capacity for further real growth
was not over 4-41/2 per cent an-
nually. And the budget took a
perverse . .6 billion swing to a
deficit in the second half of 1965.
Now there is nothing Mephist-
ophelian about deficits, but a large
budgetary swing to a deficit is
not in order when the economy
is on the verge of over-heating.
At the point where the economy
needed a mild sedation, in short,
it got a couple of pep pills.
Then entered the January, 1966
Budget Message with its large un-
derestimate of defense spending
for fiscal year 1967. (In the final
quarter of fiscal year 1967, these
outlays will actually be at the
rate of $10-12 billion per year
beyond that implied in the Janu-
ary, 1966 Budget Message.) This
made for a tax increase a year
ago that was also too small, and
the budget again shifted into a
deficit position in the second half
of 1966.
Thus the whole burden for re-
straining the accelerating economy
fell on monetary policy. The Fed-
eral Reserve tightened up sharply,

so severely that by October and
November there was outright mon-
etary contraction. Thus we shift-
ed from an excessively expansion-
ist policy in 1965 to an excessive-
ly restrictive policy by mid-1966.
The economy cannot adjust
smoothly to these sharp swings in
fiscal and monetary policy, as we
are once again finding.
FORTUNATELY monetary and
fiscal policies are now laying the
basis for a renewed expansion.
Federal Reserve policy, after near-
ly locking its brakes, resumed an
orderly rate of expansion in De-
cember. Easier credit and mone-
tary policies in key European
countries (Germany, Britain, Bel-
gium, the Netherlands) are now
also giving us more scope for
monetary expansion here - with-
out courting the risk of an out-
flow of funds that would further
disequilibrate our balance of pay-
ments. And the actual rate of
monetary expansion since Decem-
ber has been in the 10 per cent
per year zone.
The federal budget will also be
highly expansionist, more than the
figures might seem to imply.
While the President's Budget Mes-
sage projected a sharp reduction
in the cash deficit next year (FY
1968), several adjustments must
be made to get at the "economic
deficit." Sales of government fi-
nancial assets, though treated as
a "negative expenditure" that re-
duces the stated deficit, are real-
ly a means of financing. Seignior-
age profits (coinage profits) are
treated as a "receipt," but they
withdraw no purchasing power as
do taxes.

The 6 per cent surtax is also
excluded, and the restoration of
accelerated depreciation and the
investment credit is assumed for
FY 1968. On this basis the federal
budget is moving to an "economic"
deficit of at least $16 billion, and
it could well be even somewhat
larger. This is a potent fiscal stim-
ulant.
WE THUS shall probably wob-
ble through the next few months
with a minor recedence in produc-
tion and sales. The present de-
terioration-Is sufficiently well-de-
fined so that we must expect a
few more months of bad news
about business conditions. We
should, however, emerge in the
latter part of the year with a
renewed expansion. If so the fore-
cast of the Council of Economic
Advisers (ably chaired by Michi-
gan's Gardner Ackley) of a rise in
GNP from $740 billion in 1966 to
$787 billion in 1967 may yet turn
out to be only slightly high.
The author is Edmund Ezra
Day professor of business admin-
istration at the University. Re-
cently appointed to a special
presidential commission to re-
view the federal budget, Prof.
McCracken testified before the
Joint Economic Committee of
Congress in February. He serv-
ed as a member of President Ei-
senhower's Council of Economic
Advisers from 1956 to 1959, and
has written, numerous journal
articles, and several books. His
latest, "Consumer Installment
Credit and Public Policy," was
published in 1965.

A

vi s
{I

Annual Rate of Increase in Production and Sales

Period
1966 - First quarter
Second quarter
Third quarter
Fourth quarter

Indust.
Production
13.2%
7.5
3.1
3.1

Retail
Sales
12.1%
-2.2
5.0
-5.7
16.0
-21.0

1967 - January -7.8
February (1) -17.2
Source: Federal Reserve Bank of St. Louis.
(1) Preliminary

3

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The Federal Budget Surplus and the Annual
Rate of Increase in the Money Supply
Increase in
Period Budget Surplus (1) Money Supply
1965- First half $ 4.5 8.0%
Second half -1.4 10.6
1966 - First half 3.0 7.4
Third quarter -0.5 3.4
Fourth quarter -3.5 0.9
1967 - First quarter (2 -6.0 11.0
Source: Business Cycle Developments, February, 1967, pp. 31-2.
Time deposits are included in the money supply. The
budget is on a national income basis.
(1) Seasonally adjusted annual rate, natioial income basis
(preliminary estimate)
(2) My own estimates.

4

Plant and Equipment Expenditures
(Seasonally Adjusted Annual Rate in Billions)

'I

Year - Quarter
1966 - Third
Fourth
1967 - First

Survey
11/65
$61.25
62.60
63.45

Conducted In:
2/67
$61.25
62.80
62.60
62.25
63.25(1)
64.00(1)

Federal Cash Surplus (in Billions)

Second 64.05
Third -
Fourth
Source: S.E.C. & Department of Commerce.
(1) Quarterly phasing of second-half estimate.


Fiscal Year Stated Deficit
1966 $ -3.3
1967 -6.2
1968 -4.3
Source: Basic data from Budget Message,

"Economic Deficit"
$ -7.0
-11.2
-16.0
January 1967.

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