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February 28, 1963 - Image 3

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The Michigan Daily, 1963-02-28

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Fusfeld Cites Economic Trend I

To AidAny Red Nation
In Fighting Aggression

U.S. Proposes Fleet

Talk Terms


with Nuclear Weapons 'Good Policy'

PARIS (A)-The United States opened a sales pitch to its North
Atlantic allies yesterday on the idea of a fleet armed with nuclear
The fleet would be operated by a special group set up under the
Atlantic alliance. The idea may be difficult to sell, chiefly because
the United States insists on controlling the firing button.
United States Ambassadors Livingston Merchant and Thomas
Vinletter went before a secret session of the North Atlantic Treaty


By The Associated Press
ST. PAUL-The lead of Karl
Rolvaag, the Democratic candi-
date, rose to 43 yesterday on fresh
rulings from the three-judge re-
count hearing evidence on, disput-
ed ballots in the Minnesota gov-
ernor election.
* * *
Chafee yesterday signed into law a
controversial bill which will grant
limited state aid to pupils of non-
public schools through the loan-
ing of textbooks.
WASHINGTON - S p i r a li n g
prices for fresh fruits and vege-
tables sent living costs up two-
tenths of one per cent last month,
NEW YORK-The New York
Stock Exchange moved unevenly
most of yesterday, then- sank to
a sharp loss in the final hour. The
Dow-Jones Averages showed 30 in-
dustrials down 4.48, 20 rails down
0.34 and 15 utilities down 0.67.

O0rganization Permanent Council
to present American thinking on
the issue.
Special Representative
Merchant is President John F.
Kennedy's special representative
for the nuclear force and Finlet-
ter is the permanent United States
delegate on the NATO Council.
United States sources said Mer-
chant and Finletter discussed the
allied nuclear force idea from its
origins in December, 1960, to the
present, and solicited views from
allied governments.
No further action was reported
taken at the meeting.
Continental Thought
In his contracts with allied of-
ficials, Merchant is trying to crys-
tallize European thinking on a
multinational force - an idea
which has so far failed to take
hold despite frequent United States
efforts to bring it to realization.
The United States, which holds
the great bulk of NATO's nuclear
power, has recognized the desire
of certain allied nations-notably
France and West Germany-to
have a nuclear role of their own.
The United States hopes to ar-1
rive at some arrangement which'
will spread nuclear responsibility
through the alliance.

Warns 'Imperialists'
Against Atomic War
MOSCOW ( P)-Soviet Premier
Nikita S. Khrushchev declared
yesterday that if Cuba, Red China,
or any other Communist nation is
attacked, "the Soviet Union willi
come to the assistance of its
friends and strike a devastating
blow at the aggressors."
Khrushchev's speech in the
Kremlin came against a back-
ground of renewed Red Chinese
attacks on his policy and a Peking
demand for an apology for the
Soviet attitude in their ideological
Khrushchev defended his peace-
ful coexistence policy, which has
been criticized by Red China, as
"the only sensible policy." He add-
People's Choice
"If, however, the imperialists
violate the right of the peoples to
choose the socio-political system
they want, if they try to impose
their will on the peoples, this will
lead to a world thermonuclear war.
"This is why we resolutely warn
imperialists: if an attack is made
on Cuba or on the People's Re-
public of China which is being
threatened from Formosa, if an
attack is made on the Korean!
Democratic People's Republic, the
Democratic Republic of Viet Nam
or the German Democratic Repub-
lic, or indeed any Socialist coun-
try, the Soviet Union will come to
the assistance of its friends and
strike asdevastating blow at the
"The imperialists must know
that if they unleash a new atomic
war, they will themselves be burn-
ed in the fires of that war."
Red Echo
The address echoed the words
of Defense Minister Rodion Y.
Malinovsky last Friday, who
threatened the United States with
atomic war if Cuba should be at-
tacked. But Khrushchev expanded
the warning to include the other
Communist nations, specifically
mentioning Red China, North Ko-
rea, North Viet Nam and East Ger-
Khrushchev did not specifically
mention Red China's latest blast
in the quarrel, a 7000-word broad-
cast editorial of the official
people's daily accusing the Krem-
lin of double dealing.
Khrushchev, running for a seat
-and assured of it-in the Sun-
day elections to the Russian Fed-
eration's Supreme Soviet (Parlia-
ment), discoursed at length on
both foreign and domestic affairs.

... new proposal

Russia Set
To Renew
Berlin Talks
Department announced yesterday '
the United States and Russia will.
soon resume their lengthy and so
' far unsuccessful talks aiming for;
a Berlin settlement.
Press officer Lincoln White said
the United States ambassador to
Moscow, Foy Kohler, brought a
Soviet proposal to revive the dis-
cussions with him when he re-
turned to Washington at the end
of January. Kohler delivered the
United States acceptance in Mos-
cow last Monday.
Where the talks will be held and
who will represent the two sides
has not been decided, White said.
The United States-Russia dia-
logue on how to solve the Berlin-
Germany issue began after the
June 1961 meeting between Presi-
dent John F. Kennedy and Soviet
Premier Nikita S. Khrushchev.
Talkshave been held since in
Moscow, New York and Washing-
ton. They have been in abeyance
since last October's Cuban missile
White said that the United
States consulted its allies and got
"no objections to resumption of
the talks." He reaffirmed the po-
sition that the discussions are not
formal negotiations but explora-
tory sessions to see whether a
basis for settlement can be found.
Presumably Britain, France,
West Germany and other allies
would be brought into the picture
before any agreement is reached.
So far Kennedy, Secretary of
State Dean Rusk and other Amer-
icans who have participated have
found no Soviet offer acceptable
as a basis for a settlement.
Bosch Takes
President Oath
Bosch took office yesterday as the
i Dominicans' first constitutionally
elected president since 1924.

Inadequacy of production is the
najor problem of the American
economy, Prof. Daniel R. Fusfeld
of the economics department not-
ed recently.
In a Voice-sponsored talk on
the American economy, he ex-
plained that since 1953, the growth
of the economy has been sluggish.
The gross national product is
$560-570 billion, 50 $billion below
a full employment level. Unem-
ployment is from five to six per
cent of the population, and yet
we are now in a peak business
"The 1945-'53 period showed the
most rapid growth in the entire
United States history. But during
the past decade, the increase in
our living standard has been slow-
er than for any other 10 year
period," Prof. Fusfeld said.
On the Rise
Taken as an average, the Ameri-
can living standard has risen from
one and one-half to two per cent
per year. This includes depres-
sions, recessions and boom years.
But since 1953 the standard aver-'
age has risen only one-half of
one per cent annually, and has
now become stable at that figure.
"There has been no increase in
living standards for the low-in-
come bracket. This leads to a
great deal of tension in our suc-
cess-oriented society," he continu-
The average American has to
find some reason why he isn't
"getting ahead." It has become
much harder for high school and
college graduates to break into
a society where opportunities are
not naturally available from
growth and expansion.
Erupting Tensions
This tension may erupt in ra-
cial, social and political problems.
"The young people of the cities
are this generation's dispossessed."
There are four views of how
best to increase our economic
growth rate. The first are the
right-wing "fiscal fundamsntal-
ists." They believe that the prob-
lem is a moral and ethical one
and that there are good and evil

all blue-collar workers are good.
In both the above two views, thec
advocates of each think that ifl
they find solutions and apply them1
uniformly, the problems will dis-f
appear. They just don't examinef
the problem fully," he declared.1
Ike's GOP
The third view is tyo fied by the
Eisenhower Republicans, also1
known as the "liberal conserva-
tives." They see economic growth
as a problem which can be solved
by stimulating private enterprisej
and investment, providing tax :n-
centives, halting inflation ands
stabilizing prices.
The Administration Democrats
exemplify the last view. "They are
the 'conservative liberals" who
want to go a little further thana
the Eisenhower group in that they
are willing to take vigorous ac-
tion," Prof. Fusfeld noted.
This last body works essentially
in the same way, for example by
stablizing prices and making tax
concessions. But they will use gov-
ernment deficits as a catalyst for
economic growth. One major dif-
ference between the two groups is
that the conservative liberals will
introduce social welfare programs
which the other would never
dream of doing.
No Dent
"We must inquire if President
John F. Kennedy's policy of deficit
spending is really going to make
a dent in our unused resources
and manpower. The answer is no,"
he replied.
Although it would be worse if
we didn't get a deficit, this will
not move the economy closer to
its potential level of )utput. Every-
one, he continued, is afraid. of in-
flation. Eventually we must have
a national wage and price policy
and mechanisms for making it
effective if we want to increase
the economic level.
Looking at the economic prob-
lems on a world basis, he pre-
dicted that the major difficulty
of the future will be that of auto-
mation, population growth and
unequal distribution of wealth be-
tween rich and poor nations.

"The world population will
double within the next 25-30 years.
However the growth in agricultural
productivity in advanced agrarian
areas (like the Midwest) has been
faster than the most rapid popu-
lation increase," he commented.
"The populationvgrowth and
problem of natural resources for
supplies will result in an advance
in technology that will make our
present technology seem primi-
tive," Prof. Fusfeld said.
The great problem will be that
of social division. As a more ad-
vanced technology is developed,
more scientists and intelligent
technicians will be required. Thus
a widening gap will appear be-
tween the trained group and the
average people in semiskilled and
unskilled jobs.
The other major problem of the
future is that the present division
between rich and poor countries
will be able to usurp the produc-
tion of the poor countries, he con-


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