I
Eighty-one years of editorial freedom
Edited and managed by students at the University of Michigan
Vietnam: Dollar mightier than bomb
420 Maynard St., Ann Arbor, Mich.
News Phone: 764-0552
Editorials printed in The Michigan Daily express the individual opinions of staff writers
ur the editors. This must be noted in all reprints.
FRIDAY, FEBRUARY 18, 1972
NIGHT EDITOR: SARA FITZGERALD
Rejecting the income tax
TwCO YEARS AGO, Ann Arbor resi-
dents voted down a personal in-
come tax for the city. On Monday,
they should stage a repeat perform-
ance.
The income tax proposal is only up
for an advisory vote Monday, but it is
generally understood that a "no" vote
would pretty much kill. the issue, at
least for this year.
And the issue should be killed. The
flat rate personal income tax should
be rejected and the present property
tax structure retained-at least un-
til the. state passes a law allowing cities
to institute graduated income taxes.
Although in theory income taxes are
slightly less regressive than property
taxes, the Ann Arbor situation is suph
that an income tax would be beie-
ficial, to industry at the expense of
low income residents and commuters
into the city.
It is also very doubtful that the pro-
posed tax would be adequate to deal
with what the Democrats call the, city's
"severe financial crisis."
The arguments leading up to Mon-
day's vote have been hard-fought and
bitter, with Mayor Robert Harris'
Democratic forces leading the fight for
the tax against opposition from both
sides.
On the right, the Republicans say
the city's funds have been squandered
by the Harris administration; and on
the left, the Human Rights Party also
disagrees with Harris' fiscal policies
and heavily criticizes the income tax
structure as being a burden on lower
income families.
IHE DEMOCRATS, joined by most of
the city's chief administrators,
claim that the city is in a severe fi-
nancial crisis, citing a $14 million gap
between revenues and expenditures for
the year, and a projected $2 million
gap for next year.
Add to that this year's anticipated
$400,000 deficit, as predicted by City
Administrator Guy Larcom, and the
Democrats are pushing the panic but-
ton.
Concentrating on what he calls the
"inadequate" funds for police and fire
departments, Harris grieves for the
lost $1 million in University police-fire
funds, and speaks of spiraling crime
rates in Ann Arbor.
He cites numerous projects that he
feels should be instituted in the city,
from environment programs to anti-
discrimination plans, and explains that
progressive programs cannot possibly
be initiated on the present property
tax millage which is at its 14.85 mill
legal limit and cannot be raised with-
out a city charter amendment.
He may be right on that. But what
he fails to add is that even with a one
per cent income tax, the city will be
without sufficient revenues to pro-
vide for those programs.
According to the city charter, if an
income tax is enacted, it will auto-
matically be accompanied by a 7.5 mill
drop in the property tax.
THE 7.5 mill cut, figures vary
al to just how much additional
money would come to under the per-
sonal income tax structure, with some
estimates as low as $350,000 after sub-
tracting the $130,000 costs of collect-
ing the new tax.
Harris admits that there would prob-
ably be a push to reinstitute some of
the property tax, and that all 7.5 mills
would probably be back in effect with-
in four to five years.
Meanwhile, as property taxes slow-
ly slide back up, the income tax itself
may be raised. Although by State law
the legal rate is presently set at one
per cent for residents and % per cent
for commuters, there is a bill in the
Legislature which would allow cities to
set a flat rate tax between one and
two per cent.
HOWEVER, the most compelling ar-
gument against the tax is that it
would create added burdens on lower-
income persons, both residents and
those commuting to jobs in town.
Without a d e q u a t e compensatory
taxation against industries, business in
Ann Arbor-which presently pays
heavy millage on its assessed property
-would get a $1 million windfall in
lowered taxes, and landlords would
pay approximately $700,000 less.
The slack would be taken up by
commuters-who do not pay taxes to
Ann Arbor now-and by those resi-
dents who would pay more under the
income tax than they pay in millage.
In addition, landlords are not ex-
pected to lower rents, nor are busi-
nesses expected to lower prices if the
tax is reinstated, so the burden would
be on the consumer.
Also, there are many commuters
coming from Ypsilanti and other Ann
Arbor lower-income suburbs to work
as janitors, maids and kitchen per-
sonnel in the hospitals and dorms; and
these people cannot afford to live in
Ann Arbor, which has one of the high-
est costs-of-living in the nation.
They should not be penalized with
a one-half per cent commuter income
tax for being too poor to live in this
city.
TO SUMMARIZE, if the income tax
were enacted, industry and land-
lords would make $2 million, commu-
ters and residents would lose $2 mil-
lion; and the city would gain scarcely
enough to make up for this year's de-
ficit, much less break even next year.
Unless the property tax was rein-
stated immediately, none of the city's
.financial problems would be solved by
the tax-and if the property tax were
reinstated along with a personal in-
come tax, the financial burden on mid-
dle and lower-income families would
be intolerable.
One day there will be a steeply
graduated income tax allowed in this
state, and at that time the regressive
property tax structure can and should
be thrown out.-
Until then, Ann Arbor citizens should
continue to reject any attempts to in-
stall a flat rate personal income tax,
and that rejection should be made
quite clear at the polls Monday.
-THE MICHIGAN DAILY
THE UNITED STATES has been
a Pacific power for more than, a
century, but with the end of World
War II and the collapse of the
British, French, and Japanese em-
pires, America quickly filled the.
power vacuum and overnight be-
came the dominant influence in
the Pacific Basin.
Since 1945 the United States has
invested billions of dollars in aid
and material and tens of thous-
ands of lives in three wars (t h e
Chinese civil war and the Korean
and Viet Nam interventions) in
order to maintain its presence on
the Asia mainland.
Our economic interest in Asia
is not a product of the cold war.
When it appeared that Japan
might drive the British out of the
Far East, a State Department
memorandum (Dec. 10, 1940) ex-
plained that: "our general diplo-
matic and strategic position would
be considerably weakened -- by
our loss of Chinese, Indian, and
South Seas markets (and our loss
of much of the Japanese market
for our goods, as Japan would be-
come more and more self -suffic-
ient) as well as by insurmount-
able restrictions upon our access
to the rubber, tin, jute, and other
vital materials of the Asian and
,Oceanic regions."
ably involved with the future of
Asia."
IT IS IN THIS context that we
must evaluate the continuing war
in Southeast Asia. Although the
factors shaping American foreign
policy are complex and involve
noneconomic considerations, stra-
tegic economic intere~sts are a
critical part of the mind-set that
formulates and chooses alterna-
tives.
The ultimate fate of Viet Nam
is by no means inconsequential to
the foreign policy planners and
the American business comunity
they serve.
The Stanford Research Institute,
a counterinsurgency think tank for
the Pentagon and the research
arm for multinational corporations
operating in the Pacific area, re-
minds its clients that the war in
Viet Nam "must be viewed as a
struggle likely to determine the
economic as well as the political
future of the whole region."a
The discredited cold war domino
theory still lives. When the stakes
are defined in these terms, no
American administration can per-
mit the "loss" of Viet Nam.
THE UNITED STATES :s de-
veloping a detailed and compre-
hensive strategy.for the economic
namization in political, economic,
social, and military terms" t h a t
would involve "a continuation and
acceleration of converting the pa-
cification program into the whole
administrative structure of t h e
Government of South Viet Nam
on a permanent ba:s . ."
Young estimated the cost to
American taxpayers as $5 to,$10
billion in the next decade. In
Viet Nam, Ambassador Ellsworth
Bunker is the principal booster for
American economic penetration.
He tells reluctant American busi-
nessmen that investments serve
stabilization while stabilization in
turn enhances investment.
A RECENT law passed by the
South Vietnamese Government au-
thorizes biding for ofshore oil con-
cessions.
American corporations are mov-
ing with alacrity to exploit what
Forbes believes might be an oil
region rivaling the Middle East.
Here is Ambassador Bunker's ad-
vice in action.
On May 28 of this year, the State
Department gave Columbia Uni-
versity a research contract to in-
vestigate how international organi-
zations can be associated with the
reconstruction of South Viet Nam.
The research will be carried out
by Arthur Smithies, whose links
to the CIA are well known.
In an earlier study, Smithies ar-
gues that while the war has been
destructive, judged as a whole it
has produced more positivQ than
negative results - highways and
port facilities have been built and
an army of bureaucrats and tech-
nicians trained. "At fantastic
cost," he observes, "the war has
fulfilled the necessary precondi-
tions for development."
The business community shares
this assessment. In the October,
1971 issue of Fortune, a portfolio
on "What the U.S. Is Leaving.
Behind in Viet Nam" reports that
South Viet Nam will have "an im-
pressive network of basic facili-
ties," a network one U.S. official
in Saigon described as "probably
the best infrastructure in all of
Southeast Asia."
Fortune concludes: "In the end,
perhaps the most important legacy
r
THAI DICTATOR Thanom Kittikacorn (left) operates a giant bull-
dozer made possible by American investment.
"We must look less to weapons than to social
and economic developement for the means to
bring under control political and military tur-
moil in the area."
":.V:;::{:":.{::V:.t'"a J.;?}: :"::}.44M:.:.A ? ? " ": :. .: }
In his report "U.S. Foreign Pol-
icy for the 1970's," delivered be-
fore Congress on Feb. 25, 1971,
President Nixon, standing in the
shadow of an historic Americans
fascination with Asia as a source
of raw materials and markets,
reiterated that "possessing vast
material resources . . . Asia and
the Pacific lie at the heart of the
task of creating a stable struc-
ture of world peace A Pacific
power ourselves, our security and
economic interests are inextric-
and political future of V i e t Nam.
The Council of Vietnamese
Studies, a part of the Southeast
Asia Development Advisory Group,
notorious for its counter-insur-
gency studies of Thailand, Aeld a
symposium in 1970 "to review
Viet Nam's own development pros-
pects in the circumstances of a
'postwar' environment."
Kenneth T. Young, who :noder-
ated the symposium and is chair-
man of the influential Council on
Foreign Relations, spoke of "a
concept of comprehensive V iet-
of U.S. investment in SouthViet
Nam will be the introduction of
modern industrial organization."
The key to this strength is the
class of trained business, military,
and technocratic personnel w h o
form "the most valuable part of
the new infrastructure being left
behind in Viet Nam by the U.S."
These spokesmen declare, ;n Ef-
fect, that, even if all else seems
lost, the years of bitter conflict
have at least laid the foundation
for an American corporate .Yvas-
ion of Indochina.
THE LESSON of the Tet offen-
sive and the militant antiwar
movement in the U.S. was that
the costs of a military victory in
Viet Nam were prohibitive. .Tet-
namization - Asian mercenaries
and the full exercise of American
technological genius to creale an
automated battlefield - is a shift
in means, not ends.
A pacified, pro-Western Pacific
Basin remains the objective. In-
stead of General Westmoreland
supervising search and destroy
missions, we. have Henry F o r d
leading his team of engineers and
technocrats on investment a . d
zontrol sorties.
"We must look less to weapons,"
admonished Robert. Barnett, form-
er U.S. Deputy Assistant ecretary
of State for East Asian Affairs,
"than to social and economic de-
velopment for the means to bring
under control political and mili-
tary turmoil in the area."-
This article, reprinted from
American Report, was com-
piled by Brain Mistrust, a ra-
dicalresearch action group
based in Ann Arbor. Brain
Mistrust is a frequent contri-
butor to this page.
*
4
Life insurance firms prey on students
WITH college costs running as
high as $4,000 or $5,000 a
year, students and their parents
can do without needless expenses.
And the last thing most college
students need is life insurance. As
we have said in "The Consumers
Union (CU) Report on Life Insur-
ance," the need for insurance
arises mainly with the birth of
children. The life of the father
or mother, or both, may have to
be insured if they are the bread-
winners on whom the children
will be dependent until they grow
up.
Unless a college student has
children, as a rule he should not
buy life insurance.
Many insurance companies,
however, don't agree with that
rule and certainly don't abide by
it. The life-insurance agent has
become a familiar figure on many
campuses and at other learning
institutions.
Charles W. Alexander, an agent
of Cotton States Life of Mem-
phis, writes in the trade journal
Life Insurance Selling: "The col-
lege insurance market is highly
competitive. Most college students
are contacted four to six times a
year by insurance agents."
One of CU's medical consult-
ants, the head of a fhospital train-
ing program for interns and resi-
dent physicians, has observed that
his students are approached by
insurance men five or six times
per week.
INSURANCE MEN approach
the premium - paying problems
by offering to financeethe first
annual premium, and frequently
the second, with a loan to be paid
off perhaps five years later. The
interest is payable over that per-
iod at an annual percentage rate
of 6 to 8 per cent or more. In
many plans the policyholder pays
interest on the interest, too.
The five-year promissory note
with a $10,000 College Master in-
surance policy sold by Fidelity
Union Life of Dallas in 1970 to a
21-year-old student had an an-
nual interest rate of 8.5per cent.
The compounded finance charge
on the premium loan of $151
came to $76.07.
A finance company owned by
Fidelity Union makes the loans
and sells the notes to the First
National Bank of Dallas.
According to the authoritative
"Best's Insurance Reports," Fi-
delity Union Life "has extensive-
ly developed the college senior.
and graduate market through its
specialized college division and
more than one-half of its insur-
ance in force is in this market."
IN ADDITION to signing a pro-
missorv note, the student nnliv-
comes, of course, as an add-on
to the premiums paid by the stu-
dent after the first year.
After five years, or whatever
the term of the loan, the balance
in the savings account will equal
the amount owed. At that junc-
ture the insurer takes possession
of the savings account.
Since repayment of the first
year's premium depends on the
student's paying future pre-
miums, the insurance company
and its lending partner take one
further precaution. Their pro-
missory note has built into it an
acceleration clause, a typical fea-
ture of retail installment con-
tracts.
If the student fails to pay any
premium on time, the lender can
demand immediate payment of
the entire loan. With the pro-
missory note, he can also readily'
obtain a court judgment order-
ing payment.
COMPANIES DOING a big
business in college policies often
set up special agents in college
towns. They like to recruit as
salesmen popular campus figures
such as fraternity leaders, recent-
ly graduated star athletes, former
coaches and even faculty mem-
bers and administrators.
Sometimes campus figures are
paid by agents for bird-dogging-
lining up prospects and intro-
ducing them to the agent. In
West Virginia, bird-dogging ap-
parently became so prevalent on
campuses that the state insur-
ance department now bans it un-
less the bird dog is himself a li-
censed insurance agent.
In his article in Life Insurance
Selling, Mr. Alexander of Cotton
'States Life took up various ob-
jections raised by student pros-
pects and explained how he over-
comes them. An objection often
' heard, as one might expect, is "I
want to talk it over with my
father." Mr. Alexander suggests
the following riposte:
Bill, probably the first thing
your dad bought for you when
you were a child was a piggy
bank, in order to get you in the
habit of saving money. All
you're going to do by talking to
your father is to ask him if you
may start a program to make
you do what he has been try-
ing to get you to do since you
were a child. That's kind of
silly, isn't it?
Or, if that doesn't work:
Bill, this program is designed
for you in a way that will enable
you to start it for yourself. You
will be putting your money in
the program, and you will cover
your wife and family with it.
This is why the decision should
be one that you make. Don't you
a'L Yrp9
have stepped beyond the bounds
of even Mr. Alexander's kind of
blarney. An insurance professor
at Michigan State University tells
of interviewing eight students who
had been sued by the same in-
surance company.
Three or four hadn't realized
they were buying insurance; they
thought they were signing a medi-
cal form. Others thought they
were getting the first year's in-
surance free.
So it's caveat emptor on cam-
pus, and another lesson in cynic-
ism for today's youth. To quote
again from that irate father's let-
ter to his son's insurer:
College kids these days are
idealistic and distrustful of the
Establishment, whatever that
is. God knows, I seem to be a
member of the Establishment
myself. Bethat as it may, you're
not helping any.
This article was prepared by
Consumers Unioi of the
United States, Inc.
4I
rf
Letters to The Daily
The presidential primary
Black housing
To The Daily:
UNIVERSITY students opposed
to the Afro-American units should
be made aware of the impression
their position makes on a not-very-
radical white alumni.
Although you "fully recognize
and understand the need for spec-
ially designated Afro-American
housing," you just don't want it
in your neighborhood. On t h e
eighth floor, a mile away i nOx-
ford housing, anywhere but where
it would devalue your safe ("coin-
paritively free from vandalism
. . . little security problem.. .")
corner of the world. Do you have
any idea how classic a racist posi-
tion this is?
While some of you would be
afraid to walk through that dark
unknown area, don't you see that
your black sister is walking a
practically all-white corridor with
a knot in her stomach?
Why is it that you can have
"person to person contact" with
her when she is separate from her
community, but fear her when she
is with other blacks?
If you can only deal with blacks
in a situation which you control,
in which you are in the majority,
not only are you living in an un-
real world, but you had better
search your soul to find out why
this is so.
In the world outside the Uni-
versity, blacks live together in
small communities surrounded by
larger communities of whites. Al-
though this is certainly lot a
Utopia, it is there and you will
have to deal with it or hide from
it when you graduate.
No one is going to scatter a few
Blacks in your path for you to
"associate with and form :riend-
ships with." You will either meet
blacks as they are or not at all.
Also, are you really so ignorant
of the development of r a c e re-
lations that you aren't aware (f
what Black Power means? Does it
really only draw up a vision of
some black man with bloodshot
eyes coming after you in an al-
ley? Don't you realize that Black
v, maa im Mt nMark nl rni nver
proud position.
Talking to your local co ridor
black in an effort to find o u t
what this foreign person is all
about, in an effort to be diberal,
to go further than your parents
dide- this does not display any
understanding of the Black Move-
ment at all.
I certainly hope that those who
are opposed to the Afro-American
unit are aware that they are tak-
ing a racist stand whether it is
the passive racist stand of not
wanting their privileged location
invaded by noisy blacks or the
active racist stand of fear to
walk among black people.
-Evelyn Bradley, '71
Feb. 17
'U' Club,
To The Daily:
"AN E M P T Y University
Club . . .", the caption on your
page one photograph (Feb. 15)
is a misrepresentation.
The Club has more than 2,000
members. At a typical lunch, we
serve over 200 persons.
The picture was taken when the
dining room was.set up for meal
service, prior to the arrival of
diners.
To imply that the Club is norm-
ally empty in order to illustrate
your article about control of "he
Michigan Union, the Club's land-
lord, is, at least, irresponsible
journalism.
--R. A. Greenfield
Managing Director
Feb. 16
Concert
To The Daily:
ON THE EVE of February 8th,
the Russians came to Ann Ar-
bor. This time they were members
of the Osipov Balalaika Orchestra.
And, as on previous occasions,
the ushers for the University Musi-
cal Society were cautioned to pro-
hibit entry of any person into the
auditorium until precisely 8:00
p.m., when the doors would of-
ficially open to the concert-goers.
In the wake of events that had
occurred in Detroit the previous
night, there was a natural fear of
possible disruption by members
of the Soviet Jewry Committee of
Hillel.
The disorder did occur, but was
not due to the actions of any
picketer, who indeed acted very
orderly and commendably. Rath-
er, the cause of the crisis arose
from a member of the musical So-
ciety's Board of Directors.
Having just explained to sev-
eral concert patrons that t h e y
would be denied entry until 8:00,
I was rather surprised when one
man and his wife side-stepped me
to get inside.
I find it rather ironic to com-
pare the sensible actions of those
members from Hillel with this dis-
gusting behavior ofuatboard me n-
ber, and I find it quite discomnforto-
ing to see him in the position of
school administrator.
-Paul A. Renard, '72
t'U
yESTERDAY'S State Senate approval of
a May 16 presidential primary in
Michigan assures a significant innova-
tion in the state's electoral machinery by
giving voters a greater voice in selection
of candidates for this country's highest
office.
The much debated primary provides
for both a statewide popular vote on the
candidates as well as the election of
precinct delegates, who' through a system
of county, district and state conventions,
'pick delegates to their parties' national
convention.
This means that a candidate who re-
ceives 20 per cent of the popular vote
will be eventually entitled to 20 per cent
of either Michigan's 132 Democratic or 48
Republican delegates.
MICHIGAN voters should realize, how-
ever, that the primary was not so
chosen by party leaders and paid no more
than lip-service to their supposed un-
committed status.
As a result, a popular candidate who
had neither strong party nor interest
group support had no chance whatsoever
of winning delegates.
So when liberal Democrats proposed
that the election of precinct delegates
for this year's conventions be held in
April, it was not surprising that some
Republicans also supported such a re-
form of the established system.
Political infighting was still the order
of the day. A split in the Democratic par-
ty occurred when House Speaker Wil-
liam Ryan tried to specify that a candi-
date must receive 15 per cent of the total
primary votes to win any delegates.
SUCH A MEASURE could easily have
prevented lesser known candidates,
I.u
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