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September 25, 1977 - Image 4

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Michigan Daily, 1977-09-25

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y, September 25, 1977-The Michigan Daily

Eighty-Eight Years of Editorial Freedom
420 Maynard St., Ann Arbor, MI 48109
Vol. LXXXVIII, No. 16 News Phone: 764-0552
Edited and managed by students at the University of Michigan
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Bert bows out
T LOOKED for a day or two as
if Bert Lance might pull
through the Carter Ad-
ministration's first crisis with his
job. A couple of senators said
they thought he had weathered
the storm and would be able to
stay on. Then, on Wednesday,
President Carter announced that
he would hold a press conference
that afternoon. His closest friend
had decided to go home to
It was virtually certain that the
choice was not Lance's alone,
though the condition of his per-
sonal finances seemed to demand
his full-time attention. Carter had
obviously decided that the heat
had become too great, that he
was. losing prestige on Capitol
Hill, and that his staunch defense
bf Lance earlier was beginning to
look ill-conceived.
From all quarters came the
great question: How much has
the Lance affair hurt Carter?
First, one suspects that the mere
glut of speculation on the damage
itself contributed to the damage.
Second, there was little one could
do but wait and see. Carter's
popularity with the voters is still
reasonably high, and until that
stock falls, he is likely to main-
tain a presidentially heavy hand
in Congress.
But Lance affair produced
some things which need little
time for evaluation. The most
important, perhaps, was that
Carter had ignored or at least
isolated himself from sound ad-
vice from powerful congressional
leaders such as Senate Majority
Leader Robert Byrd. He trusted
his "Georgia Mafia" to a
dangerous point: on their advice,
old friend Bert was kept on long
after he should have been booted.
White House isolation was sup-
posed to have gone out with
another presidency. It showed up
last week in Washington like an
unwelcome in-law.
Az lucks out
THE SCRIPT could have been
used in a disaster film:
Thriving midwestern city, intel-
lectual seat of the state, makes
daring investment. The invest-
ment looks good, then it starts to
pale. Within weeks the venture
sours and mayor warns that the

city, which stands to lose $1
million, is "going to hell in. a
If you stay past the intermis-
sion, there's a happy ending :in
store. City gets-iffy investment
back, brokerage firm fires ac-
count executive who handled the
transactions, and state officials
say they will clean up the debris.
The investment, first made
with the honest intention of
making clean bucks for the city,
may have been illegal. The
suspect dealings with brokerage
firm Merrill, Lynch, Pierce, Fen-
ner and Smith were arbitrage
transactions. In arbitrage the
city borrows a U.S. treasury note
from a brokerage firm, then sells
the note for cash hoping for imore
money then it paid for it in the
first place.
But under state law each m'u-
nicipality is required to have ap-
proval from the Municipal Fi-
nance Commission (MFC) before
borrowing money. It is unlikely
that the brokerage firm, although
it supplied false information to
city officials, will take any slaps
from MFC and state treasury de-
partment officials who are in-
vestigating the transactions. The
firm is -out of the state's legal
reach. The city, however, may
land a spanking.
But at this point, that's okay
with city officials. The night-
mare is over and the city's money
is safely back in its Ann Arbor
Band and Trust account..
"It's in their (the states' hands
now," said a relieved city attor-
ney Bruce Laidlaw."
Editorial positions represent
a consensus of
The Daily Editorial Staff
Editorials and cartoons that appear
on' the right side of the Editorial
Page are the opinion of the author,
or artist, and not necessarily the
opinion of the paper.
Letters should be typed and limited
to 400 words. The Daily reserves the
right to edit letters for length and
..g..........8 8289

ki -,

An innocent abroad

the world this year. Southern
Africa and the Middle East, right? As
war grumbles just over the horizon in
4hese two lands, President Carter is
planning a globaltour. Which hot spots
has he chosen? Oh, Brazil, Belgium,
How strange that the announcement
of a grand presidential trip comes just
as Washington is reeling away from its
hit-and-run with the administration
over Bert Lance. And how particularly
odd that the President has chosen
some of the blandest political.
situations availabler to visit as chief
spokesman for the west.
Near the end of November,sCarter
will visit Venezuela, Bra'zil, Nigeria,
Iran, India, Paris, Poland, and finally
Belgium. Much has been made of the
stop in Nigeria, the first black coun-
try to be visited by an American
President since FDR went to Liberia in
1943. Never mind that the
U.S.-Nigeria relations are pretty
good, and that the parts of Africa that
cry for presidential attention are half a
continent away. President Carter will
have his picture taken with black
leaders, and that seems good enough
for the White House.

Why has Carter chosen such an
itinerary? Venezuela and Iran are
good for oil, New Delhi is good to keep
India's eyes away from the Kremlin,
and Poland is good for all .the Polish-
American voters back home.
Where is the substance of inter-
national policy& What philosophy of
diplomacy suffuses this mish-mash of
countries? Where is the courage to
take on a foreign policy challenge?
Too harsh? Perhaps. Zbigniew Br-
zezinski, Carter's national security
advisor, called the trip "an expression
of the President's stated commitment
to the promotion of constructive
change, world-wide, and of America's
engagement in that effort."
Now, there's a hot issue-construc-
tive change, and America's
engagement in it.
What is becoming grindingly obvious
as the months of Carter's term wear on
is that devotion to political symbols is
apparently to be his everlasting
trademark. We were willing to wait as
he toyed with television phone-ins and
fireside chats. But the time has come
for thought and action. These world-
wide sprees are a deception and a waste
of time.

Carter's employment plan:
Decrease job expectations

James King, 41, of San Francisco, used to
be a maintenance man, bringing home almost
$4 an hour. He was laid off last September,
and has been looking for work ever since.
He'd like another job in maintenance that
pays as well as his oldjob, but now he's faced
with accepting any job paying at least the
minimum wage, or losing his unemployment
King and hundreds of other jobless
Americans are being forced to take a step
down the economic ladder under new
eligibility requirements for Federal Sup-
plemental Employment Benefits (FSB), the
program that extends state-financed bene-
fits to cover a year or more.
BEHIND THE new regulations is the belief
.of many Washington economists that the
unemployment system was not designed for
the long-term unemployed like King. For
people out of work for nine months or a year,
"the likelihood of their returning to their
previous employment is not great," explains
Pierce Quinlan, whose Office of Comprehen-
sive Employment Development runs many of
the federal public service job programs.
"The rationale underlying the whole con-
cept is that it's better to have people em-
ployed than unemployed," says Roger Rossi,
research chief for the Unemployment In-
surance Service in Washington. And, the
argument continues, unemployment paymen-
ts perpetuate unemployment by subsidizing
people to look for jobs that don't exist.
The traditional role of unemployment in-
surance has been to enable workers to survive
while looking for jobs like the ones they held
before. The new attitude in Washington,
however, will force many people to take a
step down on the job ladder after 39 weeks in-
stead of continuing to try for work at the same
socio-economic level.
IN PRACTICE, this means lower pay for
FSB recipients-mainly the young, the old,

at least a paycheck-had as its corollary a
lowered sense of private responsibility to
work. These sentiments are not confined to
blacks, but they have been especially harmful
to blacks.. .," says Prof. Herbert Stein, for-
mer chairman of the Council of Economic
MANY RECIPIENTS believe the new
regulations unfairly force them to give up any
chance at a decent job. James King says he's
willing to work for $3 or $3.50 an hour, but "if
it comes down around $2.50 or $2 I'll feel bad."
And since they must continually be looking
for work, recipients can't go to school to be
trained for another good job.
"It's a legal trap," complains a 28-year-old
San Francisco father of two, who has been out
of work for 10 months. He made $5.69 an hour
as a factory machine operator, but the new
policy will soon require him to settle for a
drastic cut in pay.
The FSB program first expanded the
unemployment compensation system as a
reaction to the 1974-75 recession. Since unem-
ployment figures have been declining again,
benefits have been cut.
On May 1, the maximum number of weeks
of benefits a person can collect was reduced
from 65 to 52. The May reduction immediately
cut about 100,000 people off umemployment
In each state, as employment rises above a
certain level, supplemental benefits from the
federal government are no longer given. And
the whole supplemental benefits program will
expire in February unless Congress renews it,
which is not expected to happen.
WHEN THE NEXT recession comes, the
federal supplemental benefits program will
probably not be revived, if the views of
current theorists prevail. "Almost everyone
knowledgeable in the area agrees that 65
weeks of benefits in terms of an insurance
program financed by employer contributions

THE BELIEF that any work, even lo
paying menial work, is preferable to gove
nment-supported job hunting is consiste
with the Carter Administration's welfar
program, which emphasizes temporar
public service jobs. Such jobs could take th
place of long-term unemployment compe
sation programs.
But they may turn out to be no bette
solution to the problem of hard-core une
ployment among unskilled workers than i
surance has been. When the governmen
jobs end, workers will be in the sam
predicament without additional training: n
job, no new skills and no demand for the skill
they have.
Nevertheless, the goal of requiring une
ployed people to take low-pay jobs takes o
almost religious overtones in the words
some government experts: "The success.*tha
the nation can achieve in the employmen
area will depend, in considerable measure, o
its ability to strengthen its commitment to th
work ethic," reports the National Com
mission for Manpower Policy.
The effect of the latest FSB regulations or
people like James King gives some indicatior
of what to expect when the program finall
disappears. No one knows for sure if FS
recipients are actually going out and gettin
jobs as a result of the changes.
California statistics indicate that the effec
may be significant, however. Between earl
May, after the program was trimmed to 5
weeks, and the end of July, the number o
FSB recipients dropped 26 per cent, while th
number of regular recipients declined onl
three per cent.
Paul Rosenstiel is a member of the Urban Tas
Force of the University of California-Berkeley'
Third Century American Project.

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