Economist attacks
The Michigan Daily-Friday, November 11, 1977-Page 5
ENDORSEMENT IMMINENT:
Carter hails jobs acket
high milita
By DAN OBERDORFER
The American economy limps
inefficiently along because ' of "the
country's, financial commitment to
the military, well-known economist
Seymour Melman told roughly 100
listeners at yesterday's Viewpoint
lecture.
"The American military complex
is the largest such organization in the
world," the Columbia University
Prof. of Idustrial Engineering said.
"Qver five million people are de-
pendent on it for their livelihood."
The military's budget is not direct-
ed toward employing these people to
increase military efficiency, Melman
contended. Rather, the money is
allocated on the basis of "regional
economic reasons," he said.
MELMAN SAID the military acts
like a system within a system -
playing on the fears of politicians
who see large military contracts as
extra employment for their regions.
"The military economy maximizes
costs and maximizes subsidies to off-
set that cost," he said. "Cost is not a
constraint to design. The product is
sold before it is produced."
As a consequence of the military's
disregard for the laws that determine
production in the civilian economy -
relative cost efficiencies and supply
ry funding
and demand - a large number of
skilled administrators and engineers
are unqualified for civilian positions,
Melman contended.
,(continued from Page 1)
With blacks and others urging en-
dorsement of the measure, the ad-
ministration is near the end of efforts
to negotiate a compromise. Carter
said the negotiations have inserted
"a strong anti-inflation commitment
in addition to the anti-unemployment
commitment." He also said the bill
has been stripped of "direct authori-
zations for programs that have been
very costly."
THE COMPROMISE also would
require the President to report to
Congress periodically on efforts to
reach the four per cent objective.
Sen. Harrison Williams Jr. (D-
N.J.), chairman of the Senate Hu-
man Resources Committee which
will consider the bill next year, said
"the level of cooperation between the
President and the sponsors of the
original bill is a major turning point
in the battle to restore the nation's
economic vitality.,,
During his half-hour encounter
with reporters, Carter also made
°these points:
" Fresh violence near the border
between Israel and Lebanon under-
scores the need for early convening
of a Geneva conference on Middle
East peace efforts because "the
whole thing is just sitting and
teetering on another outbreak of even
more major violence.''
" The principles of a national
health program, including health
insurance proposals, will be made
public early in 1978. Specifics of a tax
revision blueprint remain undecided.
Carter said he wants "another month
or so to assess the changes" in
economic prospects, and to review
tax-related aspects of energy and
Social Security legislation nearing
final congressional action.
" Reports of discord between the
President and Chairman Arthur
Burns of the Federal Reserve Board
'are completely erroneous."
Carter Said, "I don't think I have any
inclination to criticize the actions
that have been taken by Mr. Burns."
White House aides later said Carter
did not mean there have not been
policy disagreements between the
President and Burns. They said
Carter simply meant there was
nothing personal about the disagree-
ments.
" On the no-contest conviction of
former CIA Director Richard Helms,
accused of failing to testify fully
before a Senate committee, Carter
said, "It is not a badge of honor and a
public official does not have a right to
lie." A lawyer for Helms had said the
case was a badge of honor for a client
who purportedly rated his CIA
secrecy oath as taking precedence
over the requirements of the Senate
rnm m itteP
Melman
ANY ATTEMPTED transfer from
a war economy to a civilian one, will
not be easy, he said. When large
weapons plants halt production they
leave a "vast industrial wasteland".
Melman feels the turnover can be
eased along with a modicum of
planning - applauding especially a
Senate bill which attacks this prob-
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