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November 08, 1981 - Image 4

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The Michigan Daily, 1981-11-08

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OPINION

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Page 4

Sunday, November 8, 1981

The Michigan Daily

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Edited and managed by students at The University of Michigan

Wasserman
SENATOR, MYOUR

O4AT A15ouT THE

Vol. XCII, No. 52

420 Maynard St.
Ann Arbor, Ml 48109

Editorials represent a majority opinion of the Daily's Editorial Board
Protecting whose family?

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DESPITE complaints from New
Right groups that President
Reagan has forgotten them and their
pleas for the moral reform of America,
the Moral Majority and co. may find
they still have some friends in
Washington.
Several Congressional committees
are now considering the dubious
Family Protection Act- a measure in-
tended to restore American families to
their purest state in light of the
deterioration they have suffered from
two decades of evil social trerds.
The proposal hits everything from
schools to homosexuality to taxes in its
ridiculous efforts to make American
institutions conform to vague and
questionable moral ideals.
Among its features is the familiar
plea for voluntary prayer in public
schools, which besides being con-
situtionally questionable has been in
the past known to sometimes devolve
into something less than voluntary.
In addition, the proposal would
amend the Child Abuse Prevention and
Treatment Act to reinstitute corporal
punishment as an acceptable means
of teaching naughty boys and girls ac-
ceptable behavior.

Shades of Anita Bryant and her
crusades of a few years ago against
homosexuality have resurfaced in the
Family Protection Act. The act would
deny federal assistance to any
organization or individual who ad-
vocates homosexuality as an accep-
table lifestyle.
The implications of this measure are
frightening. Gay rights organizations,
of course, would be the most obvious
targets of this provision. But all
groups, ranging from the Peace Corps
to The University of Michigan, could
also lose funding if they, when asked,
refused to condemn homosexuality as
immoral.
When it comes to saving the family,
civil liberties it would seem are not
important.
With its myriad of other provisions,
the act is trying desperately to rein-
stitute the old fashioned values that
made America great before and will,
its proponents hope, make her great
once again.
Rescinding progressive reforms and
denying basic civil liberties, however,
will only do more to destroy the quality
of life in America than to save it.

A Wef.K
o??oSiNG

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Reagan can't have it al:It's
strength at home or abroad'

A wise foreign policy plan

A LEXANDER HAIG'S State
Department finally seems to be
taking more of an interest in human
rights. The new assistant secretary of
state for human rights, Elliott
Abrams, has drawn up a plan by which
the United States would take a much
more active role in attacking abuses of
human rights abroad, even if the guilty
nations were allies of the United
States.
This proposal, if approved, would be
a seeming reversal of the current
Reagan administration position. The
president . and his State Department
have refused to recognize, much less
criticize, violations of human rights in
a number of nations friendly to the
United States. In Argentina, in Egypt,
in El Salvador, again and again the
Reagan administration declined to
acknowledge flagrant abuses of human
rights, instead opting for stepping up
U.S. assistance in the global battle
against monolithic communism.
Secretary of State Haig surprisingly
has given the policy proposal his OK,
and it is now up to the White House to.
make the final decision on whether the
plan will be implemented. Approval
from the Oval Office would appear
doubtful, but then again who would
have ever predicted Haig's consent.
The Abrams proposal is delightfully

well-reasoned-a breath of fresh air
from an administration whose foreign
policy seems to be largely based on
false assumptions of Soviet ambitions
mixed with a healthy dose of paranoia.
In the policy memorandum, Abrams
argues that the United States cannot
take a hypocritical approach to inter-
national human rights violations if it is
to win the respect of developing Third
World nations. And the trust and sup-
port of these nations, Abrams con-
tinues, is vital if these nations are to be
persuaded to follow the American path
to development rather than the Soviet
example.
So it becomes apparent that even in
this measure the Reagan ad-
ministration has based its policies on a
fear of Soviet expansion rather than
any basic concern for the betterment
of impoverished peoples. Happily,
however, the Abrams policy lends it-
self to serving both U.S. idealistic
goals and more pragmatic con-
siderations about the ideological direc-
tions of the Third World.
Hopefully, President Reagan will see
in it the same virtue and encourage the
State Department to pursue the goals
of global human rights with the same
zeal with which it seeks to counter "the.
Soviet threat."

By Franz Schurmann
President Reagan soon may have to decide
which of his two loves-a healthy American
economy and a forceful U.S. foreign
policy-he loves more. To favor one, as he
now appears to be intimating with his drive,
for a bigger defense and a more vigorous role
abroad, necessarily means pain and illness
for the other.
That is the message the stock and bond
markets alike sent the president in the last
weeks of August. By contrast, some ner-
vousness aside, foreign markets greeted the
president's new global moves by letting the
dollar rise to its highest value in seven or
eight years.
GLOOMY WALL STREET brokers are
convinced that interest rates will stay high,
and that the Treasury will step up its forays
into the capital markets to find new funds to
offset deficits and pay for the defense effort.
The result: Less money for businessmen to
wonder why a president who promised to
revitalize the American economy with new
spending and tax cut policies now appears to
be sacrificing it.
Normally, bond markets go up as stock.
markets go down, because in times of uncer-
tainty people prefer long-term investments.
But the normal dynamics fail if inflation is
aging while the central government offers in-
terest rates even higher than the bond sellers;
and the money markets and ailing savings
and loan institutions are outbidding each
other in a wild scramble for short-term cash.
When the bond market collapses, planning for
the economic, future of the country collapses
with it. "No bonds" means "no money" for
cities to repair roads, sewers or schools.
Cui bono, as the Romans used to say: Who
benefits? The primary beneficiaries of high
interest rates are wealthy Americans and
conservative foreign investors. People who
have money, but do not want to risk it in
productive ventures, are happy to plunk it
down for fool-proof astronomical rates of
return. In the process, tidal waves of foreign
capital are being drawn into the United
States.
IT HARDLY SEEMS in character that so
American a man as Ronald Reagan would use
his presidency to help foreigners make
money. Nor, for that matter, was it in charac-
ter for his predecessor to undertake a series
of measures in March 1980 which helped doom
his re-election. When Jimmy Carter did
nothing to dissuade Federal Reserve chair-
man Paul Volcker to let interest rates rise to
then-unprecedented levels, the country
plunged into a recession on the very eve of the
primaries.'
Yet Reagan now appearsto be moving in
the same direction. His advisers have argued
vigorously that they can hold the deficit down
to some $40 billion, that inflation will continue
to level off, and that "supply-side"
stimulation will so increase the output of the
American economy that we can easily pay for
a vast new defense program. But as long as
interestkrates remain high and the gover-
nment keeps raiding the capital markets,
American business will continue to have
trouble finding capital. The effects,;
moreover, will not be felt by big business, but;
by those myriads of small businesses that ac-
count for the great bulk of new employment inj

0

DOES PRESIDENT REAGAN want a thriving domestic economy, a strong foreign policy,
and the jelly beans, too?

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the United States-the true cutting edge of the
economy.,
HENCE WALL STREET, whose influence
on his decisions was jokingly dismissed by the.
president, now is reassessing its friendship
with Reagan. We don't think you can feed,
clothe, and please both your loves, the finan-
ciers are saying.
Why, then, is Reagan trying to do precisely
that? Why did Carter also try it? The simplest
answer is that ever since Lyndon Johnson lost
his bet that Americans could have guns and
butter at the same time-a forceful posture
abroad (including war) and a Great Society
at home-U.S. presidents have tilted toward
the primacy of foreign policy considerations,
even in economic decision-making. Nixon
engineered his new economic policy
primarily to rectify imbalances in the U.S.
role in the global economy. Ford did not cause
the great recession of 1974-75, but tolerated it
in order to dampen inflation and keep the
dollar strong overseas. Carter's
encouragement of sluggish economic growth
at home, coupled with a strong defense of the
dollar abroad, did much the same.
As the Reagan administration clearly
recognizes, foreign policy cannot be
sacrificed for unilateral economic growth at
home because our dependence on foreign
economies now is irreversible. A few sops to
the automobile industry aside, Washington
has been systematically clearing away
protectionist obstacles to international trade.
With final decontrol of all oil prices, the ad-
ministration even is considering letting
foreign carriers transport Alaskan oil to the
U.S. West Coast; already howls of protest
have come from American shippers and
maritime unions. If U.S. economic well-being
in the end depends more on what happens
abroad than on what is done at home, when
push comes to shove, overseas concerns will
dominate.
A MAJOR ELEMENT among those over-
seas concerns is keeping the price of oil
stable. And indeed, since 1980, oil prices have
been quite stable-so stable that the once-
flooded Rotterdam spot market in oil is ac-

tually drying up. Thus, the most recent rise in
the inflation rate was, for a change, not due to
oil at all.I
Only Saudi Arabia, thanks to the oceans of
oil on which it sits, can control world oil prices
simply by widening or narrowing the spigot of
production. It has kept that spigot wide open,
causing the global oil glut. Coupled with
sluggish economies, this act along has done
more to advance U.S. interest than a
thousand bombers zooming over hostile
skies. It has helped keep Iraq and Iran in line.
It has put the squeeze on Libya and Nigeria.
And here at home it has helped moderate the
single most dangerous inflationary feature in
the price picture-for the time being.
BUT NOW, for the first time since taking
office, President Reagan appears dismayed
by the prospect of an economy, much more
sluggish than anticipated. Meanwhile, thanks
in large part to the effectiveness of his own
administration's tough talk, the defense
buildup is progressing much faster than an-
ticipated. The armed services are demanding
as big a slice of the pie as they can get away
with. The need to bolster the defenses of U.S.
allies argues for even greater expansion:
Japan has already agreed, reluctantly, to buy
more American hardware, and the
sophisticated AWACS planes will now be
rushed to Saudi Arabia.
The simultaneous downturns of both the
stock and the bond markets may on the sur-
face have been created by interest rates and
similar economic worries. But deep down, the
markets always have been more significantly
influenced by "psychology" than by bare-
bone economic facts. The deeper message
seems to be: Mr. President, we are not sure
you know what you are doing, and we are
worried, given past experience in the early
1960s, that too many glowing promises can in
the end only lead to growing catastrophies.
Schurmgnn is a professor of history
and sociology at. the University of
California at Berkeley.

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