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OPINION

Page 4

Tuesday, November 5, 1985

The Michigan Daily
6j

Edited and managed by students at The University of Michigan

On Reagan and Coolidge

Vol. XCVI, No. 44

420 Maynard St.
Ann Arbor, MI 48109

Editorials represent a majority opinion of the Daily's Editorial Board


Low turnout

HEADLINE in Friday's Daily
read "RSG turnout exceeds
expectations."
Ordinarily it would be good news
that a student government, in this
case Rackham Student Gover-
nment, had polled more voters
than expected, but the numbers
here are so insignificant that it is
anything but encouraging.
Only 91 out of 3600 eligible
students voted - roughly 2.5 per-
cent of the electorate. Even so, that
number was one-and-a-half times
as high as last winter's turnout.
Such a low turnout is not a total
indictment of the current RSG
because it was an off election in
which only six seats were up for
grabs, but it shows that RSG is
becoming disturbingly irrelevant
to a large number of . Rackham
students.
Rackham has had difficulty at-
tracting both voters and can-
didates for its student government
for some time. For the six seats
open this time, only two candidates
filed to run.
It's difficult to place the blame
for such apathy. RSG seems to
have publicized the elections fairly
well, yet such an extraordinarily
small turnout suggests they needed
to do more.
On the other hand, Rackham

students have some explaining to
do as well. With roughly one in 40 of
them voting, many of them seem to
have chosen to ignore the elections.
Implicit in such a low turnout is a
call to do away with RSG
altogether, but RSG plays an im-
portant role in campus debate and
acts as one of very few student
checks on Rackham ad-
ministrators.
The recent RSG resolution ex-
pressing strong dissatisfaction
with George Bush as the speaker
for the 25th anniversary
celebration of the Peace Corps
prompted response from the
Michigan Student Assembly and
The Engineering Council, and star-
ted the general debate only now
ending over the Peace Corps and
Bush.
In addition, RSG brings speakers
and hosts forums that might not
otherwise be a part of campus.
RSG must draw considerably
more voters for its spring elections
when it elects a president and the
majority of its representatives. In
the mean time, Rackham students
should begin to educate them-
selves on what their student gover-
nment is doing, and RSG should
redouble its attempts to promote
its activities and encourage
students to vote.

By Dave Kopel
A few months ago, President Reagan had
i the portrait of Thomas Jefferson removed
from the Cabinet Room. Reagan ordered a
portrait of Calvin Coolidge to replace Jef-
ferson's.
The parallels between Reagan's
Presidency and Coolidge's (1923-1929) are
both interesting and frightening. Both
Presidents made few personal decisions
themselves. In Coolidge's autobiography,
he wrote that his most important rule was
"never do something someone else can do
for you."
Reagan cannot match Coolidge's
prodigious sleeping ability (12 hours a day),
but he has brought the afternoon nap back
to the White House.
Both Presidents were social conser-
vatives. Coolidge aligned with rural fun-
damentalists who supported Prohibition
and opposed teaching evolution in the
schools. Today President Reagan tells us,
"Evolution is just a theory," and fights for
school prayer along with Jerry Falwell and
Jimmy Swaggert.
Reagan's economic policy has much in
common with Coolidge's. Coolidge's
Treasury Secretary Andrew Mellon cut the
top tax rate from 50 percent to 25 percent.
(Today this is called "Supply-side"; back
then it was "Trickle-down.")
The tax and economic policies of each
President produced a general prosperity
that earned them a landslide re-election. In
his 1925 inaugural, President Coolidge ob-
Kopel is a recent graduate of the
University's law school now living in
New York.

served that America had achieved "A state
of contentment seldom before seen."
Unfortunately, the Coolidge prosperity
had a dark underside. As today, farmers
were left out and farm bankruptcies sky-
rocketed.
And much of the Coolidge boom was built
on a weak foundation. During the mid-1920s
many people made a fortune in the stock
market, but that stock prosperity contained
the seeds of national economic disaster.
Thanks to non-existent regulation, many of
the new issues were frauds that made short-
term profits for insiders, at the expense of
common investors.
Even honest speculation would later
cause trouble. By buying "on the margin"
(with credit from a broker), investors could
greatly magnify their potential gains or
losses. If an investor pyramided his margin
accounts (buying stock on credit, and then
using that stock as collateral to get more
credit), he could make huge profits on a tiny
investment - as long as the market went
up. For $6,000 in cash, he could buy $95,000
of market action. If the market went down,
he would lose far more than he had
originally invested.
When the market did turn down on "Black
Thursday", margin buyers had to sell at
whatever price they could get, in order to
raise the money to pay off their brokers.
Forced selling of margin accounts unbalan-
ced supply and demand, and drove the
market down even further. The collapse of
the stock market in 1929 was symptomatic
of the near-fatal weakness of an economy
built on speculation and paper en-
trepreneurialism, instead of on true in-
vestment.
President Roosevelt's stock market
reforms of the 1930s, which are still in force
today, did much to take fraud and unhealthy

speculation out of the stock exchanges. Un-
fortunately, paper entrepreneurs have sped
ahead of the regulators, and re-injected in-
stability into the economy.
Business Week recently complained that
stock futures and stock options (both of
which are much less regulated than the un-
derlying stocks themselves) have "whip-
sawed" the market.
To buy stocks on the margin today, one
must put down cash worth at least 50 per-
cent of the stock's value; but to buy a stock
index future (essentially a bet on which way
the market will go), one can put up as little
as 1 percent of the stock's value.
The proliferation of financial instruments
such as mortgage-backed securities is
channeling more and more of America's
capital into paper transactions that add
nothing to productivity. As in the '20s, a
"merger mania" (driven by leveraged buy-
outs, junk bonds, and greenmail), has done
much to redivide the economic pie, but little
to make the pie grow.
If the economy stumbles, we may
discover that the Reagan boom was just as
much a house of cards as was the Coolidge
prosperity. "We are living in a fool's
paradise" observed leading investment
banker Herbert A. Allan, Jr. The head of
First Boston worries about a collapse worse
than the 1929 one. Bank failures are already
at the highest level since the Depression,
and only a U.S. government bail-out preven-
ted the Continental Illinois Bank's bankrup-
tcy from triggering a financial crisis.
Coolidge had the good fortune to leave of-
fice three months before the Great
Depression struck. From the sidelines, he
observed, "When more and more people are
thrown out of work, unemployment
results." One wonders if President Reagan
will have an equally apt observation.

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Blah!

N ODD YEARLY phenomenon
is slowly unfolding across Ann
Arbor: color is leaving.
After the glorious rainbow burst
of fall, anything would seem dull,
but Ann Arbor seems particularly
colorless. Once blue skies now
seem completely washed out and
even newly blackened streets seem
to fade to a dismal grey.
Everywhere one looks, color has
left in its place a mere shadow of
its true self. The sun doesn't
penetrate the morning gloom until
noon, when, if it doesn't rain,
clouds start to billow by.
What little color there is to be
found is unnatural: neon signs
along State Street or orange and
lemon-yellow posters on different
kiosks; or, worst of all, bright blue
around the diag M.'
Cheerful clothes have given way
to brown and grey warm ones, and
bulky coats make it easier to face
the ground than look forward.
Even the usually dependable
grass is fading away as the com-
bination of rain and trespassing
mashes it into a brown-green pulp.

Colorless nature has its counter-
part in the academic year as the
indefinable, unscheduled "blah
time" sets in. The first few weeks
of the term have an identity, mid-
terms are a tangible period, and
finals constitute an almost
physical entity, but the period bet-
ween midterms and Thanksgiving
has nothing to distinguish it.
Weekend jaunts start to seem a
virtual necessity, making Friday
and Saturday night parties come
up short one or two expected
guests.
Homework starts to pile up, but
with very little to make it pressing,
it tends to stay piled up.
With football season coming to
an untimely close, excuses for
spending time outside dry up and
turn brown, and even the early
morning walk to class becomes
painful where it once was only
tedious.
There is hope - it's called
Thanksgiving - but it's still three
weeks away. And three weeks is a
long time to stare at grey.
--

DAILYi
LETTERS:
'U' coolness criteria questioned

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To the Daily:
In the Today column on Oc-
tober 25 ("University of cool")
the Daily blithely reported that a
"drug advocacy magazine" con-
siders the University of Michigan
to be one of the nation's "cool
campuses". The magazine had
described "cool campuses", it
was reported, as places where
"...activism is not a dirty word,
where a creative education can
still be obtained, and where over-
the-edge partying is still more
important than cramming for an
Economics exam."
At the risk of sounding
schoolmarmish, I must confess
that something about this list of
"coolness" criteria makes me
uncomfortable. Which of these
three do you think does not
belong?
Unless the author's intention
was to cast aspersions on the
value of Economics courses in
general (in which case, judging
from personal experience, I am

whose hallway they deign to
vomit in, and who, out of some
inexplicable fascination with loud
noises of any kind, often make it

difficult to study and at times
turn my neighborhood into a bot-
tle-rocket free-fire zone, are
without doubt among the least

cool elements of our campus
community.
-Adam Bernsteif
October 26

Vote for MSA, it's the American way

To the Daily;
There has been much
discussion lately that MSA does
not represent the views of the
mainstream of the student
body. My friend Jeff Evans and
others to the left of him complain
that MSA is catering to a very
small but very vocal minority of
the University community. There
are cries to defund MSA and
bypass its duly constituted
powers. Why doesn't MSA
represent the student body? The
reason is that in the last election
only 20% of the student body cast
ballots.
My advice to Mr. Evans and
others who oppose the current
BLOOM COUNTY

MSA policies is to run a party and
vote out the current government.
This is the American way. When
President Carter was supporting
projects that Mr. Evans and the
majority of the American public
did not approve of they did not
call on taxpayers to withhold
their checks - they voted him out
of office. If the right thinks that
MSA is too leftist then they can
exercise their franchise and vote
in delegates and a president that
is more compatible with their
views.
Time will tell whether this
issue of MSA accountability is
just a flash in the pan. The time
will be in the spring when new

people will run and the students
will vote. If only a fifth of the con-
stituency participates in the elec-
tions then the other four fifths
have no justification for com-
plaining ex post facto. I don't
mean to single out Jeff, but if he
and others do not approve of MSA
the answer is simple - VOTE
THEM OUT. If students don't
vote they have to take what
comes at them.
-Andrew Hartman
October 30
Hartman was the president
of College Democrats during
1983-84.
16ira Ra"1a M s a

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