In the third place, we have assumed that programs for economic growth could be effective, without developing effective programs to improve distributive justice, liquidate poverty, clear our slums and rebuild our cities, purify our poisoned airs and waters, and bring our basic health services and public schools into line of elementary standards of deficiency for all. Indeed, this erroneous idea has thoroughly impregnated actual national economic policy, especially fiscal and monetary policy, for many a year. And the irony of all this is that we have made as unsatisfactory a record as I have already reviewed, with respect to economic growth and full employment in the long run, just because we have failed to recognize that the unique characteristic of the American economy is that those programs which will do most on the score of justice and meeting human needs are precisely the same as those which will do most on the score of economic growth and full employment. If we could bring ourselves to recognize this towering fact, we would realize that we in America, through the identity of these two purposes and the means of their attainment, are blessed as no people have ever been before in human history, or even are today. In the fourth place, we have become so obsessed with the problem of containing inflation that we have almost relegated to the background other problems of equal and even far greater significance. The truth of the matter is that it is technically possible for economic growth and social progress or the reverse to occur under wither a rising or stable or falling price level. A moderately rising price level, if caused by programs which advance social justice and meet our great domestic priorities, would be fully acceptable, and of mutual benefit. But the kind of inflation we have had in recent years, and have now in even more virulent form, generated deliberately by stunting economic growth, denying social justice, and neglecting our great domestic priorities, is both intolerable ad stupid. It is stupid, not only from the viewpoint of ultimate values, but also from the viewpoint of pure economics. For the cumulative weight of experience since 1953 has demonstrated conclusively that we have had the least price inflation when the economy was growing relatively rapidly, and when unemployment was being reduced greatly, such as during 1961-1966. As shown on my Chart 11, price inflation during recessionary periods, such as 1957-1958 and, above all, during the past three years when the economy has moved into intensifying stagnation and now into recession. The only workable economic program is one which incorporates the limited problem of restraining inflation within the ambit of a long-range and unified program for growth, priorities, and justice. How immoral, aside from being stupid, it is to hear today the paeons of pride that we have succeeded, through strenuous efforts, in bringing economic growth to a halt, and that we face the prospect of rising unemployment. Yet today, in the name of combatting inflation, we have vetoes of spending for education and health, while more than the amounts vetoed were recently doled out to the affluent in untimely and regressive tax reductions, and while the interest rate paid to huge bank depositors has been lifted to almost twice the interest rate paid on meager savings. Still another example of not seeing things as a whole has been the "war against poverty", and the closely related problem of high unemployment among vulnerable groups. We have defined poverty as a highly insulated aspect of our national life, identified the poor as a special class, and sought to improve their lot by processing their personal characteristics. Instead, as I urged from the outset, we should have recognized that the preponderance of the poverty in our midst results from lack of an adequate unified program for growth, priorities, and justice, which should have proceeded through a few strategic measures at the national level -- such as guaranteed full employment and a universal minimum income -- without riveting such excessive "attention" upon the poor. The fragmentation has resulted in errant experimentation instead of learning from experience, myriads of disconnected programs at all levels, promises far in excess of performance, and widespread disillusionment. Happily, some correctives, along the lines I have urged, are beginning to enter the public discussion, and there have even been some top-level recommendations for national policies of this type. Closely allied to the poverty program is the allegedly new notion of "participation" or "getting a part of the action". If this were to import that all citizens should be educated and inspired to support one great nationwide purpose and program through political and other action, initiated and adequately supported by the Federal Government, but carried forward also at State and local levels of government and throughout private industry, that would be all to the good. But when the idea of participation becomes degraded into the notion that 200 million citizens can each participate in formulating the programs they need, and that the poorest and most retarded subsections of localities can control and determine the teachers and the teachings in the public schools, we have substituted chaos for democracy, substituted disintegration for useful decentralization, and done this in the thought that we could thus get by on the cheap. Granted our Federal system, there is nothing clearer than that there is no hope for the American people except in increased recognition of nationwide responsibility, largely through immensely increased Federal investment, and sparked by a unified and rationalized Federal program. I am a friend of our private enterprise system; but nothing does it greater injustice than to fail to recognize that its role is to earn private profits, while the role of Government is to activate public profit. The motive of private profits cannot clear slums, clean up the Potomac, nor develop a universal health service. In these matters, let us render unto Caesar that which is Caesar's, and render unto God that which is God's. The analogy is not perfect because I do not subscribe to any doctrine of the infallability of our Federal Government. But we are going to need more rather than less of Federal action to get out of the woods. Mr. Chairman and Members of the Subcommittee, I respectfully submit that, until we cure ourselves of these ills and reformulate our course accordingly, manpower training and service programs, however much improved, will not begin to have the opportunity to accomplish what they can accomplish in more favorable overall economic environment. As I indicated at the outset, I see very encouraging signs that the proposals now before this Committee recognize the validity of much of what I say. Section 2(g) and (h) of H.R. 11620 expresses precisely the need to guarantee meaingful employment opportunities for all American; that this requires public investment to the extent that the private sector is unable to provide such opportunities; and that there are great unfulfilled public needs in many fields. Title III of the same bill is entitled "Public Service Employment", and is both useful and pertinent. But the authority granted to the Secretary of Labor in Section 301 to contract for useful public-service employment to underemployed persons touches only a tiny fragment of the public-employment and public-investment aspects of the whole employment problem in the years ahead. In Title V, Section 501(a)(1) calls upon the Secretary of Labor to research and evaluate the problems created by technological progress and other changes in the structure of production and demand as these impact upon the use of the nation's human resources. But what the Department of Labor can do in this respect, while important, is a mere bagatelle compared to the size and scope of this problem. It is the Council of Economic Advisers which needs to explore this matter thoroughly, and to integrate a long-range Job budget with the other goals, policies, and programs of the Federal Government at large. Section 504(a) of the bill is to be commended for authorizing the Secretary of Labor to develop a comprehensive system of labor market information. But for reasons I have already stated, information of what exists cannot substitute for the immensely larger problem of job planning and job creation, not only quantitatively, but also qualitatively in terms of the types of products and services we need. Without this emphasis upon priorities of need, even the projection or even creation of job opportunities tend to reaffirm the past rather than to meet the needs of the future. My comments with respect to H.R. 10908 introduced by Mr. Steiger and others, and upon H.R. 13472 introduced by Mr. Ayres and others, are basically the same as those I have offered with respect to H.R. 11620, introduced by Mr. O'Hara and others. Each of these three bills has many good proposals, and I respectfully suggest that each of them may fall short of adequate attention to the larger issues I have sought to raise here today. I may not have the technical competence to evaluate the details nor the relative merits of these three bills, nor have I had the time to do so since I received the kind invitation to offer my testimony here today. But I am confident that the details can be straightened out and reconciled, and I hope that the most meritorious of the proposals contained in each of these three bills can be brought together in one measure, and gain the approval of the Congress. I commend all those who have participated in the sponsorship of these necessary measures and trust that they will not be critical of my comments upon their limitations. I am greatly heartened by the underlying purposes which have impelled the introduction of these three measures relating to manpower training and service, and by the prospect they offer for even wider endeavors on the part of the sponsors of these measures, and by the Committee on Education and Labor. This is what has prompted me to open up the larger issues touched upon in my testimony here today. This also prompts me to go one step further, and ask leave to introduce into the record a model bill which I have worked on for some time, suggesting how the Employment Act of 1946 needs to be realigned to fulfill its original promise. I earnestly hope that those on the Committee who are here today, its entire membership, the sponsors of the three bills now under consideration, and other members of the Congress, will find the time to examine this proposal of mine in detail. I think that those who do so will find it suggestive and helpful. If any members of the Congress should later desire to implement any parts of my proposal, I shall be more than glad to make available to them such help as I can. |