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South's governors alerted on erosion of hard-won economic gains

Fifty years ago President Franklin D. Roosevelt called a number of Southeastern governors to the Little White House, his cottage in Warm Springs, Ga., to map out ways of battling the region's widespread poverty.

Today that battle is still far from finished, despite major progress.

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Meeting this week in colonial Williamsburg, Southern governors were warned of two current trends that could weaken the region's, and the nation's, economy if unchecked - rising health-care costs and educational standards inferior to those in Europe and Japan.

Americans are spending $1 billion a day on health care, but much of it is unnecessary expense, former Health, Education, and Welfare Secretary Joseph A. Califano Jr. told the governors. ''Excessive health-care costs are eroding America's ability to compete with foreign companies,'' Mr. Califano said.

Because the South's favorable climate continues to attract new residents, especially the elderly, health-care issues are important in this region, he explained.

In general, people turn too quickly to medical care, Califano said. ''The patient came to view miracle drugs and medical technology as tickets to a hedonistic life style - a license, if you will, to drink more and to smoke, to sleep and exercise less, to subject mind and body to unlimited stress.''

One result, he said, is the surge in health-care costs, which have become ''the most inflationary sector of the American economy.''

He urged closer cooperation between federal, state, and local oficials to come up with a national health-care policy under which controls at one level would not result in costs passed to another level.

Lester Thurow, professor of economics and management at Massachusetts Institute of Technology, told the state leaders that inadequate education standards are weakening America's ability to compete in the world economy. While high health-care costs paid through company insurance plans are making the US less competitive with some foreign manufacturers, a shorter school year than that in Europe or Japan is also hurting, said Professor Thurow.

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Japan is producing video recorders at the rate of 20 million a year while the US is producing zero, he said. And the Japanese are trying to launch a new industry: making garments by robot to meet individual specification orders.

If successful, it will mean more competition with the US garment industry, Thurow warned.

He rejects the idea that the ''work ethic'' is stronger than in the South than in other regions and suggests educational reforms to produce a more qualified work force.

But another former HEW secretary, David Matthews, noted that a grass-roots response to the educational challenge is already under way in the South. A similar approach is needed to curtail infant mortality, he said here.

Dr. Matthews, now president of the Kettering Foundation, said he is encouraged by the educational reforms already under way in most Southern states.

The challenge now, he said, is to implement new education legislation embodying reforms launched by pressure from ordinary people, not officials.

A similar approach involving churches, families and community groups could cut infant mortalities in half, Matthews said.

In spurring such action, a sense of community is needed, he said, adding that ''the new Southern leadership has maintained a cultural identity'' for the region which can nurture such a sense of community.

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