Democrats on the economy: business view is negative
The economic platform of the Democratic Party has not won many converts among the business community. Rather, business views the $12 billion job creation program as unnecessary -- as President Carter has likewise indicated. Furthermore, businessmen are concerned that the program, if eventually enacted, could result in another spurt of inflation.
Theodore F. Brophy, chairman and chief executive officer of General Telephone & Electronics, comments: "The $12 billion, I'm afraid, will be too late in the economic cycle to be useful, if it's enacted, and might very well be highly inflationary. Everyone suffers from inflation; it's a cruel tax."
Another executive, Don B. Tostenrud, chairman of the Arizona Bank, says, "I think there are many other ways of approaching the problem [of unemployment], rather than through a federal giveaway program." Instead, Mr. Tostenrud says he would prefer "a reduction in taxes with special emphasis on capital formation."
Even Carter supporters -- a rarity among businessmen -- say they cannot go along with the Democratic economic plank. Irving S. Shapiro, chairman of E.I. du Pont de Nemours & Co., comments, "We have never been pursuaded that the solution to unemployment problems can be solved by creating government jobs. It is a recognized fact now that we had double-digit inflation, and it was deemed necessary to cool off the economy to bring the inflation rate down. . . . Simply pouring $12 billion into the economy with an accompanying deficit will feed the fires of inflation and do little if anything to help the unemployed."
How, then, can Mr. Shapiro support President Carter? "I would not let my judgment turn on the nonsense that goes into political platforms," he replies, adding, "I base it on a comparison of what I think Carter compared with Reagan can do."
Naturally, not all executives are opposed to the $12 billion program. Lewis Abrams, president of Executive Enterprises, Inc. an executive education service, says he supports the program since he views it as a positive, rather than defensive, measure. "The $12 billion," he states, "dramatizes the need to move forward in a strong and positive way. The infusion of money to make something move forward is exactly what is needed."
However, businessmen for the most part feel the same as Jeffrey Brotman, President of ENI Exploration Company, based in Seattle. Mr. Brotman says that "there is no question $12 billion would create a lot of jobs, but it's not a rational approach." He says the amount represents "pure, unadulterated election year pandering," and he adds, "If we have to live with the pandering, it may not be in the same style we're accustomed to."
John W. Fischer, chairman of Ball Corporation, Muncie, Ind., and also chairman of the National Association of Manufacturers (NAM), takes up this same theme, noting. "It seems to me that our economic problems are caused by excessive governmental spending, and nothing in the Democrats' platform as suggested or adopted seems to have changed that." He reasons that governmental spending removes money from more productive uses and this in turn helps create inflation and consequent unemployment. He adds, "Nothing seems less fair than promising jobs or the prospects of jobs in a way that can only lead to more inflation."
As with most businessmen, Mr. Fischer says that what is needed is selected tax relief for businesses so that plant and equipment can be depreciated faster.
Despite his negative comments about the Democratic plank, this did not stop the NAM from sponsoring a two-day seminar on politicking during the convention. Included in the seminar was a breakfast at the Tavern on the Green restaurant, where businessmen and their Washington lobbyists could meet and greet some of the Democratic candidates. The breakfast, said an observer who was there, was a good exercise for businessmen to try to find some Democratic candidates they could support -- both verbally and financially.
There is one aspect of the Democratic plank that businessmen were all pleased with: There is no mention of wage-and-price controls, as the Kennedy forces had tried to get adopted. Notes Mr. Tostenrud, the Arizona banker, "I could not agree more with the rejection of wage and price controls. The sooner the controls we already have [the wage-price guidelines] are lifted, the better off we will be."