“When Nixon initiated Phase I of the
new economic policy (NEP),” says author
Martin Nicolaus, “he was reacting to two
particular crises, the first being the crisis
of overproduction and the second being the
balance of payments and trade crisis.”
Nicolaus, an ex-sociologist and author of
“The Unknown Marx” and “Fat Cat
Sociology," spoke Thursday evening on
Nixon’s new economic policies and the new
world crisis.
The big controversy of the over
production crisis is “who can afford to buy
things,” says Nicolaus. The factories are
becoming more mechanized and
automatic, thus driving many workers out
of jobs. The stockpiling cannot be sold
while the producers are on welfare and
unemployment.
“It is a clear case of erosion of buying
power versus increased capitalistic
production.”
By HANDY YOUNG
Of the Emerald
On the international scene, Nixon’s
announcement of the non-converting and
devaluation of the dollar was in reaction to
a large outflow of American dollars to
other countries, says Nicolaus.
One third of all American corporations
expand abroad and take billions of dollars
in capital with them Nixon calls these
people “speculators and money
manipulators.” However, many of these
companies were big Nixon supporters in
the last election, says Nicolaus.
“These companies only want profit,”
says Nicolaus, “and they speculate by
buying other countries’ currencies. They
couldn’t however, make a profit unless
there was a dollar devaluation.”
The question arises as to where the pool
of 50 to 70 billion dollars these companies
speculate with comes from.
“It didn’t come from U.S. trade relations
in commodities,” says Nicolaus, “because
there are not more dollars going out than
there are coming in, nor did the funds
eminate from foreign aid, as the U.S. is not
too generous and most aid is spent in the
U.S.”
“The vast pools of speculators' money
come, in fact, from military spending,”
Martin Nicolaus says:
Nixon’s new economic
policy reacting to crises
Nicolaus explains. When American cor
porations go into foreign countries, they
demand protection from military. At this
time the U S. has two to three thousand
military bases around the world, says
Nicolaus, and the cost is tremendous.
“Since 1953, the U.S. has been paying
two thirds of the French Indochina war
costs plus the costs of the new Indochina
war," says Nicolaus. “A very con
servative estimate for total foreign ex
penditures by the military comes close to
130 billion dollars.”
“These military expenditures are the
major causes for the balance of payments
deficit for the last twenty years,” he adds.
How does one raise money to finance a
war?
One method is to openly tax the
population, however the government
doesn’t prefer to do that because it is very
visible to the citizen, says Nicolaus.
The second and most preferred way is to
just print more money. The process begins
by the Secretary of the Treasury asking
for an extension of the national debt ceiling
(which presently is about 420 billion
dollars). To finance this extension, the
government borrows money, through
bonds, from a banking co-operative in New
York These banks in turn get a share of
the government’s tax revenues through a
27 per cent interest on the bonds, says
Nicolaus.
“The Federal Reserve Bank then buys
these bonds from the bank co-op at full
face value, with money freshly printed and
delivered by a mint officer.”
“This is what the government is doing to
support the Vietnam war,” says Nicolaus,
“and the dollar is becoming worthless. The
result is that American imperialism is
being defeated in Indochina.”
The second main crisis, nationally and
internationally, is the balance of trade
deficit.
“During the past years there has been a
constant creeping-up of prices on U.S.
products. This increase is larger and
faster than any other capitalistic country
and more foreign powers are attracted not
to buy American products because they
are more expensive,” says Nicolaus.
“The U.S., in effect, has priced itself out
of the world market.”
Here in America, the freeze on wages
has accomplished in taking away the
wages of union workers rather than just
establishing a ceiling, says Nicolaus.
“This put frozen raise funds in the
owners’ pockets and over 1.5 billion dollars
worth of raises were transferred to the
profit side of the ledgers.”
Since Phase I unions and the Senate
Banking Committee have fought for
retroactivity of wages and raises. To force
the return of these wages, says Nicolaus,
the union must be strong and organized.
“The coal miners union got militant and
got away with a 15M> per cent pay increase.
However, the employes of Fridgidare in
Dayton, Ohio took a 25 cent decrease in
hourly wages and benefit cuts in order to
allow more workers back on the payroll,”
says Nicolaus.
In spite of the NEP and national crises,
corporations have had significant in
creases in their profits, says Nicolaus.
“Ford Motor Company had a 45.5 per cent
increase in profits last year in spite of the
overproduction crisis, and Bethlehem
Steel Corpbration experienced a 50 per
cent increase in profits.”
Tax cuts are being enforced for cor
porations and tax payers alike. However,
the values of such a cut for the individual
will diminish in relation to increasing
prices.
The 14 per cent tax cut for the cor
porations are to go towards more
machinery, says Nicolaus. This total of
eight to nine billion dollars will just in
crease the overproduction crisis, because
at this time 25 per cent of the nation’s
machinery stands idle.
“It will just put that many more people
out of jobs.”
The NEP is dropping the seven per cent
excise tax on automobiles, and Detroit
manufacturers say it will be good for the
economy and that it will create 50,000 more
jobs in Detroit. This fact, however, stands
on the presumption that there will be no
further automation, dealers won’t add on
more costs and that the consumers will
have the money to buy cars in the first
place, says Nicolaus.
“This is too paltry a thing to have any
real effect.”
“Furthermore, the federal employment
will be cut five per cent,” says Nicolaus.
“This is stupid. Perhaps Mr. Nixon thinks
that they should all go to Detroit and get
jobs as autoworkers.”
“The welfare reforms in NEP copy
California Governor Ronald Reagan’s
policies to force people to go to work to
earn their welfare checks, says Nicolaus.
This work may be as “scab” workers to
break strikes, or in labor camps which are
a step up to the slave labor camps such as
the Japanese were held in during World
War II.”
“As to Phase III,” says Nicolaus, “I
really can’t forsee exactly what it will
consist of as Mr. Nixon is full of tricky
surprises.”
“There has been a five per cent decrease
in total trade in capitalistic countries, and
the chances for a quick and absolute
recovery are almost nil. Conditions are
getting progressively worse and will most
likely continue at this pace for the next two
to three years,” Nicolaus says.
“No changes can be made until this
government is replaced; not only the
party, because that is not going to make
much difference in the NEP. The chances
for a socialist revolution for the recon
struction of this society are very good.”
“Only a socialist government can free
people from manual labor and yet give the
people a job.”
Funding
requested
for
coordinating
agency
A new agency may be funded with $2590 by the
ASUO next year to handle student coordination with
the State Legislature.
Proponents of the new agency, called the
Legislative Coordinator, presented a budget
request for 1972-73 at Friday night’s ASUO Fiscal
Affairs Committee hearing.
Other student agencies which presented budget
proposals for next year were the ASUO Executive
office, the ASUO Senate office and ASUO Legal
Services.
Included in the budget proposal for a Legislative
Coordinator office was one agency director, to be
paid for nine months at $105 a month, and a
secretary, to be paid for nine months at $40 a month.
The $2590 budget request also called for $450 for
telephone and telegraph costs, $50 for postage, $50
for office supplies, $100 for printing and duplication,
$500 for travel and $100 for reference material.
ASUO Senate President Stephanie Larsen and
ASUO Controller Ray Meehan, who presented the
request, explained to the committee thatjunding for
legislative coordination had been “squeezed” out of
the ASUO Executive’s budget this year and last
year.
Ms. Larsen said the agency director’s respon
sibilities would be to “keep track of all of the bills”
and to “make sure” that all students who want to
lobby can do so.
Meehan said the director would be elected by
consensus from an ASUO Senate legislative com
mittee, the ASUO President, and the total student
body.
The ASUO Executive office’s budget request for
1972-73 was $2525 less than it received for this school
year. Its request was for $25,830.
Line item increases in the budget request were for
temporary employees from $200 to $400 and for
publicity from $500 to $1000.
ASUO Administrative Assistant A1 King, who
presented the executive’s budget proposal, said the
increase for temporary employees was “pretty
reasonable” because of work with the State
Legislature.
King explained the publicity request increase by
saying, “We’ve been stymied several times ac
cording to cost of publicity this year.”
The major line item decrease in the executive’s
1972-73 budget request was the elimination of a
reserve fund, which amounted to $3590 this year.
King said. Also, the executive requested $150 less
for set up and $150 less for audio visual, and $500 less
for research and development.
The request for 1972-73 by the ASUO Senate office
was virtually the same as this yeir’s $19,503 senate
budget, except for a request for an increase in the
senate reserve fund from $12,000 to $20,000.
Tonight at 7 in 337 EMU. the committee will hear
a budget request from the Athletic Department.
Ms. Larsen, who presented the senate office’s
request, told the committee, “A lot depends on the
philosophy of the committee” as to the
“flexibility” of the senate reserve fund.
The ASUO Legal Services presented a 1972-73
budget request which was about the same as this
year’s amount allocated to it.
Under the 1971-72 contract between the ASUO and
ASUO Legal Services, the services will receive
$17,375, plus a $1000 contingency fund if the ser
vices’ caseload increases to a certain level.
Robert Ackerman, Springfield lawyer and at
torney for the ASUO Legal Services, who presented
the 1972-73 budget request, said the request for next
year is $18,000 with a $1000 contingency fund.
Ackerman reported that, up until Feb. 15 more
than 400 students had consulted the ASUO Legal
Services office for advice, many wanting legal help
in landlord-tenant disputes.
He said the legal services office has served “a
real cross-section of the University community”
this year, in its first year of existence. “I’ve been
amazed at the variety of student that has come in,”
Ackerman said, “but primarily the student that
comes in to see us is of low-income or minority
groups.”
The ASUO Legal Services consists of two lawyers,
Ackerman and Springfield attorney R.C. Owens,
and two secretaries.
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