The Pittsburgh Press from Pittsburgh, Pennsylvania • Page 9

D3 The Pittsburgh Press Monday, April 27, 1987 OPINION policies may brake Henry Ford's economy E- Ttf 1 ifi Maynard Keynes and Henry Ford. And this curious history will, I hope, help explain our present plight Ford was both a crank and a genius, an anti-Semite and anti-Catholic who perfected the assembly-line techniques already begun in other industries. Moreover, he understood a critically important proposition: The incredible potential of mass production meant that there had to be mass consumption. That was why, before World War he paid the unheard of wage of $5 a day. He tried to persuade his fellow capitalists to follow suit Otherwise, he argued, mass production would turn into a mass overproduction and underconsumption.

Ford failed to persuade the captains of industry and his fears were realized between 1929 and 1931 when suddenly America had produced "too much" because wages had lagged behind productivity throughout the 1920s. Shoe plants were closed in a nation with barefoot people and willing shoe workers. President Franklin D. Roosevelt nationalized Ford's basic idea. That is, the New Deal created a structure in which social insurance programs, collective bargaining and a government committed to creating jobs built a floor under mass consumption.

Most corporate leaders saw "socialism" or "communism" in these reforms. They did not realize that Roosevelt was socializing a huge new market from which they could profit. After World War II, they finally grasped that fact. So from Roosevelt through Jimmy Carter, every president stuck to that New Deal line Dwight D. Eisen- Shifting By Michael Harrington America is living in an economic house of cards.

The Wall Street Journal recently noted that people were worried that slow growth in Europe and the debt-induced shrinkage of Third World markets could bring the faltering American economy into a recession. And the recent gyrations on Wall Street itself testify eloquently to how widespread these fears are. This is, in short, a very precarious and even paranoid fifth year of a "recovery" that itself has been uneven and contradictory from the very first But haven't business cycles always witnessed such oscillations and anxieties? Aren't we just dealing with another of those inevitable blips in economic life? I think not. I am not suggesting that 1929 is once more at hand or even that a -mild recession is sure to take place as a result of events this spring. I do assert the American economy is in deep structural trouble and, the next two or three years, will be another downturn.

Moreover, that event will not just be a blip but a moment in a major economic transition that could change our lives as much as 1929 did, even if in quite different ways. The Great Depression was not started by a terrible day on the stock market in 1929. That was the occasion of its onset and, for that matter, Wall Street recovered from Black Tuesday. The abyss didn't open up for a year or so. What was involved was more profound than a one-day nose-dive: It was a crisis of kind foreseen by Karl Marx, John.

(Reagan's TvnouiiUiiri! ilea a mail out there in the blue, ridin' on a smile and a shoeshine a salesman has got to dream, boys," says Willy Loman in "Death of a Salesman." Those lines could be the credo of Ronald Reagan, the best salesman who ever worked the Oval Office territory. He's our Willy Loman, out there in the electronic blue, ridin' a smile and a video beam. But Willy never had a dream as big or fanciful as Reagan's Star Wars missile defense system. For four years Reagan has piuggea tor ms zuiion-aouar umorei-la against nuclear missiles. Sure, the Strategic Defense Initiative is so futuristic and Rube Gold-bergish, it sometimes seems only three men really believe it will work r-f i neagan, ueiense oecreiary uap Weinberger, and SDI director Lt.

Gen. James Abrahamson. And two of them may have doubts. But Reagan's belief is so unshake-able, he's eager to start putting a the European economies. And the Third World, Latin America above all, discovered that it was completely in hock, not to governments, but to private banks.

So its ability to consume also declined. We have, I think, created the conditions for a return of the problem defined by Henry Ford. Sooner or later, corporations, nations and individuals will not be able to avoid the consequences of these trends by borrowing. Indeed, even a mild recession could turn into a financial panic if only a relatively small percentage of the hoards of debtors in this world defaulted on their payments. Will we fall into an abyss as we did in 1929-32? Probably not although that scenario cannot be ruled out The fact of the matter is that the economy is structurally booby-trapped because Ronald Reagan, the most radical politician in 20th-century America, drastically redistributed income and security upwards and thereby laid the basis for a new crisis on the old model.

The American economy cannot forever live off of yuppies and the croissant market, or keep mortgaging its future to obliging foreigners. It is going to have to learn what old Henry Ford perceived and Roosevelt legislated: that raising the consumption of the people is good for everyone. But it is going to have to discover how to do that under conditions of internationalization and automation that Ford and Roosevelt never imagined. (Michael Harrington, co-chair of the Democratic Socialists of America, is author of "The Next Left," published by Holt.) by facts Bet that the panel's harsh judgement on Star Wars will be quoted in 1988 presidential TV debates. Generally, Democratic contenders want to slow down Star Wars.

Republicans especially gung-ho Jack Kemp are hot to push Ron's space shield. But the physicists say such 1988 palaver is premature mush. The politician who decides "Star Wars'" fate in 2004, to pick names at random, may be President Joseph Kennedy II or President Olympia Snowe. Who knows? But don't expect the panel to cool the fervor of Reagan, who, like Alice in Wonderland, "can believe six impossible things before breakfast" Willy Loman never stops selling. Even if the product is a lemon.

(Sandy Grady is a Washington' correspondent for Knight-Ridder Newspapers.) sales pitch for Star Wars defense unfazed huge surge in the gross national product. That didn't happen. But there was a significant shift in the buying power of a great mass of the people, a historic reversal of the trends that lasted from 1933 to 1980. The top 20 percent did marvelously well and there was a huge increase in a poverty that persisted even in "good" times. The middle of the society saw its real income decline after hitting a peak in 1973 and its situation has become quite shaky.

At the same time, there were similar trends in lambasts the report as "out of date." Reagan and the Pentagon chiefs fear the physicists' cold water will splash more doubts in Congress. The $5.8 billion Star Wars budget may be cut to $3.5 billion. On Thursday, SDI chief Abrahamsom got a rough grilling behind Senate closed doors. "The report's unduly pessimistic," groused Star Wars defender Abrahamson. "More budget cuts will be devastating." What's devastating to Reagan's pipedream, though, is the scientists' chilly disbelief saying a laser-beam defense needs research "of several orders of magnitude" and the Soviets could bamboozle it with a half-million decoy warheads.

When the Pentagon trotted out its scientist, Dr. Lou Marquet, he said brightly, "Well, they didn't say we were out of our minds." No, but close, Doc. Ford's wisdom upside down: It was, they said, necessary to make the economy more mean if it was to become more productive. Thus it was that President Reagan took food stamps and Medicaid away from the working poor, raised the taxes of everyone at the bottom of the society and provided huge tax subsidies for the very wealthy. This, it was said, would lead to such an investment boom that the lost tax revenue and the billions of dollars being spent on weapons that threaten the existence of the planet would be more than paid for by a Reagan isn't in the Star Wars ballpark.

Even his successor won't have the hardware to stop a nuclear attack. One scientist, Jeremiah Sullivan of the University of Illinois, called Reagan's rush to throw up a few anti-missile weapons in the 1990s a "gamble." For a full-blown defense, lasers would have to be "improved 100 times." Now, these guys aren't a bunch of pointy-headed "Stop Star Wars" protesters in Lafayette Park. They're our brightest physicists. Some worked on Star wars research. Three are Nobel Prize winners.

Their skepticism toward Star Wars is so brutal, the Pentagon claiming the classified stuff super-secret sat on the report seven months. Then Pentagon spokesman Robert Sims talk about Catch 22 1 "TVJ SANDY GRADY half-baked system in the sky by the early 1990s. Reagan's persistence shows a president can sell almost anything if he keeps hustling. Or maybe P.T. mm Trimont Style Natural Wonder Cosmetics hower as well as Harry S.

Truman, Richard M. Nixon and Lyndon B. Johnson. And from 1945 to about 1970, there was the antithesis of the Great Depression. The conservative thinker, Friedrich von Hayek, called it the Great Prosperity.

It demonstrated, among many other things, that social justice is good economics. In the '70s, a whole complex of events the unprecedented internationalization of the American economy, the shift from smokestacks to services, automation, to name only a few undercut that Ford-Roosevelt solution. Indeed, the Right turned Barnum was right about a sucker being born every minute. One poll finds most Americans believe the United States already has a defense against Soviet missiles. Given that Peter Pan trust, congressional skeptics grumble and pour $3 billion or $4 billion a year into Reagan's dreamchild.

But the boom you heard Thursday was Star Wars taking a direct hit. A group of 17 top American physicists, using the Pentagon's own classified data, said it may be the 21st century before we know enough about lasers, particle beams and nuclear X-rays to decide whether Star Wars can work. "Even in the best of circumstances, a decade or more of intensive research would be needed for an informed decision about the most promising weapons," said the panel in its 422-page technical study. Translated: Star Wars is a very distant pie in the sky. The scientists said, in effect, that I I I ilLr- 1 Hi Buy a Natural Wonder lipstick or nail enamel or any other Natural Wonder Product 'Except Trial Sizes Jake this coupon to your nearest Rite Aid and save.

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