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f, OPINION Mon., Aug. 29, 197S DAVID KRUtDENIER, Praifmt and Publisher KENNETH MACDONALD, Editor MfCHAEL GARTNER, Executive Editor LAUREN 80TH, Editorial Page Editor j. ROBERT HUDSON, Director of Marketing LOUIS H. MORRIS, Bu«in«»Afa»««r An Independent Newipaper THE REGISTER'S EDITORIALS Will inflation nip recovery? Ford administration officials and authoritative economic experts outside the government agree that economic recovery has begun. They agree further that the national product will continue to expand in the next year and unemployment will decline — but the latter not by much. Milton Friedman, the Chicago University economist who is an acknowledged monetary seer, reminds us that severe recessions, "such as we have just experienced," are followed by vigorous recoveries. Such a recovery, he says, "is virtually assured by highly expansive monetary and fiscal policies." Fifty-seven economists surveyed by J. A. Livingston, the financial writer, agree that output will rise in the year ending next spring. Fortune magazine puts its seal of approval on this forecast and adds, "It is hard to see anything going so wrong as to abort the recovery." Such confident predictions make us a little nervous in view of the record of economic predictions in recent years. We would be more assured of the promises about recovery if the latest report on prices by the Labor Department did not show a new burst of inflation. Will this unusual rise in prices stifle the recovery? Will it move the administration to renew its battle against inflation to the detriment of policies for full employment? ' Lots of attention has been given in discussion of inflation to the sale of grain to Russia and the probability of additional exports. But Secretary Earl Butz is clearly correct in saying that the effect of the Russian purchase so far will be minimal. Even another 5 or 10 million tons of grain exported would not add much to food costs. But to go much beyond that level of exports would be an inflationary factor, and might fuel speculation as in 1972-73, so the administration is wisely playing a cautious hand on this. The added cost of higher wheat prices in bakery products is negligible in total food cost. Higher feed grain'prices are more important, because they translate into higher meat and other livestock- product prices over a year's time. At first, the effect of higher feed costs could well be an Increase in marketing of cattle, with lower meat prices. But eventually, With less cattle feeding, prices would go up. But the significant prices to watch in relation to economic recovery are industrial costs, especially oil. The removal ef the $2 tariff on imported oil will tend to lower oil and oil-product prices, probably about 3 cents a gallon on gasoline. But if price control is removed from all domestic oil, as the president proposes to do, the tariff cut will be more than offset. Steel, autos and many other industrial items are going up in price. Albert Rees; former director of the Council on Wage and Price Stability, said that, contrary to experience in earlier severe recessions, "list prices of most industrial goods have not declined, and they are beginning to rise very early in the recovery." * * * Obviously, attempts to tighten money and fiscal policy to curb inflation would not curb these industrial prices. Such deflationary policy would not stop OPEC cartel oil prices from going up, either. But they could nip the economic recovery in the bud and put more people out of work by next year. That is the nature of the economic policy problem. Andrew. Brimmer, former member of the Federal Reserve Board, and Walter Heller, former chairman of the Council of Economic Advisers, are among the economists who think a stimulative fiscal-monetary policy is needed now despite the inflationary surge. They point out that the economy is operating at far below capacity. They believe the "inflation" is not a classic inflation, "too much money chasing too _ and semi-monopolistic price raising, such as in oil. These price boosts cannot be headed off by restricting credit and stopping the recovery. Yet the Ford administration ideological objection to price control and reliance on the "market" could create that result. Preserving integrity of ballot Polk County District Judge Wade Clarke has upheld an Iowa law prescribing special procedures for voting by persons confined to nursing homes and hospitals. The law was challenged by a group of Plymouth County residents trying to return Republican Lyle Stephens of LeMars to the Iowa House. Stephens was removed when the Democratic-controlled House settled a contested election by throwing out 125 absentee ballots from nursing homes. This gave the House seat to Democrat James Spradling of Orange City. Democrats on the committee which reviewed the election said the Plymouth County auditor acted illegally by mailing absentee ballots to nursing home residents instead of having them delivered by notaries representing the two political parties, as the law requires. Republicans called the violations a technicality. The plaintiffs in the court suit, who are expected to appeal to the state Supreme Court, argued that they were denied the, equal protection of the law because the Legislature had established two classes of citizens eligible to cast absentee ballots: those who receive and cast their ballots by mail and those whose ballots are delivered because they are in health-care facilities. Clarke pointed out that the special provisions applicable to nursing home residents were intended to prevent "fraudulent electioneering and the placing of duress upon persons casting absentee ballots." He termed this a legitimate objective of legislative responsibility. Charges of irregularities in distributing and counting absentee ballots of shut-ins and nursing home patients have cropped up periodically. In 1958 a legislative investigating committee reported evidence of questionable practices in handling absentee ballots. The Legislature reacted to the suspicions by setting up procedures that could preserve the integrity of the ballot box and protect individual voting rights of persons in health-care institutions. Judge Clarke wisely recognized this in his decision. Pardons for war objectors The Presidential Clemency Board has recommended unconditional pardons for 6,000 men who evaded the draft or deserted the armed forces during the Vietnam War. The pardon recommendations go to President Ford for final action. A similar number have been granted conditional pardons requiring public service work, usually for tliree months to a year with a charitable or health agency. Pleas for clemency from about 700 men were turned down. Board Chairman Charles Goodell said applications from about 4,000 await action before the board winds up its work in mid-September. The clemency board is responsible for reviewing the cases of those convicted of draft evasion or desertion. Unconvicted offenders had to apply for clearance through the Justice and Defense Departments. About 100,000 men who might have been eligible for one of the clemency programs did not contact the board. Goodell said, "Most have decided they're doing all right." They remain exiles, though. Ford's clemency offer, held out with the hope it would "bind up the nation's wounds'-' after U.S. withdrawal from Vietnam, fell short of expectations. The minimal response from most of those who fled to Canada and other countries was attributed to Ford's insistence that they must "work their way back to American society" by performing up to two years of alternate service. The clemency board seldom required as much as a year's work, and in half the cases recommended unconditional pardon . Goodell said many deserters "served valiantly in Vietnam and subsequently got into trouble when they came home." Most of the civilian cases "evidenced substantial conscientious objection to the war but were unable to obtain proper C.O. status." Many had applied for C.O. status before the Supreme Court ruled in 1970 that a conscientious objector to military service need not base his objection on religious belief to qualify for, draft exemption. Goodell said the board recommended outright pardons for those who objected specifically to the Vietnam War as well as for those opposed to war in general. Thus the board took cognizance of religious groups advocating selective conscientious objection, which would make non-pacifists eligible in certain circumstances. The clemency board's accounting of its work reflects a conciliatory attitude that might have attracted more ^ of America's estranged youth had the President lent his backing. But after making his offer conditional amnesty, Ford seemed to lose interest in "healing national wounds." Says decontrol means rise in oil, gas and coal prices By HOBART ROWEN WnMnftm Nit Ntw* itrvki Economist Miltsn Friedman says (in his Newsweek column, Aug. 25) that decontrol o! oil "will not produce a sharp immediate rise in the price of petroleum" Hid-"ultimately it will lower prices as the free market works its mag- Decontrol, accompanied by removal of the $2 oil tariff, need not cause, excessive shock to the economy. The pint can be assuaged by tax cuts and >aft easier, monetary policy to offset the higher costs of energy. But despite what Friedman And others say, be not deluded: decontrol means higher prices. Look at Mme simple arithmetic: If there is decontrol accompanied by a withdrawal of the $2 tariff, and no further OPEC price increase, the uniform price for oil will be about $12 a barrel instead of a weighted average now of $10. If OPEC raises prices $1.50 to $2 a barrel, the price for oil in the U.S. will run $13.50 to $14 instead of $10. Annual cost Without an OPEC price increase, Charles Schultze of the Broottngs Institution puts the annual cost of decontrol after the first year at $10 billion. With an OPEC price increase of $1.50, ther bopsted~«ieTgjrbill-would be $22 billion. (And, of course, OPEC might raise the ante even mere). The Federal Energy Administration calculates that the net cost of decontrol will be $5 to $6 billion a year, or only 3 cents a gallon at the gas pump. But unlike Schultze, or Lawrence Knm- ins of the Library of Congress, FEA Deputy Administrator Eric Zausner jnakei-the.optimistic_assumption__that coal and natural gas prices will not move up sympathetically with crude oil. Why not? Zausner told me that coal and natural gas would not Jump in price because they are competitive with residual oil (used In Industry and power plants). And residual oil, he asserted, is already at the market pri*»,and therefore won't go up with decontrol. In fact, with Import duties off, ZausiMr says, the price of residual oil should go down. Schultze and Kumins, working independently, flatly contradict tli basic underpinning of the administration case for decontrol. They note what seems to be an unarguable fact, namely that half of the residual oil supply is produced reduction would have been 7 cents a gallon. , First, the courts seem to be in the process of eliminating the $2 tariff; that would cut 3 cents a gallon from the price. .But there is another 4 cents in a onetime "pass-through" the companies have been charging. During the embargo, they were allowed to "bank" increased costs for ~all the oil they could lay their jhands on, including some very high-priced purchases. These extraordinary costs, reputedly amounting to a total of about ft billion, have been paid by the publio since Jan, J at the ivent per gallot rate. ,-.•<•" _:;.4~i.... ;• Ford's offer • Once decontrol is a fact, the energy industry and OPEC will have unlimited power to set prices. Congressional Democrats made a Wg mistake In rejecting Ford's last compromise offer, which would have put an $11.50 lid on U.S. oH prices, no matter what OPEC did. domestically, and thatSO per ceni^of Schultze-makes-an-interesting sugges- "-•"-"•• - tion. Once prices are decontrolled, Congress might consider a simple-two-year ceiling on domestic oil at $11.50 with a 5- cent a month escalation. That would mean that an OPEC price rise over $11.50 would affect only the import share of the market. An $11.50 lid is better than nothing, and certainly liberal enough as an Inducement to expansion. that half is based on the $5.25 price of "old" oil. -77 So, coal gal and all energy prices w1U go up as oil goes up - not necessarily dollar for dollar, but significaipfc :'•'., One important, if intricate; .point brought out by Kumlns should be understood by all: If controls had stayed on, oil prices at some point this year would have dropped. In terms of gasoline; the Concealing news sources: game stacked against the public? By CHARLES SEIB WMhlnflfan 1»Mt Ntw» itrvlet H en r y Kissinger's resumption of shuttle diplomacy brings another round of the most entertaining deception post- Watergate Washington has to offer. As Kissinger flits from country to country in search of peace for the Mideast, at his side is the "senior official on Kissinger's plane" — a pudgy, owlish, talkative gent with a gutteral voice and a German accent. He is perhaps the most famous example of the corrcealed"sourcerthe-devicer-by-which- the press hides from its 'readers the sources of information it publishes and broadcasts. Kissinger's fictional "senior official" has just about outlived his usefulness. Nearly everyone who follows foreign news must know by now that when the S.O. speaks it is with the voice of H. K. Nevertheless he is being kept on because, a Kissinger aide says, he still has some use in the diplomatic minuets in which governments engage. And aside from giving a slightly ridiculous twist to Kissinger's press relations, he does no real harm. But what he represents — the concealment of news sources — Is a serious matter. It is a game stacked against the public. The press and the insiders usually know who is leaking what ("Deep Throat" of Watergate fame being an outstanding exception). Only the customers are kept in the dark. A few decades ago, the "informed source" and the unnamed "high official" were rare birds. But today these shy but knowledgeable fellows are everywhere. The air over Washington is often thick with their trial balloons. Sometimes they officiate at back- grounders at which 10 or 20 or a hundred reporters, join in a conspiracy to conceal who is talking. Other times they deal privately with individual reporters. Complicated rules and a special jargon - "not for attribution," "off the record," "background," "deep background" — have evolved around them. Hugh M. Culbertson, professor of journalism at Ohio University, recently studied the use of unnamed sources for the American Newspaper Publishers Association. He analyzed more than 5,000 news Charles Seib writes a column Of criticism of the media for the Washington Post. LITTERS stories published by 12 papers of varying sizes and found that nearly 2,000 of them — 36 per cent — contained at least -one such source. Culbertson's sampling also showed that the bigger and more prestigious the newspaper, the more it used unnamed sources. The New York Times and the Washington Post used them in 54 per cent of their stories during the period studied. Four other large newspapers used them in 36 per cent of their stories. But six small dailies used them in only 30 per cent. The Culbertson study indicates that perhaps one-third of the news stories read by the American public rely wflolly or in part on sources known to the reporter, and perhaps his editors, but not to the reader. The proportion probably is smaller for the electronic media since they do less investigative and in-depth reporting. Reporters and editors should protest every backgrounder at which a public official holds forth but refuses to be identified. They should avoid being used to float trial balloons or to air anonymous charges against named individuals. The rule should be that no story of consequence will be published if its relies on a single unnamed source; at least two independent sources should be required. The Washington Post followed such a rule in its very accurate reporting on Watergate. Even though a source is not identified by name, his or her official connection should be disclosed. If a story is about detente, it makes a difference whether the source Is in the Pentagon or the State Department. One of the tenets of the news business is that once a reporter agrees that a source will not be named, that agreement is honored, come hell or high water. A number of journalists have gone to jail for refusing to disclose sources, and their colleagues are rightly proud of them. But suppose published information from an .unnamed source turns out to be false qr is denied by responsible persons who are willing to be named. Should the reporter then disclose the source so the public can make its judgment? Edward J. Epstein, a journalist and media critic, and Jack Nelson, a Washington investigative reporter, recently considered that question. Epstein argued for disclosure. "Who is the client of newspapers?' 1 he asked. "Is it the public or is it the source?" Nelson replied that disclosure "really would dry up sources." He added: "That's the only way we can get information in the government — to have confidential sources." Most newspaper people would agree with Nelson that confidential sources are necessary and that disclosure would be certain to turn them off. Nevertheless, Epstein's question — "Who is the client?" — is worth serious thought. It has, in fact, a validity that goes to all aspects of the news business, and it should be posted in every newsroom. Election laws and burdens of reform By JAMES J. KILPATRICK W«thln«ten Stir Syndicate "We know no spectacle so ridiculous," Lord Macaulay once observed, "as the British public in one of his periodical fits of morality." In this matter of election reform, we're getting a little ridiculous ourselves. In the waves of morality generated by the Watergate typhoon, Congress embarked upon a massive course of reform. The law that became effective in January puts limits on campaign spending and limits on campaign contributions; it provides for tax subsidies to presidential candidates and to national party conventions; it creates crimes punishable by up to five years in prison. Administration of the law is in the hands of a six-member Federal Election Commission. Its annual operating expenses are budgeted at $5 million. Under the law, federal officeholders, candidates and political committees may request advisory opinions from the com- mission on the legality of various contributions and expenditures. One such request came from Senator Lloyd Bentsen (Dem., Tex.). He had been invited to make a luncheon speech for a chamber of commerce in New York, and the chamber had offered "to pay from its general treasury travel expenses for the senator and Mrs. Bentsen. "Would this be permissible?" No. Other inquiries involve the most tedious details of accounting and book- eeping. What is the status of a candidate who is unopposed in his congressional primary? Can a non-profit incorporated association, such as the Veterans ol Foreign Wars, pay travel expenses for a presidential candidate who speaks at a VFW meeting? Now, the object of all this activity is to achieve purity, or at least the image of purity, in our federal elections. It is a noble object. I don't mean to knock it. But the more one wades through the swamps of election reform, the more one is minded to ask: Is all this regulation truly necessary? Will it accom- plish the desired end, or will it result in creating traps, snares and pitfalls for the honest but unwary candidate? Bo Callaway, campaign manager for President 'Ford, expects to hire accountants by the platoon before the campaign is over. Every expenditure, no matter how petty, will have to be meticulously recorded. Thus far, the reform act has survived constitutional challenge. The U. S. Court of Appeals -for the District of Columbia recently rejected the suit brought by Senator James L. Buckley of New York and by former Senator Eugene McCarthy, but the two plaintiffs will appeal. On the surface, they appear to have a good case, but it will be months before the Supreme Court can act. Meanwhile, the nitpicking goes on; file drawers fill up; duplicating machines grind on day and night. The person who contemplates federal office must first contemplate a bookkeeping burden of fearful complexity. Maybe these requirements will revive the image of purity. More likely, we will find nitf campaigns strangled in red tape. Regents 9 bond financing To the Editor: In a letter from former State Representative Edgar Holden (Rep., Davenport) published Aug. 8, some confusion exists concerning two types of bonds issued by the State Board of Regents. Bonds sold to provide construction funds for dormitories and other self- liquidating structures, such as the Iowa Memorial Union, must by law be repaid by revenues from those structures, and in some cases from special Increments of the total university fee paid by each student over a period of years. The State of Iowa has absolutely no obligation toward repayment of these bonds,, and in fact no state dollar has ever been used for that purpose. This is also true of the bond issue which finances the North Tower addition to the University Hospitals and Clinics now under construction. The several bond issues sold to provide construction funds for classroom, laboratory, library and office structures ;; are financed through a different proce* dure. To achieve the best possible interest rate, student tuitions are pledged as the primary basis for their repayment. However, in authorizing the Regents to sell such bonds, the 63rd General As- Readers are invited to submit letters for publication to the Open Forum Editor, Des Molnes Register, Des Monies, la. 50304. Complete names and ad- < dresses are required. The editor reserves the right to shorten letters. Letters will not be returned. sembly provided an appropriation specifically for the purpose of replacing funds used for debt-service charges on ' the bonds, and there was general agreement that this procedure should be fol-. lowed in the, future. N Subsequent sessions of the Legislature have voted similar appropriations, and . it may be assumed that requests for . such appropriations will continue to be partyOf the Regents' legislative askings until the bonds are retired. Should the Legislature ever decline to make the < appropriation, bond payments must by .. law be met from tuition funds. The State of Iowa has no legal obligation for their repayment. Appropriations for debt service on these academic building bonds shouKTbyr no means be thought of as "deficiency appropriations." The bonds were issued, '. and .repayment planned, on exactly this basis, and hot until legality of the bonding had been upheld through the Supreme Court of Iowa. Moreover, by authorizing such bonds and by appropriating funds to replace tuition income used for the debt service - JheregntJhe General Assembly has provided a great educational bargain for all < lowans. Learning space was made available when it was most needed and coni structed while costs were considerably lower than "they are now or are likely to be in the future, and these costs aro being repaid gradually with dollars which are increasingly cheaper. The General Assembly should be commended for its vision in authorizing such a bonding program. — Mary Louise Pe- - tersen, president, State Board of Regents, Grimes Bldg., Des Moines 50319. .Moral and legal responsibilities To the Editor: Regarding State Representative' Gregory Cusack's Aug. 20 letter at-' tempting to justify tfie difference between /'moral and legal" responsibility: Among honest men a "moral" responsibility is as binding as a "legal" responsibility. Only among lawyers and the unethical is' there much distinction./ Perhaps here is the root of many of our current problems; we have allowed ourselves to be dominated by people who do things that have an obvious intent, but by crossing the T's and dotting the I's can be made into something else legally Ted Cowen, 2603 Avalon Drive, Bettendorf, la. 52722. Disliked review To the Editor: James Healey's review of the Ronnio Millsap-Tanya Tucker concert [Register, Aug. 21] left me wondering if he and I attended the same event. It seemed odd to me that Healey should heap so much praise upon Tucker's back-up band, while ignoring the fact that they continually drowned out Tucker's voice. If one likes to see the featured performer upstaged, fine, but I came to see Tanya Tucker, not somo second-rate bar band from Chicago. • Healey's brief dismissal of Ronnio Milisap also seemed a bit unfair. His review left the impression that Milisap is another Bill Anderson, which is highly inaccurate. Milisap displayed a fine, full-bodied voice which contained little if any "standard truckstop twang." His singing, as well as his fine keyboard work, deserved to be commended. Now I'm no raving country music fan. Far from it. But I recognize a successful performance when I hear one. And I appreciate a well-thought-out review. Healey's snide remarks not only indicate that he didn't think out his review clearly but that he really didn't understand what he was writing about. As punishment, he should see the film "Nashville" 20 times. — Richard An- gorge. 4119 Lower Beaver Rd., Dei Moines, la.