Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, November 18, 1993 TAG: 9312100285
SECTION: EDITORIAL PAGE: A21 EDITION: METRO
SOURCE: Ray L. Garland
DATELINE: LENGTH: Long
Mass communications without mass comprehension is a dangerous thing. The media accentuates the negative while liberal and conservative politicians offer competing nostrums for what ails us. Situated in the lovely rolling hills of the Virginia Piedmont, where everything seems for the best in the best of all possible worlds, it may be presumptuous to offer palliatives, but here goes.
The American market, embracing 250 million people in 3.6 million square miles, is undoubtedly the world's most efficient. But competition is so relentless that only the strong survive. The good part is that the prices of consumer goods relative to wages are lower here than any place I know. That might explain why those foreigners enjoying statistically higher incomes (when local currencies are converted into dollars) marvel at the apparent prosperity of ordinary Americans.
The German economic "miracle" used to be held up as evidence the United States can no longer cut the mustard. But a recent German government report tells a different story. It pointed out that spending by all levels of government in Germany now exceeds 50 percent of gross domestic product! That compares with 35 percent in the United States.
Germany, which has one of the lowest birth rates in the world, levies a 19 percent tax on salaries to fund its generous national pension scheme. By the year 2030, they predict, there will be one pensioner for every worker. That compares with an American Social Security tax of 15.3 percent and a projected two workers supporting each retiree in the year 2030.
While such differences may seem trifling, they will cast a long shadow, and may explain why so many German manufacturers are looking to locate here. The Japanese, often accused of practicing predatory trade, will build 2 million vehicles in this country in 1993.
Dissatisfaction is endemic in all major industrialized nations. The Canadian Conservative Party, which had governed for nine years, was all but obliterated in recent parliamentary elections. Ditto for French Socialists. Prime Minister John Major has the lowest approval rating of any British leader since the inception of opinion polling. Chancellor Helmut Kohl, who was hailed as a hero when he presided over the reunification of Germany in 1991, is regularly pelted with eggs and abuse, and few hazard a guess as to what will be left standing when national elections are held next year.
Here at home, President Clinton is greeted with cries of jubilation whenever he offers a new, painless panacea in a televised address to Congress. But let a few weeks pass and the jubilation is replaced with jeers. In between, voters take what chances they get, as in the Virginia governor's race, to stick it to the status quo. Searching for commiseration, Clinton might call George Bush, who surely knows the truth of the iron law of politics: "What have you done for me lately?"
The answer would seem to be: Get used to rancor and instability, it will be with us for some time. Why? Well, a short answer might be that the modern, secular, socialist state, having aspired to take the place of church and family, has assumed tasks that are simply beyond its powers.
The deficit is for the moment yesterday's breakfast. But if everything follows the script laid out in Clinton's plan, the deficit is still projected at $1.2 trillion for 1994-98. Without spending the Social Security surplus, which is supposed to fund pensions for baby boomers, it would be closer to $1.7 trillion.
A bipartisan coalition is pushing for additional cuts in federal spending, but Clinton isn't buying. Treasury Secretary Lloyd Bentsen, fresh from urging the Japanese to cut taxes to stimulate growth, said that more deficit reduction might slip the nation back into recession. For all I know, he's right. But these enormous borrowings, including the main retirement savings of most American workers, indicate the strains imposed by the insatiable demands of the welfare state. And our problems are mild compared to some others.
We see the fallout in myriad ways. A recent report from the Bureau of Labor Statistics said that nearly 9 million people can't find jobs. But those who have jobs are putting in the most overtime since the government started keeping records on it. That is, companies seeking ways to trim costs find paying time- and-a-half cheaper than new hires. We might find one explanation in a host of new employer mandates, such as the Americans With Disabilities Act. These have imposed such a threat of litigation as to cause companies to go to great lengths to avoid adding workers.
And to make their paychecks stretch, Americans are seeking out the lowest price with a relentless fervor. Small retailers are being driven to the wall while even large companies retreat. The old network of wholesalers has been decimated, and many small dealers find they can buy it cheaper at a wholesale "club" than they can direct from the manufacturer.
How many new independent druggists, hardware stores or grocers have you seen open up lately? The super stores thrive by squeezing prices all the way back to the factory floor. Even giants like Proctor & Gamble have been compelled to deal on their terms. When you see a company as old as Rose's, with 215 stores, taking bankruptcy, you know how rough things are. The pattern is confirmed when you see venerable retailers like Standard Drug of Richmond or Heironimus of Roanoke selling out.
We are a people with a nostalgia for a simpler past, call it kinder and gentler, rushing forward to grasp an ever more complex and ruthless future. It pays to accept the choices we've made and realize there's seldom any going back. National nervous breakdowns are messy things and should be avoided. Insofar as there is one, the cure lies in greater realism. We might begin by recognizing that you can break a big store. But when it comes to riding out storms, our national reserves of strength are far superior.
\ Ray L. Garland is a Roanoke Times & World-News columnist.
by CNB