| TRICKLE-UP
ECONOMICS: JR GOES TO WASHINGTON |
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The original ‘J R’ burst on
the scene in a novel in 1975, an unkempt 11-year-old whose penny stock and
defaulted bond operations blossomed into a vast and perilous financial
empire through his simple creed of “get all you can” by obeying the
letter of the law and evading its spirit at every turn. What has become
of him in the 12 years since? The scene is a recent Congressional hearing
on the Federal budget. Chairman: In the absence of the Director of the White House Office of Management and Budget, who is occupied with, ahem, who is at the Government facility at Allenwood writing his memoirs, we are fortunate in having before us his Deputy Assistant in the overall policy area, Mr. J R Van. . . . J R: Excuse me Mr. Chairman, could I make a state-. . . . Chairman: Now I am pleased to recognize our ranking Republican member, Mr. Pecci. Pecci: Thank you Mr. Chairman. In view of the momentous task before this committee, let us proceed directly to matters at hand. As a former President of our great nation once observed, when many people are out of work, unemployment results. In this area of vital concern to the American people let me cite an article in a current newsmagazine, which states that Administration policy advocates, I quote, “carelessness, sloppiness and widespread incompetence in general on the part of management and work force alike are essential to sustaining our economy in these difficult times.” I should like the witness to share with us the benefit of his thinking on this matter. J R: Okay that’s what I, see this here policy we advocate is that we advocate full employment. Pecci: Then I’m correct in finding these liberal press allegations without foundation, and that of course in the Great American tradition of competitive skills in the free marketplace. . . . J R: No but see that’s exackly what I don’t mean, let me collaborate on that a second okay? See how it works is. . . . Chairman: May I point out that this same article notes that we have the poorest literacy record of all the industrial nations, that 29 million adults can’t read a newspaper headline, a third don’t know when Columbus landed and. . . . J R: Okay look Mr. Chairman that’s just what I’m coming to. Like you start off with all these here schoolteachers? I mean right at the start they were always getting paid worse than anybody. So you create this second-class profession you get second-class people, so now you get all these pupils which can’t hardly read so they have these here remedial reading programs. See if these teachers got it right in the first place then all these remedial teachers would be out of work which that’s what we call this ripple effect, where each new job creates like three more new ones. That’s how it works. I mean this last five years of this Administration the economy has generated 13.5 million new jobs, so. . . . Chairman: May I point out to the witness that two millon well-paying manufacturing jobs have also been lost, and that most of these new jobs have been generated in the low-paying service sector, half of them below the poverty line where . . . J R: So they don’t hardly pay taxes anyway, right? See mainly we’re concentrating on these hard-working Americans which are shouldering the tax burden for everybody else. Like all these here second-opinion doctors and these lawyers where product-liability lawsuits are up 1,000 percent in 10 years. I mean already this year eight million cars were recalled where if we got these Soviet mechanics to Detroit. . . . Pecci: Mr. Chairman, I think we might proceed on to other aspects of the. . . . J R: Right. We can proceed on to the Defense Department where this here ripple effect really gets going. See at this here point in time there’s like 30,000 companies in military production where the military signs 52,000 contracts every day. I mean you take these old historical times like at Rome and all where these armies and navies went out and conquered everybody to make them pay all these taxes to support everybody at home, right? Where they could just hang around in these here togas and talk about philosophy and all? So now it’s exackly backwards. Now everybody at home has to work to support the military. I mean this biggest military budget in history where we’re not even having a war yet, so the Pentagon wants like $1.8 trillion over this next five years I mean where will they get it? See so that’s these priorities where you cut out all this big Government spending at home so this tax money can go where they need it. Like you take this $336 million for medical care and housing for all these here veterans left over from the last war, only we’re talking about the next one, so for the same money you get to buy 220 Phoenix air-to-air missiles, right? See mainly like a third of these here reforms we’re proposing are in these low-income programs which aren’t hardly cost effective taxwise, like cutting these inflation adjustments for Social Security where all these here old people are piling up on us? Like where just in 1985 we spent this $100.9 billion on Medicare and Medicaid, we can save like $90 billion this next five years to pay for some big-ticket items like this $28 billion B-1 bomber program and these 100 MX. . . . Chairman: I should like to get back to square one, and we might observe in passing that in 17 recent MX missile tests only five were equipped with production model guidance systems, and of those five only three hit within the target zone, and so. . . . J R: No but look Mr. Chairman we’re still on square one. Like this B-1 bomber which it’s 40 tons overweight so it shakes all over and couldn’t hardly hit its target even if it gets there which they’re not sure of that too. See how it works is you get all these used generals and admirals with these big pensions where they’re used to these free haircuts and doctors and all, so they join these here big defense contractors to help think up these new projects for how to spend this here $300 million a day with these old buddies which are still stuck at the Pentagon, right? So they figure up like this here Bradley troop vehicle for $1.7 million each and this Sgt. York gun which costs $1.8 billion before they junked it? See so every new project like creates all these new jobs which degenerate like 100 more trying to rescue it, and. . . . Pecci: I must object to the witness’s prolonged emphasis on the unforeseen difficulties encountered by the Defense Department in its momentous task of safeguarding the American people, and his failure to mention those who have called our attention to certain irregularities in the procurement process. J R: No but holy, I mean that’s exackly what I’m doing! I mean these here whistle blowers you think somebody wants to hire one after he blew the whistle? Like his real job is making this guy above him look good to the guy above him right up to the top, right? So I mean who wants him screwing everything up before it even happens. So look. I mean here’s this here whole S.D.I. thing where they figure like six bil-, wait where’s the dot, I mean $60 billion to deploy it by 1994 if we’re all still around then, right? I mean where all these very top scientists are saying it won’t work even if it works? See so where way back in 1984 they had like 5,000 engineers and scientists which this year should go to 20,000. Where they’re figuring out how they’re going to figure out all this here software which degenerates all this more software, you’ll get this here ripple effect going where you’re going to get a lot more than a couple of busted O-rings. I mean each of these here 20,000 new jobs should degenerate like 50 new ones just cleaning things up, okay? Chairman: Yes, well, not exactly okay and may
I interrupt the witness to observe that the approach he has presented so
eloquently might serve as a recipe for a return to double-digit inflation? J R: So that’s where you need these cheap inflation dollars so everybody can pay everybody back, right? See we had this neat idea of this here trickle down theory only it didn’t work out so good, I mean it all like got stuck at the top where 15 years ago this richest 1 percent of the nation held 27 percent of the wealth now they’ve got almost 36 percent, I mean it mostly like trickled up. And see where the Administration’s goal was to end inflation it worked so good that this sudden massive collapse of it brought these terrific budget deficits so like now we’re this world’s biggest debtor nation where if these here Japanese weren’t like buying $60 billion in Treasury bonds a year we couldn’t hardly pay the gas bill, right? Chairman: We may observe that these bonds represent future obligations of massive proportions. In fact it appears that while we are expending vast sums to arm the nation against the Russians, we are meanwhile selling it to the Japanese, and I believe the Chair is authorized to go into closed sessions on these matters. We wish to thank the witness and hope he will return to share his thinking with us on our $160 billion trade deficit and other related. . . J R: Anytime. I mean we’ll burn those bridges when we come to them, right? William
Gaddis’s most recent novel is Carpenter’s Gothic. His novel J
R won the National Book Award in 1976. |
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New York Times, October 25, 1987 |
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