Klutznick Says Confidence Key to Economic Growth

The United States must overcome a lack of confidence and harness its many strengths to produce quality goods for trade in international markets, Phillip Klutznick, secretary of commerce in the Carter administration, told an audience of about 80 at a panel discussion at the Kennedy School forum last night.

Respondents to his presentation on the nation's economic problems were Sen. William Roth (R-Del.), co-author of the controversial Kemp-Roth tax-cut package and chairman of the Senate government affairs committee, and Ezra Vogel, professor of Sociology and an expert on East Asian trade.

The Tears

Klutznick expressed optimism that the U.S. could overcome the negative attitude stemming from its recent economic difficulties. "Unemployment set in, and inflation rose. Everybody started crying. They cried so much, that we overlooked our strengths," he said.

The nation has advantages that no other can match--in its territory, its population, and resources--all of which should be applied to help industries to compete in foreign markets as well as at home, Klutznick added.

He also said that the country must overcome the adversarial relationship that exists between certain groups, hindering the cooperation necessary to attack its economic problems. "we have to cut out this plain silly notion that the government is our enemy," he said.

Klutznick criticized the emphasis that many policy-makers have placed on the nation's budget concerns, saying that often government funds can be used productively to improve competitiveness.

Confidence Needed

Roth agreed with Klutznick's belief that the solution to the United States' competitive difficulties was a change in attitude from its present lack of confidence and the inability to cooperate and make decisions effectively.

The senator added that policy-makers should focus on promoting growth and increasing productivity, while also improving the nation's ability to trade and market products in foreign countries.

Vogel was the only one of the three panelists to express pessimism over the U.S. public's ability to recognize and respond to the depth of the challenge posed by Japanese economic power on the U.S.'s position in the world. He cited Japan's recent surge in shipping and in the semi-conductor industry as examples of its increasing preeminence.

He also mentioned Japan's superiority in information gathering, its success in turning out qualified electrical engineers--40 per cent more than the U.S. with about half the population--and the incomparable success of Japanese students in mathematics and science competitions.

Too Many Lawyers

A member of the audience asked the panel how the U.S. could overcome not only the shortage of engineers that Vogel referred to, but also its excess of lawyers, which he called, "not only unproductive, but literally counteractive."

Klutznick responded that the large number of lawyers in American society signified an important problem, the necessity for adversarial relations.

He added that the U.S. could improve the competitiveness of its economy, but only within the limits of its national character, saying that the American people would not want to become like West Germany or Japan.