Tape 50 - The Wall Street situation
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- | Hello and welcome again, as professor Paul Samuelson | 0:02 |
of MIT discusses the current economic scene. | 0:04 | |
This series is recorded for | 0:07 | |
Instructional Dynamics Incorporated, | 0:09 | |
on May 15, 1970. | 0:11 | |
Professor Samuelson, I would guess that in view | 0:13 | |
of recent developments on Wall Street, | 0:15 | |
that's one of the topics you'll be discussing today. | 0:17 | |
- | Everybody is interested and concerned | 0:19 |
with the drop in stock market values. | 0:23 | |
I've just been amazed at how my telephone | 0:25 | |
has been ringing from the Associated Press | 0:28 | |
and the Canadian Broadcasting Company | 0:30 | |
and from one place or another, | 0:32 | |
asking for comments on the stock market. | 0:35 | |
I wish it were the case that when unemployment becomes high, | 0:38 | |
much too high, that there was the same | 0:42 | |
instantaneous concern everywhere. | 0:44 | |
Moreover, I would say that the man in the street | 0:47 | |
is himself concerned. | 0:50 | |
I've also noticed that at every cocktail party, | 0:52 | |
for the first time in recent weeks, | 0:56 | |
people are speaking about their stock market losses | 1:00 | |
and they're saying Professor Samuelson, | 1:03 | |
you are an economist, sometimes they say this accusingly, | 1:05 | |
what's the story on the stock market? | 1:09 | |
So naturally, as the news is breaking, | 1:12 | |
this is number one topic to talk about. | 1:15 | |
Let me review the situation. | 1:19 | |
First, the DOW-Jones index of 30 representative stocks, | 1:24 | |
as I am now talking, is below 700. | 1:31 | |
In 1966 and again, I guess, in 1968, | 1:37 | |
it just about touched 1000. | 1:41 | |
This means that 30% of market value | 1:45 | |
has been lopped off those stocks. | 1:49 | |
The same story is told if you look at more comprehensive | 1:52 | |
index numbers of stock prices, | 1:55 | |
and to make a long story short, | 1:58 | |
when we take into account the awful beating | 2:00 | |
that has been taking place on the American Stock Exchange, | 2:03 | |
when we take into account the drastic declines | 2:05 | |
that not everybody has noticed on the 10000 stocks | 2:08 | |
which are quoted in the over the counter market. | 2:11 | |
That's the market that's made by telephone every day. | 2:14 | |
When we take all that into account, | 2:17 | |
we must arrive at the conclusion | 2:19 | |
that something like a quarter of a trillion dollars | 2:21 | |
of net worth has gone down the drain, has disappeared | 2:24 | |
from the balance sheets of the American people. | 2:28 | |
In real terms the loss is something more than that, | 2:34 | |
because of course the prices are rising, | 2:37 | |
so what people feel they can buy | 2:40 | |
with the net worth that's left to them | 2:42 | |
is definitely down. | 2:45 | |
Many people remember the stock market crash of 1929. | 2:49 | |
They don't remember it, they've heard about it. | 2:54 | |
They also know that the years from 1929 to 1933 | 2:56 | |
were very grim years. | 3:02 | |
Indeed, it was not until 1939 and World War II itself | 3:04 | |
that the American economy recovered | 3:09 | |
from one of the greatest slumps in its history, | 3:10 | |
The Great Depression. | 3:13 | |
And so many people revert to the view that was popular | 3:15 | |
during those days, | 3:20 | |
namely that Black Thursday on October 29th, | 3:22 | |
ended an era, | 3:29 | |
and itself was the cause or the proximate cause | 3:30 | |
of the The Great Depression that followed. | 3:35 | |
Therefore I am asked, Professor Samuelson, | 3:38 | |
does this drop in stock market prices | 3:40 | |
mean that the American economy is going into crisis | 3:43 | |
and that we shall have a great depression? | 3:47 | |
My answer is I don't think so, | 3:52 | |
but more interesting than my answer | 3:55 | |
will by my attempt to give you the reasons why. | 3:57 | |
Let's make no mistake about it, | 4:04 | |
these losses have been large, they've been serious. | 4:07 | |
You have friends who've been very hard hit by them, | 4:09 | |
if you yourself have not been. | 4:12 | |
If you own your stocks outright, | 4:15 | |
the loss will seem to you mainly psychological, | 4:16 | |
but those stocks may have been accumulated | 4:20 | |
to send your boy to college. | 4:22 | |
If your brother-in-law borrowed money in order | 4:23 | |
to buy stocks, he may actually be in bankruptcy. | 4:27 | |
Same thing is true about a number of large financial firms. | 4:32 | |
Part of the inventory of business, | 4:37 | |
that a large Wall Street firm has, | 4:40 | |
is its inventory of stocks, | 4:43 | |
just as a haberdasher must have inventory | 4:45 | |
of ties and neckties in order to be able | 4:47 | |
to serve his customers, | 4:49 | |
so it is inescapable that a large house | 4:50 | |
that deals in the over the counter market | 4:56 | |
which takes positions in the actively traded stocks | 4:58 | |
so that it can accommodate large institutional | 5:03 | |
buyers and sellers, | 5:06 | |
it holds an inventory of common stocks. | 5:08 | |
What happens if you're holding inventory | 5:12 | |
at a time when prices are falling? | 5:14 | |
You know what the answer is. | 5:16 | |
You are taking a terrible beating in your earning statement, | 5:18 | |
in your statement of profit and loss, | 5:20 | |
and in your balance sheet. | 5:22 | |
And as a matter of fact, if your assets decline | 5:24 | |
and your liabilities stay the same, | 5:27 | |
you may find yourself actually bankrupt. | 5:30 | |
So it would be no surprise if there were a number | 5:33 | |
of prominent Wall Street member firms | 5:37 | |
which went into bankruptcy. | 5:40 | |
We already had Ira Haupt and Company, | 5:43 | |
which went into I suppose receivership or bankruptcy. | 5:45 | |
That was because of a scandal connected with soybean oil. | 5:48 | |
Nobody lost any money, that is no customer of the firm, | 5:54 | |
because the stock exchange ponied up a defense fund | 5:56 | |
to bail out such people. | 6:02 | |
And one can confidently predict | 6:05 | |
that if one or two or three substantial | 6:07 | |
Wall Street member firms should go into bankruptcy | 6:11 | |
that the rest of the 1333 members of that exclusive club | 6:15 | |
will assess themselves to raise a fund | 6:22 | |
so that no customer will lose money | 6:26 | |
in consequence of that bankruptcy. | 6:30 | |
However the knowing person will say that works very well, | 6:33 | |
if because of some peculiar stupidity | 6:36 | |
of one or two or a few firms, they go broke. | 6:39 | |
That protects against dishonesty, | 6:42 | |
that protects against fraud, | 6:44 | |
that protects against extraordinary stupidity, | 6:46 | |
but what happens if the whole American economy goes to hell | 6:49 | |
and the DOW Jones average plunges to 400 or 300 | 6:53 | |
or if we should use the example of the decline | 6:59 | |
in stock prices from 1929 at the top to the bottom in 1933, | 7:02 | |
I suppose that more than 80% of all values, | 7:09 | |
and so we should be talking here | 7:13 | |
of a DOW Jones index of 190. | 7:15 | |
When that happens, won't substantially, | 7:18 | |
all of the 1300 members of the stock exchange, | 7:23 | |
be busted and in no position to bail out the others? | 7:26 | |
The answer to that I think is simple. | 7:33 | |
It's true. | 7:34 | |
A decline of that magnitude could not be handled | 7:37 | |
by the private resources of the people | 7:40 | |
who are involved in the debacle. | 7:43 | |
I suppose that at that point and in some degree, | 7:46 | |
in the modern welfare state, the modern mixed economy, | 7:50 | |
we would see some Reconstruction Finance Corporation | 7:54 | |
kinds of activities, | 7:58 | |
and who knows, if that happened, | 7:59 | |
and let me say now, | 8:03 | |
just so that nobody be alarmed, | 8:04 | |
the probability of that happening, | 8:07 | |
I regard as minuscule, | 8:10 | |
but if it should happen, | 8:12 | |
we might come out of that period with a new era, | 8:13 | |
in which the government is in the act, | 8:16 | |
and just as we have a guarantee of the FDIC, | 8:19 | |
that's the Federal Deposit Insurance Corporation, | 8:22 | |
which now as a government corporation, makes provision | 8:26 | |
so that no depositor in a commercial bank | 8:30 | |
will lose because of its bank failure | 8:33 | |
or even because of widespread bank failures | 8:36 | |
all over the country. | 8:39 | |
So you might have a federal equity insurance corporation | 8:40 | |
which insures stockholders against | 8:45 | |
a certain measure of loss. | 8:49 | |
I say a certain measure of loss | 8:52 | |
because obviously when you're dealing with something | 8:53 | |
like equities, there's got to be a up and down, | 8:55 | |
and if the government could insure you against | 8:58 | |
all loss in equities, in effect, the government | 9:01 | |
would be the equity owner. | 9:03 | |
Short of that, there are also some things that could be done | 9:06 | |
and since there's been so little comment on them | 9:09 | |
in our press, I perhaps owe it to my subscribers | 9:11 | |
to make mention of them. | 9:15 | |
The Japanese stock market took an awful beating | 9:17 | |
a few years ago. | 9:20 | |
Every housewife in Japan had become persuaded | 9:24 | |
of the merits of mutual funds. | 9:27 | |
These were sold on a penny basis, | 9:30 | |
I should say a yen basis, door to door. | 9:32 | |
Some politically minded people in Japan | 9:37 | |
thought that was a way of making the country conservative. | 9:39 | |
If the wife is stashing away a few yen in mutual funds, | 9:41 | |
won't she have influence upon her husband | 9:47 | |
not to vote for the socialist party? | 9:51 | |
I don't know whether it's worked out that way, | 9:54 | |
it is true that the rapid growth pattern of Japan | 9:55 | |
has led to a prosperity which has been accompanied | 9:58 | |
by successful elections by the, | 10:02 | |
I guess we could call it the conservative party, | 10:07 | |
although that's not its name, of course. | 10:09 | |
Not conservative by our standards. | 10:12 | |
Senator Goldwater would not care for the conservative party | 10:14 | |
of Japan, nor would the John Birch society, | 10:17 | |
nor would the strong exponents of a laissez-faire, | 10:21 | |
free economy. | 10:25 | |
Well, what do you do when the prices are dropping, | 10:27 | |
and if I can remember, the DOW Jones Tokyo, so called, | 10:33 | |
index, dropped from 1800 to below 1200. | 10:37 | |
That would be like our index dropping, | 10:42 | |
18, 12, by a third, that would be, | 10:47 | |
well that isn't so different from our index | 10:50 | |
having dropped to between 600 and 700. | 10:53 | |
To keep it from dropping further however, | 10:57 | |
the Japanese government set up a governmental agency | 11:00 | |
charged with the job of supporting the stock market | 11:05 | |
by buying in stock. | 11:10 | |
I suppose the ultimate capital credit for the operation | 11:12 | |
came from the central bank, the Bank of Japan. | 11:16 | |
And so that could conceivably come to pass in this country. | 11:22 | |
We don't see president Nixon, who seems to be occupied, | 11:29 | |
I hope we can get to that momentous question | 11:32 | |
before this time is over, | 11:35 | |
who seems to be occupied with military matters. | 11:38 | |
We can't see him soon doing this, | 11:41 | |
but it's amazing how in crisis attitudes do change, | 11:45 | |
and so you could have a government agency, | 11:48 | |
like the Reconstruction Finance Corporation, | 11:52 | |
whose only task is to pump money into the stock market | 11:54 | |
by giving bid orders for a wide range of securities. | 11:57 | |
This would be of course, one possible form | 12:03 | |
of socialization of the economy. | 12:06 | |
The private economy panics and sells out | 12:10 | |
its equity ownership in our large corporations | 12:13 | |
to the government. | 12:16 | |
When the government owns securities, | 12:18 | |
I dare say Nader's Raiders and the students | 12:20 | |
will put pressure upon it to exercise its proxies | 12:24 | |
and General Motors will not find | 12:26 | |
that it can make its decision about lead in the gasoline | 12:28 | |
and the compression ratio of autos and their safety features | 12:35 | |
as the management of that company would like to, | 12:39 | |
but the public interest will intrude itself | 12:41 | |
in a very observable form. | 12:44 | |
The Japanese case was rather successful. | 12:48 | |
They did help keep the market from going down, | 12:51 | |
and then as always happens when you | 12:55 | |
have successful stabilization, or often happens, | 12:56 | |
as the market went up, the Japanese agency | 12:59 | |
has been able to sell back its stocks, | 13:01 | |
take back money, and I dare say often at a profit. | 13:05 | |
I should call your attention a second and similar incident. | 13:09 | |
When Mussolini was the dictator in power in Italy, | 13:12 | |
during the Great Depression, | 13:16 | |
the Italian stock market fell apart, | 13:18 | |
and a number of the largest Italian industrial corporations | 13:22 | |
were in real trouble, | 13:25 | |
and so an agency whose initials I do not exactly remember, | 13:26 | |
it begins with E, something like ENI, | 13:30 | |
was set up, and this agency acquired | 13:33 | |
as a stabilizing and mopping up operation, | 13:37 | |
a significant equity ownership | 13:42 | |
in some of the largest Italian organizations. | 13:44 | |
It turned out after World War II | 13:49 | |
that this agency became an important factor | 13:51 | |
in the rather remarkable post-war recovery of Italy, | 13:54 | |
and let me just call it the ENA for the purpose | 14:00 | |
of the present discussion, whether | 14:02 | |
that be its correct name or not, | 14:05 | |
the ENA was involved in lots of the | 14:06 | |
public utility ownership and operation within Italy. | 14:09 | |
Similarly with certain corporate activities | 14:13 | |
it had a large ownership in the large corporations, | 14:15 | |
and it even got involved in making contracts | 14:20 | |
for oil exploration and exploitation | 14:24 | |
with the sultans and potentates of the near east. | 14:27 | |
We could come to that, but I rather doubt | 14:33 | |
that the situation will deteriorate to a point | 14:36 | |
to call for that. | 14:40 | |
Now why do I think that short of such operations | 14:44 | |
that the decline in the stock market | 14:47 | |
will not itself be a major factor | 14:50 | |
plunging us into a deep depression? | 14:52 | |
There used to be a theory in the 1920s | 14:56 | |
that the stock market, as Wall Street goes, | 14:59 | |
so goes the nation. | 15:02 | |
It was like the theory that all depressions | 15:04 | |
start on the farm | 15:07 | |
and that you had to support the agricultural sector | 15:08 | |
because if you didn't, industry would suffer. | 15:11 | |
We are all in the same boat together, | 15:15 | |
but we're not all in intercommunication to that degree | 15:17 | |
and nobody believes that the health of the farm sector | 15:20 | |
of the economy is the crucial determinant | 15:25 | |
of the macroeconomic GNP fluctuations | 15:27 | |
of the American economy. | 15:30 | |
Also very few people, up until now in recent years, | 15:32 | |
have been of the opinion | 15:37 | |
that as Wall Street goes, so goes the nation. | 15:38 | |
I recall that the late Ernest Henderson, | 15:41 | |
the president of the Sheraton corporation, | 15:45 | |
a very successful entrepreneur, was of the opinion, | 15:49 | |
and if you have stopped in a Sheraton hotel, | 15:53 | |
just as there is a Gideon Bible in many hotel rooms, | 15:56 | |
you would find a copy of, I guess it's Mr. Sheraton | 16:02 | |
is the title of the autobiography by him, | 16:05 | |
and in that he expounds the notion | 16:08 | |
that the behavior of the stock market | 16:10 | |
with a variable lag, say six to nine month lag, | 16:14 | |
that has a all familiar ring to it, | 16:18 | |
will determine the behavior of GNP. | 16:20 | |
I can recall, he's dead now, | 16:25 | |
and I only tell this story for its scientific information, | 16:26 | |
I can recall being invited to lunch with him in 1962, | 16:31 | |
the last time Wall Street was going to hell, | 16:37 | |
and he told me that he had a message to give me, | 16:41 | |
which I should pass on to then President Kennedy, | 16:44 | |
namely that with very little doubt, | 16:46 | |
the country would be in severe recession. | 16:50 | |
Our meeting was the let us say, June 1, | 16:54 | |
just at the low point of the market, | 16:58 | |
that by July 15th and certainly by September 15th | 17:02 | |
the country would be in a very severe recession. | 17:05 | |
Well, the Henderson thesis never got a complete testing | 17:07 | |
on that occasion, | 17:11 | |
because if the market is important, | 17:13 | |
nobody thinks that a short term dip in the market | 17:15 | |
can be important. | 17:19 | |
It must be a more permanent destruction of net worth | 17:21 | |
to have a strong quantitative effect | 17:25 | |
upon the economy. | 17:28 | |
The Henderson view, as I say, is not the popular view today. | 17:30 | |
I would say that most economists and man of the street | 17:35 | |
would probably go onto the other extreme. | 17:39 | |
The other extreme which is a bit extreme, I think, | 17:40 | |
is that the market is a sideshow, it's a casino, | 17:44 | |
it's where fat men with a penchant for arithmetic | 17:47 | |
take each others' money away | 17:49 | |
and sometimes fleece the public, | 17:51 | |
but the sideshow is not the main show. | 17:53 | |
The tail of the dog is not the dog, | 17:56 | |
the body of the dog is GNP, the tail of the dog | 17:59 | |
is the stock market. | 18:02 | |
By and large the body wags the tail, | 18:03 | |
and the market, the stock market takes its cue | 18:07 | |
from business conditions, rather than vice versa. | 18:10 | |
It's a little bit more complicated that that of course, | 18:15 | |
because the stock market tries to take its cue | 18:17 | |
from where it reasons business will soon be. | 18:20 | |
The market's always looking ahead. | 18:24 | |
But if you say that the future of general business, | 18:25 | |
the body of the dog, is determined | 18:27 | |
by the present of the business conditions, | 18:29 | |
then we can say via a chain of expectations, | 18:33 | |
it is the arrow travels from GNP to the stock market, | 18:38 | |
rather than vice versa. | 18:42 | |
Images are helpful, but they can also be harmful. | 18:46 | |
I suppose the body of a dog does wag the tail, | 18:50 | |
and the tail doesn't wag the dog, | 18:51 | |
but we know that when the earth attracts the sun, | 18:53 | |
excuse me, when the sun attracts the earth, | 18:57 | |
the earth is also attracting the sun. | 18:59 | |
When a ball falls to earth, the earth is also rising | 19:01 | |
toward the ball, according to Newton's law | 19:05 | |
of action reaction. | 19:07 | |
And so applying this analogy to the present case, | 19:09 | |
I believe it is sound economics to realize | 19:11 | |
that there is some significant reflux interaction | 19:14 | |
going back from the tail to the dog. | 19:19 | |
But let's keep our quantitative sense of proportion. | 19:24 | |
It is vastly smaller than is believed to be the case | 19:27 | |
by the late Ernest Henderson or advocates of that school. | 19:31 | |
What it means concretely is | 19:37 | |
that this destruction of market values, | 19:39 | |
which is having its toll of psychology | 19:42 | |
and could soon quite possibly spread | 19:42 | |
to entrepreneurial decisions with respect to, | 19:46 | |
say plant and equipment expenditure, | 19:49 | |
this will have perceptible effects, possibly, | 19:51 | |
on the propensity to consume, | 19:57 | |
on how much money we spend out of each income level, | 19:59 | |
and of course, in a period of mini-recession, | 20:02 | |
if people spend less of their income, | 20:06 | |
that means very soon that their incomes | 20:08 | |
will also be less, | 20:10 | |
because spending makes income, income makes spending. | 20:12 | |
Similarly, we know that there is a great deal | 20:16 | |
of external financing needed by corporations | 20:20 | |
if they're going to come anywhere close | 20:24 | |
to fulfilling the plant and equipment intentions | 20:26 | |
of expenditure which they have reported to the SEC, | 20:29 | |
which they have reported to McGraw-Hill, | 20:35 | |
which they have reported to the Renfrey Organization. | 20:37 | |
And here too, the decline in the stock market | 20:40 | |
makes for less investment spending. | 20:44 | |
All this means in my judgment is | 20:47 | |
that one new adverse factor has been added to the equation | 20:50 | |
with respect to the development of business | 20:56 | |
in the remaining months | 20:59 | |
and in the months of 1970 and in the year ahead. | 21:01 | |
All that that means, since we do not live today | 21:09 | |
in the age of Herbert Hoover, | 21:11 | |
but do live in the age of the mixed economy, | 21:14 | |
is that any weakness emanating from the stock market itself | 21:16 | |
must call for countervailing strength | 21:19 | |
as a result of stabilization policy. | 21:26 | |
Concretely this means that if previously | 21:28 | |
exactly 4.5% rate of growth of the money supply | 21:32 | |
was what the doctor ordered for good performance | 21:36 | |
in this economy, | 21:40 | |
then it should now be let's say 5.5%. | 21:42 | |
Concretely this means that if previously | 21:45 | |
a two billion dollar budgetary surplus | 21:49 | |
was exactly what the doctor ordered | 21:52 | |
for proper stabilization, anti-inflation policy, | 21:55 | |
then less than a two billion dollar surplus | 22:00 | |
would now be indicated. | 22:04 | |
Maybe only a half a billion dollar surplus. | 22:07 | |
Or just so we make no fetish | 22:10 | |
of balancing the budget as such, | 22:13 | |
if previously the budget should've been balanced exactly, | 22:15 | |
then maybe now the budget should prudently be in deficit | 22:18 | |
by a billion and a half dollars. | 22:23 | |
Now I hold no brief for the particular numbers | 22:27 | |
that I have used, 4.5% rate of growth of the money supply | 22:29 | |
to 5.5%, balanced budget to a deficit | 22:32 | |
of a billion and a half. | 22:36 | |
Those perhaps exaggerate the importance | 22:39 | |
of the decline in the stock market | 22:40 | |
as far as it has gone up to this moment, | 22:44 | |
although if you wanna believe the boogeyman stories | 22:48 | |
that are really going the rounds now | 22:52 | |
of what could be in the cards, | 22:55 | |
then the prescription I've given you | 22:56 | |
is actually an inadequate one. | 22:58 | |
Nevertheless, I would have confidence | 23:03 | |
if we had a government interested and alert | 23:06 | |
to do macroeconomic stabilizing, | 23:12 | |
I'm now not talking about a perfectionist | 23:15 | |
fine-tuning administration, | 23:17 | |
but just a responsible administration, | 23:19 | |
the sort of administration | 23:22 | |
that I hope the Nixon administration will become | 23:23 | |
and act like in the months ahead, | 23:29 | |
if this sort of a situation develops, | 23:33 | |
then I think that these downward influences | 23:34 | |
emanating from the stock market and from Wall Street | 23:38 | |
can rather easily be handled, can rather easily be offset. | 23:41 | |
This will not make happy the man who has tremendous losses, | 23:48 | |
which perhaps he himself will never recoup, | 23:52 | |
but it's the body politic that I'm interested in primarily. | 23:55 | |
I have only a few minutes left, | 24:00 | |
let me on this occasion very quickly say where I think | 24:03 | |
we stand with respect to the mini-recession. | 24:07 | |
The April figures have come in, the production index | 24:12 | |
was down again. | 24:15 | |
We've had this bad stock market news. | 24:18 | |
No man can assert with confidence | 24:21 | |
that the mini-recession or recession | 24:27 | |
if it's going to be called a recession, is over. | 24:30 | |
On the basis of the evidence that I've seen so far, | 24:33 | |
it seems to me that it still is a pretty good bet | 24:37 | |
that the second quarter will not show a decline | 24:41 | |
in real GNP, | 24:45 | |
but it could be that the second quarter | 24:48 | |
will show a further small decline in real GNP. | 24:51 | |
In that case I think it's a pretty good bet | 24:54 | |
that the third and fourth quarter | 24:57 | |
will, as almost everybody has been saying, | 24:58 | |
register a rise in real GNP. | 25:03 | |
Unemployment will still continue to rise, | 25:06 | |
profits will still continue to be down | 25:09 | |
and to have further pressure on them, | 25:11 | |
but if there was a recession, that recession will be over. | 25:13 | |
Having said that, I want in the closing minute, | 25:19 | |
to comment on the interrelationship between | 25:24 | |
what is going on in our society and economics. | 25:27 | |
You know the economic system is part | 25:31 | |
of the total environment. | 25:33 | |
It cannot be immune from what is happening in society. | 25:34 | |
In my judgment, something very serious is taking place | 25:38 | |
in American political and social life. | 25:41 | |
We are seeing in an acute form at the moment, | 25:44 | |
an estrangement of a whole stratum of American life | 25:47 | |
from the mainstream of American life. | 25:51 | |
I'm referring to the fact that the whole | 25:54 | |
college and university community | 25:56 | |
is increasingly at odds with much of the rest of society. | 26:00 | |
I think this is a very serious matter. | 26:06 | |
The strikes on campus incident to the announcement | 26:10 | |
of the Cambodian adventure or escapade | 26:13 | |
or call it what you like, will quiet down, | 26:17 | |
the summer is coming. | 26:20 | |
The memory of those shot at Kent State | 26:23 | |
will grow dimmer. | 26:26 | |
And human nature being what it is, | 26:29 | |
the black college students who were killed | 26:32 | |
in Jackson, Mississippi will not awaken | 26:35 | |
the resonant response in the whole community | 26:38 | |
that the Kent State massacre did. | 26:43 | |
Nevertheless, it will not be soon | 26:46 | |
that the words of a president, | 26:48 | |
perhaps a distraught president, | 26:50 | |
calling college students bums, | 26:52 | |
that will not soon be forgotten, | 26:55 | |
and Vice President Agnew's attacks | 26:57 | |
upon the university community would be exactly | 27:02 | |
an answer to the prayers of any member to the extreme left | 27:07 | |
who hopes that the university community | 27:12 | |
can be estranged from the mainstream of life, | 27:15 | |
just as it answers the prayers of those | 27:18 | |
on the extreme right who wish to condemn | 27:21 | |
the university community. | 27:25 | |
My purpose here is not to read any kind of a sermon, | 27:27 | |
but in connection with the commentary | 27:30 | |
on these cassettes in the weeks to come, | 27:34 | |
I'm afraid we shall have to make reference many times | 27:36 | |
to what is happening outside the economy, | 27:40 | |
because how can an economic system remain healthy | 27:44 | |
when the society in which it's embedded | 27:49 | |
is very, very sick? | 27:52 | |
- | Thank you, Professor Samuelson. | 27:54 |
If you have any comments or questions | 27:55 | |
for Professor Samuelson, address them to | 27:57 | |
Instructional Dynamics Incorporated, | 28:00 | |
166 East Superior Street, Chicago, Illinois, 60611. | 28:02 |
Item Info
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