NFO-171 (AV10670): Private Enterprise

mr. Paulson recently Secretary Henry Fowler stated that the American economy is in grave danger what would you say some of these grave dangers are well the greatest danger at the present time mr. Mack is the inflation factor in order for the general public to understand the actual condition of our national economy it's necessary to prepare a balance sheet or a profit loss statement on the overall economy the same as you do on a corporation or an individual business right and in doing so it will enable us to know where we've been where we're at and where we're headed and anyone that will take the time to audit the official records of the United States government this is the economic report of the president of the United States which is published annually and transmitted all members of Congress this publication contains all of the statistics on every segment of our national economy and all we have to do is audit these records and prepare a balance sheet and a profit and loss statement the same as a corporation or any other business and when we do we know the exact condition of the national economy because our national economy is nothing more than the sum total of all of the component parts all of the corporations all of the small business professions taking agriculture as a major unit all the wages that are paid when we audit these records it enables us to know exactly the condition and when mr. Fowler was referring to the grave crisis that lays ahead I don't know exactly what he was referring to but I'll tell you what we refer to when we say that the national economy is in grave danger first of all the economy now for the past 17 years has not been a profit economy every year it becomes more and more profitless for the private enterprise segments to meet the operating costs of running our economy and as a consequence we're operating on debt expansion rather than the earn capital necessary for capital expansion to put up the buildings the plants the machinery equipment technology to keep this fantastic economic system of ours operating and to give you a general idea of the condition of the national economy I have a little chart here that illustrates the increase in just the federal debt from prior to World War one going back to 1917 up to the present time now you'll notice that before World War one right we practically had no federal debt whatsoever during World War one our national debt increased but then you'll notice that after World War one we liquidated a great portion of the federal debt and this is the way we liquidate debt is through a depression and through repossessions and liquidations this is one the property that was once years now became the property of someone else it was reclaimed and then you'll notice in the beginning of World War two the way the federal debt began to increase and it increased and it increased and this is the way that our federal debt has been increasing ever since for now the economists tell us that we're not supposed to be concerned about the debt because we owe it to ourselves so what do you say we take this enormous federal debt and dump it in the ocean and forget about it it's none existent and when we're at it let's take the debts of all of the 50 states and dump them in the ocean we'll take the debts of all of the large cities New York Chicago Philadelphia Detroit and all of the other large cities across the country we'll throw those debts into the ocean and the debts of all of the towns the cities and villages all the county debts all the township debts and the debts of all of our schools wipe them out what do we have left we have the debt that will bankrupt the United States the debt that Congress and the general public pay no concern to whatsoever and this is the private debt because we're operating in a private economy in the United States and we have to be concerned about the financial condition or the economic condition of the private enterprise system if we're going to have a true picture of the condition of the overall economy and so the question arises how much longer can the private enterprise system in the United States continue to finance the fantastic debt expansion that's been going on in the United States for the past 17 years but now we've prepared a profit and loss and a balance sheet on our national economy and through our research we discover the private enterprise at the end of 1967 this past year was earned only earning 57 percent of the income necessary to meet the wage and interest costs of operating our economy in other words private enterprise was being shortchanged 45 percent of the income that it must have in order to meet the wages the interest cost and taxes to keep the economy moving I mean it was 45 percent in short then 45 percent in short this is certainly a figure that the American economy should be concerned of its grave danger right now here's what's happening as a result if you'll check the official records of government you'll discover that from the end of 1965 to the end of the third quarter of 1967 but the corporations in the United States added almost 100 billion dollars to their debt expansion this is for new plants machinery and equipment and yet their income only improved four hundred billion dollars this is only an increase of one half of one percent on a 100 billion expansion program how can the corporation's even pay 1% dividends to stockholders with a performance like that it's impossible now this has been going on for 17 years and there isn't only the corporations or the small business but agriculture has also been the victim of this profitless society that we've been living under and I'd like to let the viewers see the performance of our national economy in the private enterprise system since nineteen hundred and fifty you'll notice that this chart illustrates the income of all of the private enterprise segments of our economy from 1950 through the present time now this chart shows the increase of the various segments of private enterprise from 1950 through the end of 1966 every inch on this chart I'll get this every inch on this chart represents ten billion dollars now from 1950 through 1966 the net interest profits increased from two billion dollars to twenty billion the increase in rental income of persons increased from nine point four billion to eighteen point nine billion farm income increased from thirteen and a half billion to sixteen billion small business profits increase from twenty four billion to forty one point eight and the income of corporations increased from 24 billion to forty eight billion one hundred million dollars now this is the income of all of the revenue producing segments of our national economy but let's look at the other half of the ledger the half that the general public seems to know very little about how about the increase in the fantastic debt well I'd like to unfold this chart and show you what has happened to the debt expansion during the same 16 year period and I'm talking now about the increase in our gross public and private debt now the red lines will indicate the increase in this debt over this period of time and it's almost staggering as we unfold this chart and please keep in mind that every inch of this chart represents ten billion dollars mr. Elliott I wonder if you'd hold this chart for me for a moment and the few can get it stretched out maybe you can walk back aways but we ran out of cardboard when we prepared this and found it necessary to add all of this to this chart in order to get the debt expansion on this record from 1950 through nineteen hundred and sixty-six now this is the debt that the people of the United States have accumulated from 1950 to 1966 and this is the economy that we have been bragging so much about during the past 16 years this great prosperity that we've been told about has been nothing but debt expansion and from 1950 through the end of last year we added eleven hundred billion dollars to the public and private debt Thank You mr. Paulson we'll be back just one moment for further interview with Arnold Paulson [music] us farm report a public information program brought to you in the interest of agriculture rural business and the well-being of our nation by members of the national farmers organization in this area and others interested in having American agriculture receive cost of production plus a reasonable profit the American farmers and ranchers are building a brighter future for agriculture through the national farmers organization the organization that awoke America and represents the leadership of Agriculture u.s. farm report features private enterprise with gifts Arnold Paulson research analyst from Granite Falls Minnesota he's been past president of Minnesota State Junior Chamber of Commerce and past americanism chairman of the Junior Chamber of Commerce of the United States mr. Paulson a businessman also heads the citizens Congress for private enterprise here to do the questioning is Lee Eliot and Don Mack assistance in public information for the national farmers organization mr. Paulson you've been traveling around the country quite a bit holding economic seminars talking about the economy of the nation in rural America red when did you first get interested in this well actually I've been interested in agriculture all my life because as I grew up as a boy my father was involved in the retail grocery trade and I at that time knew the value of Agriculture at least to the economy of our community because at that time the farmers would bring in their their eggs home churned butter and things like that and this is what they used to buy their groceries and of course all my life I realized that agriculture has been the basic foundation of the economy of rural America but I didn't get really concerned about the fantastic impact that agriculture has on our national economy until about five years ago when I became very much concerned in industrial promotion and industrial development and I've read many of the surveys that have been prepared on various communities by many of the engineering counseling services and all of the reports that I saw were all one-sided all they ever pointed out was the advantages that the community was going to receive through industrial expansion but never would they emphasize the cost or the losses involved in attracting this in the speech so I decided it was time to prepare a balance sheet on industrial growth from a community that decide exactly or discover exactly where a community obtains its new wealth and the effect that new industry has on the well-being of all of the people in the community and of course I ran this survey first on my home county and the second survey I conducted was on the richest agricultural county in the state of Minnesota and to my amazement I discovered that such as my community if we were going to live off our basic industry alone but all we could earn would be approximately four hundred dollars a year per person and that was very startling and so I wanted to find out where the rest of the income originated I searched every cook and corner in the community I couldn't find it until I went outside and took into consideration these hundreds of small industries that we call farms and I found that the average family farm contributed four times as much to the per capita income of our community as our basic industry and that's when I began to realize that I've been working on the wrong side what would you say then mr. Paulson that the standard of living actually is based on what the standard of living in any country mr. Mack is based not on the number of dollars at the individual earns but the standard of living is based on the production of goods and services and the ability of the people to share and to enjoy these goods the standard of living in the United States is not the number of dollars that we earn per hour per week or per year but it's what those dollars were purchased it's the bathtubs the automobiles the type of home the balanced diet this is our standard of living and this is where so many people become deceived this is why in America under our private enterprise system we have created the greatest standard of living that the world has ever known and the thing that I'm afraid of today is will we destroy this standard of living by liquidating the greatest industry that the world has ever known American agriculture you're probably one of the greatest ambassadors of the private enterprise system have today what basically is the difference between private enterprise and the term free enterprise well we hear a lot of talk about free enterprise and actually I don't think anyone can really define it because we all have our difference of interpretation there isn't anything that's free you can't get into business free it costs money actually what they mean I by free enterprise is I believe they mean free from government and if we're going to be free from government then we're talking about private enterprise and what we have in the United States of America is not free enterprise we have private enterprise where the business and the industrial units are owned by the people either by an individual or by a group of people and this is what we call the incentive system that's given mankind the incentive to to produce and to become the greatest producers that the world has ever seen now free enterprise as some people interpret it would be the law of the jungle no no laws no regulations nor restrictions no tariffs or anything the survival of the fittest the fittest and this is a law of the jungle and I don't believe we have anybody in this country that actually wants that we want the freedom to be able to run our own business and to be gainfully employed and this is private enterprise and we do have this misinterpretation mr. Mack Red I haven't heard it said a good many times well a little comment about the world prices like here in America if the farmer was to get a fair price that he'd price himself out of the world market do you care to comment on this that's impossible because here in the United States we have the lowest farm prices in the world the United States of America is the only country in the world that bases their entire farm production on a world surplus market if you check the records of farm commodity prices in the common market country you'll find that they're all much higher than ours corn will average at least two dollars in the quarter a bushel where it's a dollar five in the United States now what we mean by the world market is not the market in Germany or England or France the world market is the surplus market of all of the commodities of the world on the London commodity exchange and the United States of America is the only country in the world that prices all of our farm commodities at this low level now when we export our farm commodities to the common market country and by the way the common market nations are the largest importers of American exports and we have to paint a duty or a tariff to bring these our farm commodities into those countries in other words if we want to bring our dollar in five cents corn into Germany we have to pay the differential in tariffs on our dollar and five cent corn to their price level which is approximately a hundred percent of parody of what farm commodities should be selling for in the United States now who gains the government of that country games because they include these tariffs in their budget and so actually what we're doing is subsidizing those countries with our exports and it's ridiculous because these other countries are willing to pay the price that they should be paying for these commodities because it will stabilize their market and what we're trying to do through this free trade agreement in the Kennedy realm is through free trade is to destroy their market level now Germany is an exam has maintained a hundred percent of parody for farm commodities ever since 1950 what is the standard of living in over in Germany with this 100 percent parity for agricultural products well one thing that we'll discover as we analyze the German economy is that they have an added 1100 billion dollars to their debt during the past 17 years to buy their production now if any country in the world today should be debt ridden it should be Germany due to the fantastic rebuilding program that recovering from World War two but Germany doesn't have the debt and Germany has a solvent economy and they're growing in they're prospering and yet during the same 17 years what have we done in the United States we permitted our farm prices to drop from the parity level of 1950 to now 50% of parity and for every dollar we've underpaid the farmers since 1950 we've been forced to add $2.10 cents to the debt what is this doing to private enterprise what is the parody now for private enterprise here in America well private enterprise is only earning approximately 55 percent of the income that it must have in order to meet the wage and interest costs of operating our economy mr. Paulson I see that you put out one of the nation's leading newsletters called the Arnold Paulson newsletter and you seem to be very well-informed just what is your solution to the national and rural economic problem well I wish there was a different solution than the records bear out but unfortunately there is only one solution to our economic plight and that's a restoration of the farm commodity price level to 100% of parity and the reason for this is that the gross income of Agriculture is the greatest contributor to the new wealth that's created in this nation each year 70% of all of the basic raw materials that are consumed by the entire United States each year are the food and fiber products that are produced on the American farm and after all income is nothing more than production times price this is the income for the laboring people the income for business the income for agriculture and our national income is nothing more than the total productive units throughout the nation times a price level and in order to restore the national income to the level that it must be to meet the operating costs we have to restore the price level of 70% of all of the basic raw materials that we use and so it's nothing more than a pricing mechanism and if we will restore the price level of agriculture to the parity level where it belongs will generate $7 of national income for every dollar that we increase the prices of agriculture and business and industry in return we'll earn $1 in profits and savings as a result of this and there isn't any other way of solving our national economic problem other than restoring farm prices to a hundred percent of honest parity income now the question is how we're going to restore farm prices in other words who's going to bail the cat where our problem started with government and so unfortunately there's very little hope in converting Congress to restoring farm prices to the level where they belong because we've got a consumer orientated administration and Congress today where the consumer is receiving all of the preference and yet we're operating in a private enterprise system here in the United States in every other business and industry in America uses the pricing mechanism when you go into an automobile dealer to buy a car he prices that automobile you go into a jewelry store to buy a watch there's a price tag now this is the American way of doing business when you go to the automobile shows General Motors doesn't call all of the dealers in every day and have an auction on their automobiles to find out what they're worth like we do livestock they know that they have to have cost of production plus a profit or they can't stay in business in agriculture is the only industry in the world today that I know of that's operating back the Stone Age in their marketing structure and it's time that agriculture starts becoming businessmen like American industry and American business and price your production now how you gonna do it well it's very simple your organization's got the solution the national farmers organization well I don't care what you call it but unless farmers will band together their production like the National Farmers Organization is advocating and pooling all of the production on a national level and say now this is the price the American people are going to pay it and it's just that simple we do it in every other business the Baker does it the candlestick maker does it but not the farmer well now as I talked with one of your officials earlier today he outlines that this is all that the farmers are trying to do but it's a new concept in agriculture just like the combine and so it's sometimes very difficult to get farmers to see the light but until the day comes that farmers will price their production the same as every other business it will be impossible to restore equity of income to agriculture there's only one thing wrong in Agriculture today and that's income well how do you improve the income of Agriculture you can only do it through improving price the solution is for the farmers to have enough common sense to figure out what their commodities are worth and price it and get it it's just that simple and this is I understand what your organization's all about isn't it mr. Mack yes sir that's right actually the national farmers organization is legally organized and operates under the capper-volstead Act which was the legal structure that was set up by Congress um well way back in 1922 which gave the farmers the right to band their production together as producers and producers only under a collective bargaining program to get this one thing and that is for their farm prices and of course this is what we're trying to establish their farm prices stabilize the farm prices under contract well Andrew J. Volstead that happened to come from my hometown Granite Falls Minnesota well we have more than one thing in common in the senator Capper came from my home state Wow wonderful I happen to live about four or five doors from the Andrew the Andrew Volstead residence back in Granite Falls and I've read and studied the captive Worcester back but I'll tell you one reason why the NFO has captured my enthusiasm and attention and I'm a businessman not a farmer and I believe in the private enterprise structure in the United States and I have no quarrel with the other organizations or when the cooperatives believe me but one thing that I know that the national farmers organization is not going to do is you're not going into competition with my business this is right you're not going into competition with Main Street that is right and for this specific reason every single businessman in the United States should take the time to study the program of the national farmers organizations for their own benefit and once they've analyzed the program of a national farmers organ or the or the or the collective partnering program they can't help but support you because this is what they believe mr. Paulson I'd like to quote here just one more month we're running close out of time but this was taken from a publication from the farm chemicals entitled government and your business it says upshot of all the talk about farm bargaining is that nineteen sixty eight now well may well go down in economic history as a year of farmer bargaining though know that NFO started the trend eight years ago it is important to note that the connection with the new official blessing acquired by NFO that it's type of bargaining is the only one that does not require new legislation I agree with that I agree with it a hundred percent pleasure having you on the program mr. Paulson well thank you very kindly and a pleasure for me [music] us farm report as presented private enterprise with research analyst Arnold Paulson from Granite Falls Minnesota with Lee Eliot and Don Mack doing the questioning members of the national farmers organization invites you to tune in again next week at the same time for more facts on agriculture and rural America which is the gear wheel in our economy that produces the majority of our nation's new wealth the farm income pattern sets the nation's prosperity and the national farmers organization represents new thinking in a new generation of agricultural producers [music]