Who Killed Jack Armstrong?

By Marshall Loeb

The stock market has come alive, industrial production is growing like a young colt, and 4 million more Americans are at work than a year ago. Then why do so many people feel so skeptical and tentative about the economy?

Walter Wriston, probably the nation's most influential banker, thinks he has some answers. As chairman of New York's Citicorp, he is a gilt-edged Establishmentarian who gets an insider's rare look at loan-seeking corporations and bends elbows with their chiefs at the Metropolitan Club and the Greenbrier and the Business Roundtable. Yes, says Wriston, business should be strong both in 1978 and 1979, which is as far as anybody can foresee. But he is bedeviled by many questions about modern America, including who killed Jack Armstrong and whether Abe Lincoln could be elected today and what's doing with the Laffer Curve. Let Wriston explain three of the problems that he senses worry the nation:

The first is high taxes. "The taxpayers are in revolt. You see that in the Jarvis Initiative in California, which would drastically cut property taxes. You see it in people leaving New York State by the thousands and fleeing Massachusetts for New Hampshire. The attraction of the Sunbelt is not just the sunshine but that there is no income tax in Texas. Just about anywhere in the country, if local authorities try to raise taxes, citizens come over the wall in protest."

History's lesson, as University of Southern California Economist Arthur Laffer has shown in the so-called Laffer Curve, is that when taxes go up, economic activity goes down. Empires from Rome to Britain reached their fullest flower when their taxes were low, Wriston remarks, and started to self-destruct as taxes rose. Americans feel uneasy about their economy, partly because federal, state and local governments tax away 29% of the gross national product. Warns Wriston: "We are getting very close to the point where high taxes will cause the economy to deteriorate."

The country is also upset about the spread of Government regulation. "What worries me," Wriston says, "is that General Motors and Citibank have a fighting chance of obeying all the new regulatory laws because we have the staff and the big-time lawyers to do so. But most small business people do not. They cannot even find out what the law is. There are, for example, 1,200 interpretations by the Federal Reserve staff of the Truth in Lending Act. Now 90% of the more than 14,000 commercial banks in the country have fewer than 100 employees. If you gave every staff member those regulations and started them reading, they wouldn't be finished by next year.

"The same is true if you go into the neighborhood delicatessen or laundry and ask about the Occupational Safety and Health Act. 'Hey, are you obeying OSHA?' And the guy behind the counter sneers, 'Osha, gosha, forget it!' If the majority of people ignore the law, it will stop the vitality of our country--the voluntarism on which it is built."

Finally, Wriston is troubled that "success is no longer perceived by large groups of people as being success. It used to be that if you were Henry Ford and got three fellows and a monkey wrench and built a great company, people gave you flowers. Today, if you create a great company, people take potshots at you because they think that behind every success there must be some dirty secret."

Take IBM. "One of the few scientific edges that we still have on the rest of the world is in computer hardware and software," says Wriston. "So the Government is suing to dismember IBM. The question is: What is the public good of knocking IBM off? The ultimate conclusion to all this nonsense is that people will cry, 'Let's break up the Yankees--because they are so successful!' "

Success is under suspicion, heroes are under attack. "I claim that Jack Armstrong, the all-American boy, died a long time ago," Wriston continues. "And today, Abe Lincoln could never be nominated. Abe Lincoln, the fellow who did not show up at his own wedding. Abe Lincoln, who, after Ann Rutledge died, was certifiably crazy and was found wandering in the woods, mumbling to himself. Can you imagine what a great story that would have made on Channel 7? The sad fact is that we are scrutinizing our leaders and our institutions in the kind of close detail that no human being and no institution can survive."

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