President Reagan was faulted by a noted economist yesterday for following the "peculiar" course of launching a huge military buildup while proposing no major federal programs to train the skilled blue-collar workers and engineers who will be needed to man the defense industry.
Lester C. Thurow of the Massachusetts Institute of Technology also told a subcommittee of the Joint Economic Committee the recent tax cuts won by the president are apt to worsen the "bottleneck inflation" rooted in competition between defense and civilian firms for the same manpower and other scarce resources.
"Supply-side economics is to be practiced everywhere but in the labor market," Thurow testified. "But the labor market is critical.
"The adverse effects are now starting to be seen. High schools find that they cannot obtain or retain mathematics and science teachers. But without a supply of scientifically trained high-school graduates, it is not possible to rectify either the current shortage of engineers or skilled blue collar workers. Signs exist that the exodus of scientific manpower is now starting to hurt the ability of colleges and universities to train the next generation of scientific manpower. Soon these shortages will be appearing in civilian high technology firms."
Replying to questions, Thurow said that electrical engineers were in short supply even before the buildup began. "If you wanted to open up a firm to build civilian computers, I don't think you could find the manpower to do it," he told Rep. Lee H. Hamilton (D-Ind.), the subcommittee chairman.
Much more optimistic assessments came from James R. Capra, senior economist of the Federal Reserve Bank of New York, and Assistant Secretary of Defense and Comptroller Jack R. Borsting, although the Pentagon official acknowledged that in the short run a marketplace unaided by government "is sometimes a very poor" provider of skilled manpower.
Capra found it "unlikely that bottlenecks will develop in defense that would lead to generalized price pressures," or, for that matter, "to price increases for major defense weapon system procurements."
Borsting, while pronouncing fears of manpower shortages exaggerated, said that "there certainly will be certain areas that we might have some problems in the defense industry." The problem areas were listed by the Pentagon's John Mittino, director of material acquisition policy, as certain types of forgings, particular types of precision bearings and certain germanium and electronic devices.
The bearing was the third and last in a series on the effects of the defense buildup on the economy.