From remarks of Rep. William E. Dannemeyer (R-Calif.) in Washington on March 18:
Mr. Speaker, the good news is that interest rates are falling worldwide: from 4 percent to 31/2 percent in West Germany, from 41/2 percent to for 4 percent in Japan and from 71/2 percent to 7 percent in the United States. The bad news is that unemployment jumped from 6.7 percent to 7.3 percent in February, the steepest monthly increase in this country since 1980, in spite of the anticipated reduction in interest rates. Commentators were quick to dismiss the bad news as a "schizophrenic aberration of no consequence."
But is it, really? Our interest rates and unemployment figures are perfectly consistent with our trade deficit at $150 billion last year. As long as the cost of borrowing money to West German and Japanese producers is one-half of that to American producers, it is futile to expect that money will flow into productive enterprise and into stock, bond and foreign exchange speculation. The stock market lives on its own dreams, dreaming that greenmail, leveraged buyouts, stock buybacks and other incestuous practices can make for prosperity. The fact is that they can only make for the hollowing of American industry.
Mr. Speaker, there is only one way to bring down interest rates to the levels enjoyed by our competitors, and thereby lay the foundation for capital accumulation and reward employment opportunities in this country. We must bring down the cost of government borrowing to 21/4-21/2 percent, by issuing gold bonds. After we have done that, all the news will be good.