Economist tells retailers less consumption needed

January 19, 1993|By Michael Dresser | Michael Dresser,Staff Writer

NEW YORK -- Lester C. Thurow's message to the nation' retailers yesterday was akin to telling a group of cattlemen that people should eat less beef and more broccoli.

The economist, whose writings are close to the top of President-elect Bill Clinton's reading list, told the National Retail Federation that the U.S. economy needs a shift toward investment and away from consumption -- that is, his audience's sales.

In a keynote speech that sounded like an extension of last month's economic summit in Little Rock, Ark., the Massachusetts Institute of Technology scholar described a U.S. economy under siege by rivals that put their money into robots instead of recreational vehicles.

Meanwhile, he said, the United States was losing the kind of high-wage jobs necessary to put gas in the RV.

"You can't push investment up without holding consumption down, and if I started talking about holding consumption down, who would be lobbying against me? The retailers of America," Mr. Thurow said. "And you would be smart in the short run and incredibly stupid in the long run."

Mr. Thurow's talk was a ringing call for a government-led economic policy, delivered to a group that only a day before gave a rousing ovation to former White House Chief of Staff John H. Sununu's call for government to get off the back of business.

The MIT economist called for a shift to "communitarian capitalism," with the federal government planning strategy and making investments to promote long-term economic growth. He likened the government's current hands-off policy to playing football when the rest of the world is playing soccer.

Mr. Thurow also called on business to make a major commitment to improving the education system, suggesting that employers pay attention to grades in hiring decisions.

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