U.S. Business: As Others See Us

WORRY ON DOLLAR EASING IN EUROPE, said the New York Times one morning last week. EUROPE’S CONFIDENCE IN DOLLAR CONTINUES FADING, countered the New York Herald Tribune the same day. These conflicting headlines reflect a situation that is frequently hard to fathom, but that matters more and more. At a time when the U.S. has to worry about its own place in international economic competition, the prejudices of informed opinion abroad are a factor to reckon with. Last week TIME correspondents took their own survey of top businessmen and economists from London to Tokyo.

For the most part, foreigners seem more optimistic about the U.S. economy than businessmen here. A few foreign economists agreed with German Federal Bank Director Otmar Emminger, who felt that “a mild U.S. recession three to six months from now is a possibility.” But many more, pointing to the continuing rise in U.S. purchasing and production, side with Allen T. Lambert, president of Canada’s Toronto-Dominion Bank, who holds that “there is a tendency to overplay some of the weaknesses because North America is entering a new period of world competition. I certainly don’t expect a recession in the next six to nine months.” And a surprising number of the foreign experts agreed with a top economist in Paris who argues that U.S. bankers have been talking too pessimistically about the state of the dollar and the U.S. economy. His scolding comment: “No sense of responsibility at all.”

Needed: More Exports. Despite such general confidence, most foreigners can see plenty of room for improvement in the state of U.S. business. Few go so far as Swedish Economist Gunnar Myrdal, who fortnight ago described the U.S. economy as “stagnant.” But a majority is concerned over the fact that the rate of U.S. economic growth was only 2% last year v. an average 6% for the Common Market nations. To a man, foreign businessmen think that the U.S. should be expanding much faster economically—and many say that tax cuts would be a good way to spur expansion. Some argue that the Kennedy Administration should prune Government expenditures to make up the loss in revenue. “The U.S. farm scandal has gained notoriety even in Europe,” says Frederic Bates. . . director of the Union Bank of Switzerland.

Most frequently, however, the foreigners observe that U.S. exports last year were only 4% of the gross national product. “The way to make the U.S. economy healthier is to export more capital goods,” says Indian Industrialist Shanti Prasad Jain. Agrees a Belgian banker: “The saturation of the U.S. internal market has not inspired a sufficiently aggressive drive to find markets abroad.”

Wanted: More Boldness. Many foreign economic experts also believe that U.S. businessmen ought to be much more aggressive in budgeting for new plant and equipment and should start spending more on far-out research to develop new products. (Capital spending as a percentage of gross national product is currently 50% higher in Europe than in the U.S.). “For solid economic growth,” says Dutch Economist Jan Pen, ”you need a shift from one sector to another—as in the past from textiles and railroads to electronics and chemicals. What America needs is a new growth sector.” Sums up Yoshizane Iwasa, vice president of Tokyo’s powerful Fuji Bank: “The U.S. must have far greater confidence in herself. She is still a young and mighty nation, full of energy and potentials. Her businessmen should be American not only in name but in fact.”