Public Policy: The Underdeveloped U.S.

The honorable gentlemen of Japan could hardly be blamed if seen tittering behind their fans last week. On the front page of Tokyo's top financial daily, Nihon Keizai, appeared the startling news that the Kennedy Administration was pleading with Japanese industrialists to build plants in such "underdeveloped" areas as Kansas, North Carolina and New Jersey. "This request by the U.S., hitherto leader of the free world in the development of less advanced countries, came as a surprise to the Japanese Foreign Office," crowed Nihon Keizai.

Indeed it did—and to Americans as well. Growled Republican Congressman William Avery of Kansas: "Wichita has an abundance of skilled labor available, but I hardly believe we need to import Japanese capital and ideas to utilize it." In Washington, red-faced Administration officials hastily set the record straight. Nihon Keizai had built its overblown story on brochures that the Commerce Department sent last March to U.S. embassies in Europe and Japan. They were part of a campaign to attract more foreign investment to the U.S. as a way to alleviate unemployment and the balance-of-payments deficit. Though the Japanese were among the recipients, the Commerce Department really expected no significant Japanese response because of high U.S. labor costs and tight Japanese restrictions on capital exports.