What's good for GM may at last be good for the US
There have been a number of interesting, but secondary, developments in the world over the past week all calling for notice. I submit the novel thought that perhaps the most important was not rioting on the streets of Poland's cities or a startling letter from the United States President to Israel's prime minister, but a decision by the great General Motors Corporation in Detroit that it is going to lower, not raise, the prices of next year's motorcars.
Here, for the first time, a major American corporation is recognizing officially that the inflation era may be over, that the United States is moving back into a condition of competitive economic stability. This should mean to the outside world a sturdier foundation under American foreign policy.
The news from General Motors follows evidence of American economic soundness. When the Mexican government found itself in deepest economic trouble it turned at once to Washington for help. And got it. Details were being worked out this week for a major financial rescue of Mexico. The US still has the economic and financial resources to rescue the Mexican government from several years of squandered assets. (The Mexican government itself tried to halt capital flight Sept. 1 when it nationalized private banks.)
Be it noted that when in trouble Mexico - like many African, Mideastern, and Asian nations - turned for help to Washington, not to Moscow. The plain fact is that only the US could have managed the rescue operation; and it is better able to do so this year than would have been the case a year or so ago because the inflation has been checked and the dollar is again credible.
America's influence in the outside world has been on the decline for some years. President Reagan has tended to blame the decline on failure to keep ahead of the Soviets in all branches of military weaponry. But weaponry is a convincing force in world affairs only when it is built on a healthy economy. The decline of the American economy has been the underlying cause of declining influence.
The recovery of that influence is of course not yet enough by itself to cause the Soviet and Polish governments to restore political freedom to the people of Poland. That would be asking too much. But certainly American feelings are part of the reason why the Polish government went to considerable lengths (by its standards) to minimize bloodshed and violence in the suppression of pro-Solidarity demonstrations in the main cities of Poland.
There was no question of allowing those demonstrations to go unchecked. The Polish military regime had to prove its ability to control the streets in order to retain credibility in the eyes of Moscow. Had it abandoned the streets to Solidarity, Moscow would have felt forced, for its own security, to use a different instrument for the suppression of political freedom in Poland.
General Jaruzelski's regime simply had to retain control of the streets or see its role taken over, probably, by the Soviet Army. In that case many more than two Poles would have died in the fighting.
The ''battle of Solidarity's anniversary'' was a draw. The military regime kept control of the streets. Solidarity proved again that the hearts of the Polish people are with the freedom movement. There still remains the need for an accommodation between the two forces if Poland is to get back on the road to a healthy recovery from its economic woes.
Washington's efforts to influence events in Poland by blocking the pipeline from Siberia to Western Europe reached an interesting point during the week. In Washington the secretaries of State, Treasury, and Commerce jointly urged the President to modify or tone down his anti-pipeline project on the obvious grounds that it had become an asset to Moscow.
The President was giving up as reluctantly on the pipeline affair as he had on the new tax bill. But the project had become so obviously ''counterproductive'' that he had little choice. A way had to be found to get the President off the hook. His three main Cabinet officers were doing their best.
Biggest surprise of the week was a letter from the President of the US to the prime minister of Israel and public statement calling for a halt to the building in occupied Arab territories of new Jewish settlements and a halt to the expanding of existing Jewish settlements.
It was a surprise and it caused an instant uproar in Israel because it was the first clear sign that President Reagan may have reversed his own attitude toward Mr. Begin's purposes.
During the 1980 campaign Mr. Reagan repeatedly said that he saw nothing ''illegal'' about the Jewish settlements in Arab territory. When he spoke to Jewish audiences, he used the words and phrases that to any Israeli would seem to mean his approval for the ultimate annexation of all of the occupied territories by Israel. Mr. Begin has obviously been operating on the assumption that he had Mr. Reagan's permission to proceed toward that annexation. He has been so proceeding.
No one in the diplomatic world can be sure at this moment whether there is indeed a decisive change in Mr. Reagan's attitude on this essential matter. It remains to be tested. If the President really means that he wants a halt to all building or expanding of Jewish settlements in occupied territory, he has indeed added a new element to negotiations between Israel and its Arab neighbors.
It would mean that he has accepted the Egyptian view that there can be no peace, and no movements toward peace, in the Middle East, unless Israel gives up the idea of annexation and turns instead toward true ''self-determination'' for the Arabs of the West Bank, Gaza, and east Jerusalem.
Recent events in Lebanon may have influenced the President on this matter. He claims that he was surprised by the Israeli invasion of that neighboring Arab country. In fact he had done nothing to prevent it. He and his counselors may have learned that Prime Minister Menachem Begin will push ahead with the territorial expansion of Israel unless he is firmly and decisively told no in advance of some new move.
Mr. Begin was not told no in advance of the invasion of Lebanon. The President was shocked by what happened. He called it an ''outrage.'' This time, apparently, he is taking a stand before it is too late.
The planting of Jewish settlements in the occupied territories has already gone so far that there is some doubt as to whether the process can still be reversed. But if it is to be reversed and if the Arabs of Palestine are to have true ''self-determination,'' then this is probably the last chance to do it.
President Reagan has the leverage necessary to cause a change in Mr. Begin's plans. Israel's economy is under new and heavy strain due to the Lebanon invasion. He probably needs further US financial assistance as much as does Mexico. But will Mr. Reagan use that leverage on behalf of the Palestine Arabs in a congressional election year? Tune in next week for a possible answer.