Evening star., 1946-03-04
Effective Government
Action Seen as Need
Writer Holds Strikes Leading
to Economic Crisis
By Dapid Laurence

to Economic Crisis
By David Laurence
Thirteen years have elapsed since the
late President Roosevelt was inaugu-
that had forced the closing of the
banks Of the Nation. The American
people responded to the drastic steps
and co-operated with the Government
in the hope that firm leadership could
bring order out of chaos.
Today an economic crisis, not SO acute
in its appearance but equally severe, is
in the making. There is no vigorous
leadership-in fact, there are major
groups demanding that the economic
warfare be permitted to 60 to the point
of exhaustion while the rival interests
pursue their bitter conflict.
Strikes and work stoppages are block
ing reconversion and reconstruction.
Quarrels over wages have prevented the
national income from achieving the
levels that had been expected Instead
OF boom, as predicted, the Nation is
slowly drifting into serious depression.
Some One Must Steer.
Already it seems certain the first
quarter statements OF earnings will show
a sharp drop and that losses compared
to the expected gains will be widespread.
1t is evident that the anticipated wage
increases have already been wiped out
by the prolonged work stoppages. Pur-
chasing power is being diminished and
the temper of the people is one Of wide
spread dissatisfaction with the failure
of economic groups or the Government
to provide the necessary leadership to
swing the country to rate of produc-
ton which it was reasonable to expect
this year.
1t is easy to blame the labor unions
and their leaders and even easier to
blame the managements for failing to
surrender their profits-it depends on
which point of view one adopts. The
truth is the unions faced a critical stu
alton in the decrease of take-home pay
for their members and the managements
faced uncertainties as to the demand
they would have and prices they could
charge.
Under such circumstances, when the
economic ship seeks to operate without
. rudder, some one must supply the
steering apparatus. Since labor will
not permit management to do the steer
ing or vice versa, the public interest
requires that the Government do 1t.
n,,.;~~~~ c-n.~.
Small businesses are suffering from
the unscientific and unwieldy way wage
increases are being forced. Instead o.
developing a system wherein each In
dustry can work out levels that vii!
take care of the weaker competitors
the rule is to impose wages which only
the rich and powerful companies car
pay. The Governments wage and price
policy hurts small businesses.
Thus the monopolies, or at least those
with the largest amount of volume OF
dollars or production on their books
come out better while the smaller COM
peting units face a serious decision.
Some may be forced out of business
altogether This Is not leadership but
careless administration.
President Truman knows he is being
widely criticised. But his trouble Is
that he does not have set of advisers
who know very much about the opera
tions of the economic system. 1t Is all
very well to theorize, but the facts Of
business life often upset many a we'll
conceived theory. This is because the
laws of trade and merchandise are af-
fected by price-fxing, and Government
can only adjust the inequities OF the
price system by recognizing that 1t is
also forcing increases in costs through
blanket wage increases.
May Speed Depression.
If 1t is intended to discourage risk
capital and decide arbitrarily what
profits shall be earned, incentives to
expansion will not emerge. Instead, Just
as soon as pent-up demands for goods
now short are met, the few months
boom that must inevitably follow the
present recession will collapse and the
real depression will come sooner than
expected.
The Republicans were charged with
the Hoover depression of 1888" but
unless there is a better leadership in
Washington, there will be . Truman
depression" in the next l8 months which
1t will not be possible for the Demo-
Gratis to blame on their Republican op-
ponents. The executive and legislative
branches of the Government are Demo-
cratic and the people at the polls next
November will have their first oppor-
tunity to express themselves on the
failure of the Washington Government
to act vigorously in relation to strikes
and work stoppages.
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