Evening star., 1946-12-20
Economic Councils
Report Called Sound
Study Agrees With Opinions
By Private Industry Leaders
By David Laurence

Study Agrees With Opinions
By Private Industry Leaders
By DGpid Laurence
When the so-called Full Employment
Act" was being debated by Congress,
there was a hue, and cry about a gov.
ernmental council making prophecies
about business conditions and how
hazardous it would be for such fore
casts to be made by any Government
agency.
Now the Council Of Economic Ad-
visers" has issued its first report and
no great damage has been done to the
reputation OF the forecasters or to the
economic system by such opinions as
have been expressed.
On the contrary, what the council
says merely confirms what the econo-
nlists in private business have been say
ing for some time, what the forecasters
in economic and business journals have
been writing, and what everybody with
common sense has been thinking
namely, that II labor and management
can get together in America, there can
be an era Of rnexampled production and
prosperity.
The document issued by the council
has the usual cautionary phrases and
makes no explicit predictions as to
what is going to happen but is con-
fined to such meaningful generalities
as inadvertently to cause the stock
market to rise few points. This is
mostly because the council, probably
unintentionally, revealed piece Of news.
The council indicated that even II there
were a recession" there wouldn't be
any big subsidies or public works pro-
grams such as the New Deal embarked
upon. That bit Of forecasting was not
about general conditions to come but
about governmental policy and informa-
ton on that point is always welcomed
by the business world.
Exact Words Important.
The exact words Of the council are
important:
Mere legislative acts alone will not
force capitalists to invest, employers to
hire, or laborers to work. We do not
believe that 1947 presents situation
in which Government should under
take heroic measures Of public works,
consumer or producer subsidies to quick
en- employment or stimulate production.
We suggest that the impediments to
prosperity in the near future are Of the
sort that must be worked out, without
benefit Of direct Government interven-
ton, through the practical wisdom Of
management and labor, farmers and
fnanciers."
This Is the kind Of statement that
doesn't accuse anybody or offend any
body. It is the type Of balanced ex-
preston which has issued from gov
ernmental quarters for decades. It
wouldn't do, Of course, for an economic
council to speak out plainly and tell what
the labor situation really Is and what
really has been hampering production.
To say such things would be to get into
the realm OF the controversial, so the
phrases of the council must be more like
the distractions Of party platform
than the concrete statements Of q fact
finding report.
1t is regrettable that the council
didn't tell the actual losses to American
production since V-J day due to the
unwillingneSs of labor union leaders to
allow production to find its natural
level on the basis of wartime rates of
wages without endeavoring to cons0li-
date all the overtime and basic pay into
one pay envelope.
Biggest Mistake Made.
The biggest economic mistake, and
one that has cost the American workers
billions OF dollars, was made by those
governmental officials who encouraged
wage rises without permitting price
rises. Likewise there was grievous
error in urging business to absorb wage
increases before demand could be ap-
praised and production facilities rem
dered adequate to meet the demand.
This Is now clear In retrospect.
If the council didn't feel that It must
look ahead and had only given an &C.
curate diagnosis Of what has just hap
pened, 1t would have contributed much
to the sum total Of information and
sound thinking on economic problems,
Unfortunately, the council has allowed
itself to be lured into the jargon of the
politicians when it says: "But legisla-
tive changes in our business institutions
will be minor determinant of what
actually happens in 1s47."
The truth of the matter is that re-
peal of certain portions OF the Wagner
Act or amendment thereof will be the
biggest single determinant of the eco
nomic situation. If Congress amends
the Wagner Act to make it fair and
impartial and corrects the abuses in
National Labor Relations Board de-
cisions, production will be intensified
and there will be no recession. Almost
everybody knows this who is at all
familiar with the impediments to pro-
duction In 1916.
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