The Omaha guide., 1947-08-09

HIGHLIGHTS

PROBLEMS ITOm LOYAL
Welfare
Last winter it was pretty gen
orally believed that what the
economicists, who have a langu-
age all their won, call a ~'correc-
tive recession, would occur in
the spring or summer of 1947.
This prediction was based on the
theory that savings were dwindl-
ing, that resistance to high prices
would force a downturn, that
the reat portwar spending orgy
couldn't last, that a more Or less
serious increase in the total of
people unemployed was newt
able, and that some of the water
had been squesszed out of the
economy.
Spring has passed and sum-
mer has come and these fore
casts have proven close to 100
per cent wrong. Prices are high
err than ever, but buying remains
at a very satisfactory levels. Saw
ings have declined and war bonds
have been cashed, at a high rate.
But there is plenty Of money a.
round, business frofits r ex-
cellent, more than 6O.OO0.OO0
people are employed, the stock
market has been showing signs
Of new life and labor's earnings
have enerally kept pace with
price increases and in some III
stances, notably caol, have far
outrun them, The recession"
may be just around the corner,
but it certainly isn't here yet.
There are certain black spots
in the picture. AS an example,
construction seems to be n
place where resistance to high
prices is really holding spending
to a minimum. Home construc~
ton is practically dormat-pros-
pective builders are wary OF
starting projects whose estimat-
ed cost may be $4,000 or $4,000
and whose final cost may run
well over $4,000. On the other
hand, there is a good deal of ex-
pand. whether they want to or
not. in order to protect their COM
petitive position and fill their
orders.
Retail sales 60 up and down
within a narrow rangs, but show
no signs of a serious decline. Ex<
ception to this is sales of luxury
goods. such as jewelry, which are
well under last year. But all the
staples, necessities and semi
necessities are finding a ready
market.
1t might be expected that this
situation would result in a feel
ing of confidence in industrial,
AGRICULTURAL and governmental
circles. But it has not. Many of
the economists are convinced
that the country would be a lot
better off in he long run if the
recession" had occurred on
schedule. They fear that we
may be heading toward a major
bust and q real economic de-
preston. Furthermore, the enor-
nous, unprecented amounts Of
money that are floating around
are a poor indicator of prosperity
these days. For instance, farm
income this year will be close
to three times what it was be-
fore the war. But the combina-
ton Of increased taxes. labor
costs, and feed and material
prices has absorbed most Of
what otherwise would have been
profit. And the factory worker
whose pay is at a high of $50
a week finds that it buys only
as much as S25 bought in 1910.
Generally speaking, the price
outlook is for further increases.
The last boost given coal miners
will push up the price Of steel
some IS a ton. And when the
price of steel goes up, the price
of a long list of manufactured
goods must follow. This will un-
doubleday result in new wage de-
mands by other manufactured
goods must follow. This will IN
doubleday result in new wage de-
mands by other groups of workers
If those demands are granted.
prices will take another leap
forward. So it goes in the wage
price spiral. E~FN