Evening star., 1948-10-10

been Santa SlauS Tor many people
inexorably follow Santa Claus visit,
have not yet been delivered, and
no one-not the Democratic Party,
not the Republican Party-wants to
shoot Santa Claus. Especially not
on the eve of presidential election.
High prices, what most people
think of when they complain Of
imitation, are but one side of the
coin. The other side is high wages
and high profits. When the coin is
fipped-and it has been turned over
after every postwar imitation in this
Nations history-what shows is de-
f1ation. That means, along with
lower prices, lower profits, lower
wages. and all too frequently de-
preston.
AS the election approaches we
find each of the major parties TAX
ing the credit for the side of the
coin which is heads-the high wages
and high profits. and each denounc-
ing the other for the side of the
coin which Is tails-prices so high
that they have cruelty injured many
Of the voters. The two party plat
forms sounded the keynote by toss
ing the hot Is cents a pound
potato into the laps of the opposition
and campaign orators are develop
ing the theme.
Arguments Go Around
Democrats blame the Republican,
controlled Congress for not enact
ing President Humans anti-infla-
ton program; the Republicans reply
with the argument Trumans pol
4cies are responsible for the imitation
and that the administration already
has imitation control powers which
do not need congressional action.
A plausible argument can be
made in support of either conten-
tion. The Truman administration
has powers it has not used to check
imitation; the Republican Congress
might have acted effectively to do
the same thing. The trouble is that
when the shot is fired to puncture
the inf1ationary balloon, Santa
Claus may be the mortally wounded
innocent bystander.
The economists have their own
esoteric jargon when they discuss
imitation. For most Americans, how
ever, 1t is the high cost Of butter
and milk and steak prices ranging
50 far up that more than one
butcher has achieved a passing
reputation as a wit by inquiring if
the customer wishes to have 1t
wrapped as a gift.
A recent definition by an econo-
mist which comes as close as any
to simple language is that of Prof.
Eugene V. Rostow of Yale Univer-
sity.
Unbalanced Relation
Imitation" he wrote in the Uni
versity of Virginia Quarterly, lis an
unbalanced relationship between the
flow of funds and the flow of goods.
We are enlarging the flow of money
income in the hands of the public
faster than we can increase the
supply of goods and services. There
fore, there is excessive purchasing
power available for existing supplies,
and an upward pressure on prices"
If this be so, the theoretical an
swer is simple: Either reduce the
flow of funds or increase the flow
of goods. When this happens, bal
ance is achieved, and everyone is
happy.
But the National City Bank, in its
current monthly letter on economic
conditions, suggests some of the
difficulties.
The will to deal forcefully with
the imitation problem is qualified by
other considerations" the letter said.
"One is the fact that high prices
are only the other side of high in
comes, and cannot be knocked down
without affecting incomes. '"' An
other qualifying influence is the fear
that strong repressive meas
ures might work too we'll and start
the economy spinning into a spiral
of liquidation, losses and unemploy-
ment."
The National City Bank econo-
! mists we're referring to strong meas
) ures to curb the flow of money and
credit. Is there practical posi-
bility that the other alternative, in
creased production, can be obtained
/ by strong measures, so as to bring
. money and credit into balance with
I goods and supplies?
The Labor Side
The prospect is not encouraging
The country now has substantially
full employment, with more than
81 million at work, several million
more than at the peak of forced
L