Evening star., 1949-10-05

NlSsny VII W." fTVVSS
In American Economy
People Seem Indifferent
To Deficit Spending and
Coal and Steel Strikes
By David Laurence
Within a few weeks the Nation
will be talking about imitation as
vehemently as It did two years
ago.
Steel Is not being produced.
Coal production Is relatively
small. Scarcity brings higher
prices.
Increased compensation for
workers Is being sought by the
coal and steel unions which will
have to be added to sales prices.
Pensions and social insurance are
wage increases, too.
The steady pressure to bring
prices down has been relaxed ana
steel prices not only will not go
down but may go up again.
Deficit spending by the Federal
Government runs into billions.
Can Mean Only One Thing.
This can eventually mean only
one thing-an infationary trend.
In the long run, this means that
the dollar which had begun to
stabilize will gradually be turned
toward devaluation of it's purchas-
ing power.
Who is to blame? Certainly the
Congress isn't altogether at 1ault.
For the American people nave
shown little interest in supporting
the economy which a minority IN
the House and Senate strove so
earnestly to accomplish.
Likewise, the American people
seem completely Indifferent to the
work stoppages in steel and COAL
The fact that economic power ex-
ercised by national unions can
now regulate the flow Of produc-
ton and the price level seems not
to have disturbed either political
party's leadership or the country.
Although the Taft-Hartley law
is still on the statute books ana
the union spokesmen and tne
truman cabinet officers go up and
down the country urging its re-
peal, the President apparently re-
CARDS the law as dead letter.
He isn't enforcing it as he is
commanded to do to prevent work
stoppages. The. excuse Is mace
in administration circles that it
wouldn't do any good to ask-as
the law provides-for an 8O-day
period of reconsideration OF the
issues in dispute. But that's not
a good reason for failing to use
the powers granted the President.
From time immemorial legisla-
tors have argued that imitation Is
a good thing" and that it "helps
business" So does a shot In the
arm stimulate good feeling some
times-yet when the effects wear
off. the patient is often worse
than ever before.
The key to Americas economic
future Is lower prices through in
creased productivity.
Fever Is Here Again.
But the American Federation
of Labor now has announced that
its goal is a five-day week OF seven
hours each. Presumably the same
pay given for 40 hours would be
demanded for IS hours. This is
one way to, diminish productivity.
It Is one way to bring higher and
higher prices.
There has been some improve
ment In production per man-hour
In many industries since VI Day
but the benefits Of this now are
about to be erased through in
creased wage expense and shorter
hours.
The economic picture has been
getting brighter since midsummer
only because 1t seemed that
America was beginning to stabi-
lize. Had it been possible to
avoid a fourth round" Of wage
increases, the nation would have
been entitled to expect lower
prices.
But the fourth round" now Is
demanded In the form Of COM
financed pensions and social
insurance that would be a COM
mitment not just for one years
contract. It would apply for many
years to come. It means the end
Of any hope for price reduction
now and indicates a gradual rise
In the price level.
Inf1ationary policies began dur
ing the spring when fears Of a
recession penetrated Government
circles. Quickly the word went
forth to resume spending and
deficit financing. Now the drive
is on to keep farm prices from
reaching their natural level. Con-
trolls are interfering with the laws
of supply and demand. Pressure
groups in agriculture and labor
dominate the Government and
will adversely affect again those
whose incomes are fixed or are
not raised In time to meet higher
price levels. The imitation fever
is here again.
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