Evening star., 1950-12-10
Considers InfIution
A National Peril
Writer Blomes Keyserling
For Trumun's Injection
By Fronk R. Kent

What is happening abroad to our
military forces and in New York to our
diplomatic forces (to say nothing Of the
Attlee-T Truman conferences here) Is so
much more dramatic and colorful that
naturally they obscure what. Is happen
ing to our economic situation at home.
But they are not really more important.
For our military and diplomatic power
wholly depend upon our economic
strength and solidity. Dhat is basic.
Without economic strength there can be
neither military strength nor diplomatic
force. There are several other facts
accepted by reasonable men. One is that
imitation is perhaps the chief national
peril. Uncontrolled, it can be as devas-
tating as lost war. Uncontrolled, it
can lose a war.
Initiation cannot be successfully COM
bated by doing one of these things.
They all have to be done. And they
should be done at the beginning Of the
defense program, not in the middle and
certainly not after wages and prices
have begun really to soar. In brief.
delay can be ruinous. There has never
been denial of B. M. Baruch's Oft
repeated assertion that failure to face
the facts in the last war resulted in its
prolongation by six months at an addi-
tional cost of 500 billion and many
wholly unnecessary casualties. Last
summer these realities were so generally
accepted that before Congress adjourned
it not only gave Mr.. Truman everything
he asked with which to fight imitation
but some things, including the vital
power to regulate wages, for which he
had not asked at all.
Since then the administration has
played a double-faced game-ineffectu-
ally attempting to restrain imitation by
credit controls while directly encourag-
ing initiation by aiding wage boosts. In
consequence, wages have gone on a
rampage. Strike after strike has been
called. Raise after raise has been grant
ed. Time after time the Governments
weight has been on the labor side and
time after time industry has raised prices
to meet the wage boost, which is thus
passed on to the consumer, thereby di-
rectly promoting imitation. The result Is
that by the end of October prices had
reached their highest peak and the
cost of living had broken all records.
Why has Mr. Truman with full knowl-
power voted him to control the imitation
against which he so earnestly breaches?
Why has he let 9 billion be added to the
cost of his program? Why against all
reason and experience, has he permitted
himself to be persuaded that labor and
industry will voluntarily keep down
wages and profits? Why, with the costly
lessons of War and War II clearly be-
fore him. has he not acted? It is true
he has appointed long string Of mo-
bilizers and stabilizers. including wage
stabilizer. But, up to date, they have
not modified or stabilized anything at
all.
Nor, Judging from the way the new
wage stabilizer talks, are they likely to
stabilize anything for quite while. APP
parently he is not even sure wage con-
troll is necessary. It is fair to say that
in this uncertainty he reflects the ad-
ministration attitude, which in the field
of economics is anything but certain
about anything. What are the reasons
for this extremely costly uncertainty?
Those with the best foundation are, first,
that Mr.. Truman and his political ad-
viserS are still in such fear of the pro-
fesSional labor bosses with whom they
are politically linked that they dare not
take step to which they are opposed.
The second reason is the fancy argu-
ments of Leon Keyserling, chief of the
Presidents Council of Economic Advisers.
Though Mr.. Keyserling's views of the
current imitation problem are held by
exceedingly few recognized economists
and directly clash with those of Mr..
Baruch and practically every other man
of experience, he seems not only to have
impressed Mr.. Truman but to have swept
all the mobilizers and stabilizers off their
feet. Though their instinct is against
the Keyserling philosophy, they do not
know enough or cannot talk fast enough
to argue with him. Hence, in this great
national crisis we find ourselves being
economically directed by a man who
thinks the size of the debt is unimpor-
tant, that imitation can be controlled
without wage and price control that
non-defense expenditures should go up
and not down.