Evening star., 1961-02-03
Nh. Kennedy's Goals

SNOe N/ sS
The Presidents economic message,
although it deals with more than dozen
matters, still is limited in scope. It
leaves for future presentation the details
Of several Of the most important pro-
poSals he has in mind, and any appraisal
Of them must await the messages which
will be forthcoming.
This first message in its main thrust
is concerned, and rightly so, with meas
ures Ito alleviate the distress" of people
caught in what Mr.. Kennedy calls the
unsatisfactory performance of the
economy" In this category there are
two principal recommendations-a tenn
porary 13-week extension Of unemploy-
ment compensation payments, to be
paid for by employers, and liberaliza-
ton beginning April Of social security
benefits, with the cost to be met through
an increase Of "a Of per cent starting
January l, 1858, in the tax levied on both
employers and employees. These will be
supplemented by other relatively minor
programs, most of which can be initiated
by the President without congressional
action. In some of its other aspects
the message is designed to stimulate
economic recovery and growth" the
major specific recommendation calling
for an increase in the minimum wage to
SIPS an hour within two years. The
merit Of some Of these proposals may be
debatable, and we assume they will be
carefully Scrutinized on Capitol Hill.
There is no doubt, however, that the
distress is real in the depressed areas,
and we think Congress should cooperate
with the President in all sensible efforts
to help these people. b.,
One effect Of this message Is to
convey an impression Of a Chief
Executive who is deeply concerned with
the state Of our economy and equally
sympathetic with the plight of millions
OF people who are suffering as a result
Of the recession. Both the concern and
the sympathy are genuine, and If the
result is to inspire confidence that the
President intends to use the great powers
Of his off1ce and the vast resources of
the Government in constructive effort
to relieve distress and stimulate the
economy the psychological impact should
be beneficial.
In the long run, however, something
more will be needed-n1ore than is pro-
posed in Mr.. Kennedy's message. The
real problem Is not how to pull out Of
this recession. We have no doubt that
this can and will be done. But what
about the years ahead?
Mr.. Kennedy says that "the failure to
use our full capacity is the urgent eco
nomic problem of the day." Perhaps so.
But why Is it that so much Of our indus
trial capacity-in steel, automobiles, ap-
pliances, etc.,-lies idle? No one planned i
it this way. The steel makers and the
others would be operating at full
capacity except for one thing: there are
not enough customers, not enough
demand, for their products. And it
would be senseless for them to produce
automobiles and refrigerators which
they could not sell. Certainly we do not
want to duplicate in industry the expe-
rience in agriculture, and fnd ourselves
with warehouses loaded with consumer
goods (which must be carried at tax
payer expense.
An easy answer is that an upturn
in the economy, with increased buying
power and greater consumer demand,
would solve the problem. We doubt
that this would be true, however, in an
economy in which our industrial plant
was operating at full capacity. And it
would be- still less true in the years to
come, for our labor force, according to
Mr.. Kennedy, is rising by is per cent a
year and output per man is increasing
annually by per cent. In 10 years Of
full production with high prices our
Industrial output would overwhelm us.
Mr.. Kennedy touched upon the
answer when he said that industry needs
more customers. But what industry
actually needs is more customers who
can afford to buy its products-not only
customers in the United States but
around the world. And this in turn calls
for price stability or even lower prices.
We cannot hope to sell in the market
place unless our prices are competitive.
The great need is to reduce produc-
ton costs and do away with feather
bedding and other wasteful make-work
practices. The President dealt gingerly,
If at all, with these things. But we will
never achieve our "full Industrial po-
tential" unless and until something
effective is done about them.
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