Limping from Crisis to Crisis

...There is little point, however, in quibbling with Burns, for he alone among President Nixon's principal economic advisers seems to have recognized the need for doing something more about the na- tion's economic crisis than wistfully wishing it would go away...

...The Progressive is not wedded to the simplistic notion of "balanced" Feder- al budgets...

...Now, more than a year later, Mr...

...For the first time, he acknowledged that it might be necessary to go further and impose mandatory controls...

...What Burns was trying to tell the Joint Economic Committee was that America's "market economy" is not performing as conventional wisdom holds it should...

...According to Com- merce Secretary Maurice Stans, if the current trend continues, this year may be the first since 1893 in which the United States did not enjoy a trade surplus...

...A similar response might be made to the recent comment by Arthur F. Burns, chairman of the Federal Reserve Board, that "the rules of economics are not working in quite the way they used to...

...Ac- cording to the latest available figures, 1.3 million job-seeking Americans have been unemployed for fifteen weeks or longer...

...Burns was consigned to the White House dog- house, and Presidential aides were do- ing their best to discredit him and his views until their chief did an about- face in mid-August...

...It can be argued that the "market economy" has been a myth for at least a century—that the growth of giant corporate monopolies and, later, of huge and powerful labor unions has long since made a mockery of text- book notions of "free enterprise" and the automatic operation of the law of "supply and demand...

...It is typical of this Administration's bizarre sense of values that it should propose a new constella- tion of welfare benefits for business, even while deferring its scheme of wel- fare reform for the poor...

...What brought the conservative Burns to this radical (for him) per- spective was the realization that the economy was in far deeper trouble than could be dispelled by Mr...

...Nixon has tardily embraced some of the short-run proposals urged on him for so long...

...A steel wage settlement which the Adminis- tration publicly criticized and privately encouraged produced an immediate eight per cent price increase by steel-' makers...

...After a period of decline, interest rates took a new up- ward turn...

...Wholesale in- dustrial prices for July climbed at the fastest rate in fifteen years...

...The PROGRESSIVE "you shall know the truth and the truth shall make you free" Limping from Crisis to Crisis When readers of The New Yorker used to complain that the mag- azine was not so good as it once had been, the late Harold Ross would re- ply, "It never was...

...11 The Federal budget for fiscal 1971, which President Nixon once promised to "balance," turned out to have a deficit of $23.2 billion—the sec- ond highest since World War II...

...They never did...

...So long as America's economic se- curity depends on production for waste and war, so long as the Government's best efforts are devoted to the protec- tion of private rather than public in- terests, the economy is bound to limp from one crisis to the next...

...He said he saw "very little progress as yet" under the President's economic Game Plan, and renewed his call for an "incomes policy" of volun- tary restraints on prices and wages...

...The Pres- ident, clearly, has not yet learned that lesson...

...Automobile manufacturers an- nounced substantial price jumps for the new model year...

...The Administration, through its huckster-in-chief on economic is- sues, Treasury Secretary John Connal- ly, has begun to back away from its proclaimed goal of reducing unem- ployment to the "full employment" level of four per cent...

...It may be, indeed, that a tax reduction or a higher level of spending would provide the needed stimulant to the economy, even at the cost of a larger deficit...

...In the background of the dreary economic statistics is the reality of twenty mil- lion Americans who continue to live lives of desperate poverty, and at least thirty million more who barely cling to the frayed edgesN of this affluent soci- ety...

...The rate for women, young people, and racial minorities is, as always, substantially higher...

...Perhaps it can be taught him in next year's electoral campaign...

...Vast sums continue to be squandered on the In- dochina war and the insane arms race while the nation's most pressing do- mestic needs are unattended...

...Consider these facts: K The unemployment rate stood at 5.8 per cent in July, and was not ex- pected to drop significantly in the months to come...

...f A foreign trade crisis has gener- ated new pressures for devaluation of the dollar...

...For the current fiscal year, a deficit rang- ing upwards from $25 billion is projected...

...What is de- pressing and deplorable about the Nix- on deficit is that it has produced so lit- tle for the American people...

...fl After seven months of sluggish improvement, the twelve "leading in- dicators" of future economic activity have turned downward again, prompt- ing one former Nixon economic ad- viser to predict that the United States "may be entering a growth recession soon after recovering from a classical recession...

...Under "the rules" to which he referred, economic stagna- tion and high unemployment should, by now, have broken the inflationary spiral or, conversely, persistent infla- tion should have produced more jobs and a dynamic economy...

...and for the long haul, the reversal of our national priorities to finance not token but meaningful programs in the fields of housing, health, job training, recreation, and conservation—to be financed by steep- ly reduced expenditures for military hardware...

...At the same time, his "new economic policy" reaffirms the Pres- ident's indifference to the distortion of long-run priorities...

...Fourteen months ago in this space, The Progressive observed: "It grows increasingly urgent that the fundamen- tal elements of Nixon Administration policies be changed if the nation is to avoid a long-drawn-out spell of con- tinuing inflationary pressures, rising unemployment, and neglect of critical social problems...

...The same editorial called for "an end of Nixonian laissez- faire economics and the substitution of an affirmative program whose princi- pal ingredients, for the short run, would be curbs on prices, profits, and wages, and a public job program to cope with the mounting threat of un- employment...

...Nixon's cheery assurances that 1971 will turn out to be "a good year" and 1972 "a very good year...

...Burns obviously didn't see it that way, and there was no reason why he should...

...In the quarter ending June 30, the value of American imports ex- ceeded exports by more than $800 mil- lion—the largest quarterly deficit since World War II...

...In my judgment, and in the judg- ment of the Board as a whole," Burns testified, "the present inflation in the midst of substantial unemployment poses a problem that traditional mon- etary and fiscal remedies cannot solve as quickly as the national interest de- mands...

...Last month every major price in- dicator provided evidence that infla- tion was getting worse...