Masonry Magazine March 1966 Page. 14
The Washington Wire
(Continued from page 13)
victory is not the goal. The aim is to stabilize a military position as a base for bargaining when the time arrives. More troops are going abroad, and more money will go for economic aid. But the build-up rate will top out late in 66 under present plants, if the war is kept limited. (There is no assurance that it can be.)
Business activity could reflect this. It would move up more slowly. Later gains would be smaller-assuming no war with China. Business is getting extra stimulation from the expectations of bigger orders as foreshadowed in the Budget. This shows in the big inventory jumps and the credit demand.
The impact of the expectations may well start lessening this summer. They have a one-shot effect. The economy adjusts and shows some slack if no new stimulus appears. And new capacity is coming on stream to ease supply strains. This is a possibility to remember as the boom rolls on this spring.
DELIVERY LAGS ARE GOING TO LENGTHEN STILL FURTHER in the months to come, during the period of boom before the crest may be reached. The lags have been growing in some lines for over a year-in machinery, for example. Now they are spreading. Buyers must wait longer for steel, components, etc. Lack of trained labor is one reason. The deluge of new orders is another. The effort to build up inventory reflects a desire to insure against delays.
American firms are losing business to foreign imports because of delays in delivering. This is an old story for aluminum, steel, and electronics. But the list will lengthen if U.S. plants can't fill domestic orders fast. Foreign producers are now stepping up shipments of TV sets, auto parts, etc. Federal officials warn that lost sales may mean lost markets.
ECONOMISTS ARE TURNING A BIT LESS OPTIMISTIC ABOUT PROFITS IN 1966. The vague doubts and fears of recent months have now begun to crystallize. Few look for a decline. But gains will lag behind last year's whopping 18%, despite the records in production and employment that are being set monthly.
What are the reasons for the questioning?
-Higher costs of wages and materials rank high on the list.
-Resistance by Johnson keeps selling prices from catching up.
-Payroll taxes rose January 1, adding $2½ billion to costs.
-Productivity will go up slowly as more lines near capacity. And any tax increases will leave still less for dividends.
FEDERAL FARM EXPERTS ARE FORECASTING A WORLD FAMINE in the 1970's if food production doesn't expand and the population surge doesn't slow up. It could be the worst disaster in history. Millions could starve to death. And the odds on its happening are high. The poorer countries are achieving progress that's completely inadequate on the food and birth-control fronts.
American farmers will be asked to help meet the needs to go all out in stepping up production of feed grains and oils. They will enjoy unprecedented prosperity as a consequence. The U.S. fertilizer industry will experience a big boom, too. So will the companies that can build plants abroad. The use of fertilizer is the quickest way to boost food output.
PATENTS MAY BE HARDER TO OBTAIN in the future, as a result of decisions just handed down by the Supreme Court in some landmark cases. The Justices said in effect that Patent Office examiners were too free in deciding what is a really new or patentable "invention."
The law sets up three tests for patentability-newness, usefulness and obvious improvement over prior inventions. The High Court, apparently, has a stricter idea of what is new.
As technology progresses, and more research and development work is done, more things may be proposed for patenting. But this may mean that it is harder to show that any one item is obviously a major improvement over existing inventions. So, inventors will have a tough time getting patents validated by the Courts. And examiners will take their cue accordingly.
DEMOCRATIS LEADERS ARE GROWING NERVOUS over the November elections. They are increasingly resigning themselves to heavy losses of House seats. A drop of 30 seats is widely conceded. Some fear a loss of 40 or even 50. This is a big switch from last autumn, when the President was riding high, on the crest of his long list of Great Society successes with Congress.
-Unhappiness over Viet Nam is the key cause for the concern.
-Labor's dissatisfaction with Johnson could cut its support.
-The jumps in prices are upsetting the rank-and-file voters.
A MAJOR ELECTION SETBACK WOULD SHAKE JOHNSON'S CONTROL OF CONGRESS. His 196. score was as much the result of the big House majority as his skill in handling lawmakers. With his edge cut to a pre-1964 level, he would face trouble getting present Great Society programs extended or new ones going. Johnson might have a stalemate like that which plagued President Kennedy.