Masonry Magazine March 1968 Page. 16
Washington Wire
DIRECT PRICE, WAGE, AND CREDIT CONTROLS SEEM UNLIKELY in Washington. They would be even more unpalatable to voters than the unpopular tax bill. And many economists consider this cure worse than the disease-inflation. Controls interfere with the efficient working of the economy. they are hard to administer.and they also encourage evasion and disrespect for the law.
Significantly, there are no programs being drafted by the White House for submission to Congress, at least as far as checks around the Capitol can show. This loads the task of checking inflationary pressures onto the Federal Reserve.
THE FEDERAL RESERVE SYSTEM IS ALREADY MOVING TO CURB CREDIT again. So far the impact of its moves has been moderate but it will get rougher. As the main bulwalk against inflation, the credit-controllers are now set to hold down money-supply growth even if it means slowing home-building and pushing interest rates up. A big drop in rates this year is unlikely.
Some housing experts think that the tighter money will cost the nation between 100,000 and 200,000 in new homes that will go unbuilt during 1968. (Yields on bonds conceivably could climb even higher than the peaks reached last fall.)
A housing slow-up will quickly affect other industries. Each house start lost will wipe out two man-years of employment. Materials suppliers of lumber, especially will be hit even harder. Sales of appliances will inevitably be hurt, too- especially built-in items like ovens, washers, and bathtubs.
PRODUCTIVITY MAY BE RISING MORE RAPIDLY these days than originally expected, according to the calculations of some economists. The high-level activity in autos, steel and related lines permits the spreading of overhead expenses and the reduction of unit labor costs. The current improvement may be temporary. For now, though, it may contribute to better profit margins.
THE PRESIDENT'S INDUSTRIAL SAFETY BILL MAY SUPPLY the big surprise in labor legislation this year. It may prove to be very broad-and costly. As proposed, the bill can set standards for as many as 50 million workers. The Federal government would simply move in to specify safe work practices. Stiff penalties are provided. But, with early administrative costs small, Congress will find it hard to resist the political appeal of the measure.
Industry and the states are not likely to welcome this new threat of Federal interference. As a result, prospects of passage are not considered bright for more than part of the Administrative package-and then in a watered-down version.
JOHNSON'S "CRISIS OF THE CITIES" PLAN FACES PROBLEMS with Congress.
Some portions will get through in this session with little or no trouble. They have wide supporte.g., lifting the 6% ceiling on VA-FHA mortgages. But important Congressmen question the financing of another new proposal. The lawmakers fear that the privately owned mortgage pools, to be set up to spread risk among investors, will siphon money from business borrowers. Any increase in competition for funds would increase interest rates, too.
There is also deep-seated hostility to Great Society programs such as model cities and rent supplements-pared last year.
ONE FEATURE OF JOHNSON'S URBAN MESSAGE IS RECEIVING wide approval.
A re-insurance company is proposed to underwrite losses from urban riots. Businessmen in the "center city" face rising rates because of ghetto unrest. The Federal help will permit private insurers to keep premiums reasonable.
Here's the outlook for other legislation facing the Congress:
-Crime Prevention-The Senate will build on the riot control provisions of the House-passed version and could add new restrictions on firearms use and electronic eavesdropping.
-Congressional Ethics Both houses of Congress can be expected to adopt new "Codes of Standards and Conduct", right in time to meet their opponent's accusations in the upcoming election.
-Tax Reform-The Treasury wants hearings on a bill after the surtax is disposed of, but chances are diminishing for any action in this complex and controversial area in this session.
-Imports Quota limitations for products from strawberries to steel have been placed in the hopper. Import quotas on foreign textiles and beef are the most likely to be imposed.
-Savings Institutions-Battle lines are forming in the House on legislation to merge savings and loan institutions and mutual savings banks. The outcome is definitely in doubt.
IT'S NIXON VS. NELSON ROCKEFELLER now for the Republican nomination.
Rockefeller is the only hope of the GOP moderates with Romney dropping out. Political pros feel that the garbage strike was only a temporary setback. But the New York Governor can no longer remain aloof from the hard issues crime in the cities, government spending, public welfare-and Viet Nam.
Is Rockefeller surfacing too late to built his Convention bloc? Nixon has the momentum-and the country courthouse delegates. And Reagan supporters are waiting in the wings for a standoff.