Masonry Magazine July 1968 Page. 12
Washington Wire
(Continued from page 11)
The fourth quarter could see GNP rise at a $10-$12 billion annual rate. And it could fall below $10 billion in 1969. With prices still rising, "real" GNP growth would be small.
PRICES WILL SHOOT UP LESS RAPIDLY
as the second half moves along. They will still continue to climb inflation simply has too much momentum. Labor leaders, for example, can't settle for less than 6% in wage boosts. But cooled-off demand especially of materials could level out the trend in industrial wholesale prices while good weather could put farm prices down.
The mounting climb in consumer prices will decelerate, too, from the present 4% a year rate, to, say, a 212% annual rise.
INTEREST RATES WILL MOVE DOWN SOME,
as a result of the surtax-though perhaps slowly at first. The Federal Reserve Board will be able to relax its grip on bank credit. More important, though, borrowers will need less. Treasury needs have been sharply reduced by the tax hike and spending cuts. Corporate needs for cash will shrink by fall as the business tempo slows.
Mortgage rates may respond only slightly to the brighter forecast in coming months. They always tend to lag behind. But bond yields could fall considerably maybe a half-point. Bank loans may become easier to get in time at lower rates.
THE BALANCE OF PAYMENTS SITUATION
WILL IMPROVE enough to satisfy dollar-holders in Europe and elsewhere. The rush of imports will slow down and American-made goods will become more competitive in overseas markets. Increased confidence in the U.S. will help protect our stockpile of gold.
THE SECOND-HALF HOUSING SLOWDOWN
WILL BE MILDER than had been feared. Before the tax hike, mortgages had become unattractive to investors. Tight money was hurting the savings institutions. They are less inclined to lend. Now, home purchasers and builders will again find mortgage money available. The lingering effects of tight credit will take their toll. But housing starts might be showing a 1.4 million annual rate at year's end-instead of the 1.2 million predicted earlier.
CONGRESS ISN'T GOING TO TAKE THE LID
OFF TRADE with Eastern Europe, despite urgent pleas from the President. Johnson sees a great opportunity to build bridges Eastward and to drive a wedge between the satellite nations and Moscow. The extra trade could create jobs, too, and help the dollar. Congress, however, has clamped new restrictions on financing arrangements to "bloc" countries. Only Yugoslavia can now qualify for U.S.-backed loans.
Opponents argue that we are exporting stratgic materials and know-how. The Communist nations will use our computers and other technology to close the economic gap with America. Even foodstuff exports can threaten our security, they say.
THE MUCH-BALLYHOOED PROTECTIONIST DRIVE OF 1968
has run out of time. Producers of a long list of commodities-steel, textiles, oil, shoes, beef, furs, strawberries, etc. were seeking protection from import competition. They, and sympathetic Congressmen, have plugged for tight quota legislation.
The protectionists are opposed by firms with big exports aircraft, farm machinery, computers-and wheat ranchers who fear retaliation on their sales in foreign countries. The White House is hostile, too, for trade balance reasons.
However, the quota hearings have only just ended, and leaders won't schedule anything but pressing bills appropriations before quitting in time for the August political conventions.
GO SLOW IN BUYING ADVERTISING
from the "Union-sponsored" newspapers that have sprung up recently. Many are phonies rackets, pure and simple. They solicit advertising from business firms and hint at favors in return. But they have no connection with legitimate labor unions or publications.
The AFL-CIO is attempting to warn employers and the public of this spreading racket. It suggests that business check with their local labor Council before agreeing to buy space.
IT'S LOOKING MORE AND MORE LIKE A REPUBLICAN YEAR.
That's the trend political professionals see, now that the campaign is due to begin in earnest. "Anti-incumbency" sentiment appears to be on the rise a boost for the GOP. And some observers see a shift to the conservative side across the nation.
Law-and-order has replaced Vietnam as the Number One issue. Urban unrest is a drawback for Democrats and their solutions.
HUBERT HUMPHREY WILL HAVE AN UP-HILL FIGHT,
as the Democrat candidate. Some polls still show him running well ahead of both Nixon and Rockefeller. But his staff fears Kennedy and McCarthy people will stay home in November. Any apathy among Democratic rank-and-file could bring other losses as well. Democrats in Congress and the state legislatures are seriously threatened.
Humphrey has far more problems than LBJ did in the 1964 race. Neither of his opponents can be labeled an "extremist," the way Johnson tagged Barry Goldwater in 1964. Both Nixon and Rockefeller are squarely middle-of-the-road. And Humphrey is hemmed in by his consistent support of Johnson's Vietnam policy.
masonry • July, 1968