Masonry Magazine May 1969 Page. 20
Washington Wire
Potential buyers are thinking of tucking away bonds before yields go down. Don't expect rates to plummet, though. The Federal Reserve will keep money tight for quite awhile to make sure that inflation really is diminishing. Besides, lower rates will prompt many who waited for a decline to try to borrow now.
HOME-BUILDING WILL SEE LITTLE NEW DAMPING IMPACT from tight money that's the latest appraisal being put forth by government housing experts. Their size-up is one of the reasons why economists do not fear a recession. Housing starts declined in the first quarter from 1.7 million-a-year rate to 1.5 million-plus. And the pace could decline 100,000 more this spring. But that will be considerably above the 880,000 level of the 1966 crisis. What's more, the rate could well be picking up once again during the summer. The experts feel the mortgage flow will stay large because: Incomes are still rising rapidly and saving remains high. A dull stock market fosters holding cash in savings accounts. Special certificate accounts and other bonus-rate schemes are attractive to savers and help discourage withdrawals. Rate limits keep banks from luring funds from home-lenders. Federal agencies are providing funds for making mortgages.
A PROGRAM TO BRAKE RUNAWAY WAGE HIKES in building is being pushed by contractor groups. On the theory that high labor costs may be more of a threat to housing than tight money, they want White House blessings for a national labor agreement that would submit out-sized union wage demands to arbitration. Strikes and lockouts would be banned under the agreement. Administration officials are sympathetic on anti-inflation grounds. But the unions won't tolerate the idea and this means that its chances are not bright over the near future.
DEFENSE SPENDING IS HEADED FOR SLASHES bigger than those requested by the President as part of his revised Budget for the coming fiscal year. Nixon pared $1.1 billion. But Congressional leaders say this isn't enough. It is not just liberals who want to use this axe. Senator Leader Mansfield wants to chop $5 billion from the projected total of $79 billion in outlay. Chairman Wilbur Mills of the House Ways and Means Committee shares the aim. This could be a difficult year for defense suppliers even if President Nixon finally persuades Congress to go along with his plan to deploy the Anti-Ballistic Missile system.
THE KEY U.S. REGULATORY AGENCIES WILL HAVE A NEW LOOK by year-end. The Nixon Administration is waiting very impatiently to revamp these bodies with Republican majorities to replace all Democrats whose terms run out. The Federal Trade Power and Tariff Commissions will be GOP-run by fall. A more conservative tone seems likely to prevail after the change-overs have been made. Businessmen could find that they will get more sympathetic hearings on their problems.
NIXON HAS MADE A BASIC DECISION TO WITHDRAW TROOPS from Viet Nam and get on with ending the war. That's the underlying fact to remember, despite the on-again, off-again stories that come out of Washington. Officials in position to know are quite emphatic about this. They say that the denials issued from time to time are only diplomatic maneuvers, necessary to avoid damaging America's bargaining position at the talks in Paris. Nixon's key advisors know that he has only a few more months left to show some results. American boys will come home this year whether Hanoi agrees to scale down or not. The U.S. will step up arms shipments to Saigon, building up the present government for the final showdown with the Viet Cong. This will put pressure on the Reds to bargain. And it will permit the U.S. withdrawals.
NIXON HAS WON HIS FIRST SKIRMISHES with the Democratic Congress. They haven't been of great significance in themselves cutting commitments on education from 5 years ahead to 2 to let him evolve his own policies. And the President headed off efforts to reverse his cut in Job Corps camps. Note, too, that Nixon will get most of the credit for pushing tax reform even though he was first uninterested and the House had done a lot of work. He has simply outmaneuvered his liberal opposition in a very skillful manner. The momentum he now enjoys could carry him through to other legislative victories later on this year.
THE NIXON TEAM IS ALREADY THINKING OF THE NEXT CAMPAIGN in 1972. They are playing politics in areas that do not effect security or Viet Nam. Republican strategists are assuming that Teddy Kennedy will be the candidate that Nixon will have to oppose. They would not mind seeing him inhibited, and unable to maintain a good image. Thus, he'd be a much weaker candidate. The opening gun in this program was Senator Dirksen's take-over of Kennedy's hearings on the Administration's civil-rights policy. Dirksen depicted the probe as a political ploy. Other Republicans are ready to attack Kennedy again.
NEGOTIATED WAGE INCREASES SOAR
Negotiated wage increases for all industries soared to a new high of 19.8 cents an hour in the first quarter of 1969, 4.5 cents higher than the corresponding period in 1968, and 6.9 cents above first-quarter 1967, according to an analysis of 730 contract settlements by The Bureau of National Affairs, Inc. (BNA). Among manufacturing settlements studied by BNA, the