Masonry Magazine May 1970 Page. 24
Washington Wire
production. And the auto workers are hinting at demands so huge for next September that a strike-perhaps against General Motors-looks increasingly likely. Meanwhile, wage packages that feature gains of 10% are becoming more common as labor attempts to catch up with the cost of living and discount new inflation.
"REFLESSION" IS A RECENTLY-COINED WASHINGTON TERM being used to tag the conflicting trends and the frustration that characterize the situation in the economy at this time. (You could be hearing it around fairly often in the months ahead, if that second-half pick-up turns out to be sluggish.) It is one-half recession, one-half inflation-with the worst parts of both. The term may get as popular as "mini-recession" or "rolling readjustment."
The implication for corporate profits is not bright. Sales may increase. But much of the gain will represent increased prices, not more volume. Then, too, big increases in plant capacity will keep prices from rising as rapidly as costs.
CORPORATE PROFITS AREN'T LIKELY TO PICK UP MUCH even late in 1970. They were down over 8% (before taxes) from a year ago in the first quarter. Chances are that earnings will slip a bit more this quarter, too, as costs rise further, before increasing sales can do much to fatten gross receipts. The second half will see earnings in a range from flat to slightly higher.
PRESIDENT NIXON IS MOVING TOWARD A "JAWBONING" CAMPAIGN to persuade labor and industry to slow the wage-price spiral. Nixon has tried to avoid such interference, but is under pressure to do something against inflation. His advisers will call his intervention "moral suasion"-a much nicer term. They believe it will have a worthwhile impact especially at the beginning.
Price and wage controls are not getting consideration at the Capitol these days. The Administration-excepting Secretary Romney of Housing and Urban Development-detests the idea. Labor won't go along until it has "caught up" with the cost of living. And the public is thought to be in no mood to go along. Credit controls would be called for before price-wage lids-but even these are now regarded with extreme distaste.
HOME-BUILDING WILL NOT PICK UP VERY MUCH THIS YEAR, if the upturn in business ends the move to easier money. Recent gains in housing starts were slight. There would have to be a substantial flow of mortgage funds to speed up the tempo. Banks and other savings institutions are receiving better inflows, but an end to easing would mean another bad housing year. Some experts see less housing units begun this year than in '69-1,300,000.
Other types of construction are expected to do well, because of the huge demands for highways, anti-pollution projects, mass transit, etc.-heavily assisted with Federal money. The President recently unfroze some fund grants to the states.
CONGRESS WILL PASS ONLY "SELECTED" ITEMS OF LEGISLATION between now and adjournment. Politics is a key reason. The Democrats have decided after the Supreme Court defeats that it is safe to oppose the President. They will allow action on only the Nixon programs with wide public support. And they will try to put a more liberal stamp on other Nixon legislation.
Here is the outlook for some key Nixon proposals:
-Postal modernization looks promising, now that he has cut his request for an increase in the first-class rate to 84 and plans to let mailmen remain as government employees.
-Anti-crime bills will pass but only part of the package.
Occupational safety: Some bill is given a strong chance of being voted this session. It is likely to fall somewhere between the tough bill being pushed by liberal Democrats, with union support, and the milder version the White House is sponsoring with backing from many business organizations.
-Tariff protection may be held in abeyance until later in the session, to keep pressure on Japan to accept suitable voluntary textile quotas. Even if Congress should enact a textile limit, few other items would get similar relief.
Form North Texas Contractors Association
In a positive step to halt inflation in the nation's largest industry, construction, more than 100 contractors throughout North Texas have organized to form the North Texas Contractors Association. The association is the nation's first construction industry organization with broad powers of collective bargaining on a regional scale on behalf of member contractors.
Membership includes contractors in every phase and type of construction from high rise buildings to commercial buildings and industrial plants.
A total of 115 different firms were represented at the initial organizational meeting this week, and directors expect membership to exceed 200 within the very near future.
Jurisdictional area of the association will vary according to the size and area of trade unions with which the group will be negotiating.
Generally, 22 counties are involved ranging from Navarro County in the South through Erath, Somervell and Johnson Counties; through Jack, Palo Pinto and Montague Counties on the West, and Northeast to Fannin County.
Types of contractors represented by the association include general, mechanical, plastering, masonry, accoustical and drywall, floor covering and other types of construction firms.