Masonry Magazine May 1971 Page. 16
Washington Wire
Credit demands have not begun to increase as yet in any major way. But the money controllers at the Federal Reserve have moved to decelerate the rise in the money supply they encouraged earlier, to stimulate business. They do not want to choke off an economic upturn by denying required credit. But they do not want to over-liquify the economy, either.
FEAR OF A NEW BOOM AND OF TIGHTER MONEY has sent bond rates up from the lows to which they fell earlier in the year. Expectations, alone, have led numerous borrowers to rush to borrow. Investors have been discouraged. But mortgage rates need not rise soon. There is plenty of savings around.
JANUARY 8-12, 1972
MCAA
CONVENTION & SHOW
at the Americana
Bal Harbour, Fla.
THE WHITE HOUSE IS DEFERRING DECISIONS ABOUT TAX CUTS at this time. Officials think improving business activity may make reductions unnecessary. They are inclined to bet that the upturn will gain momentum during the year and wouldn't want to stimulate just as a new inflationary surge is starting. Besides, Congress is certain to vote more spending than Nixon has proposed. Heavier government outlays stimulate the economy just as lower taxes can.
Consumer buying is expected to grow without new tax cuts. Retroactive hikes in Social Security benefits will go into effect in June. Military pay is set to go at mid-year.
Administration officials are still working on tax changes, just in case they are needed. If their economic forecasts prove inaccurate, officials may be forced into new action.
BIG RISES IN CONSTRUCTION WAGES MAY REALLY BE CURBED by the actions recently ordered by the President-those review boards he has established. The imposition of wage-price guidelines could result in smaller wage gains, though probably not as much smaller as White House officials are claiming. Labor experts don't think the boards can hold wage increases to 6% a year. That is too little to expect labor to accept after receiving 18% increases.
Nevertheless, experts cite these prospects for success:
* The unions will cooperate despite their initial protest.
* Settlements may be held down by union leaders on the boards.
* A number of other weapons are available if the plan fails. So, smaller settlements in the 9% to 10% range-are possible; and even 10% packages would represent a major improvement.
THE UNEMPLOYMENT RATE COULD CLIMB STILL HIGHER in the months ahead. The jobless figure may yet increase by as much as a half percentage point. By fall, it will begin moving down. But the drop could prove to be slow. History points to lags in new hiring once business begins to strengthen. This time, the response to the quickening tempo may be slower than usual. Reason: The expansion just getting under way now is likely to be sluggish.
More students will want work this summer (to pay pay for higher school costs) and the armed forces will be reduced. Rising productivity means more products from the same work force. Fewer new jobs mean a brake on income rises and on buying.
CONGRESS APPEARS LIKELY TO INCREASE MINIMUM WAGES for many employees this year. House Democrats want to raise the floor for 9 million workers from $1.60 to $2.00 an hour... and from $1.30 to $1.60 for workers on farms. The Nixon Administration hasn't taken a firm position on the pending bills.
But House Ways and Means Chairman Mills supports the proposal. He feels it will boost the economy through higher spending. He feels it would also reduce U.S. assistance to low-income families. But it can raise industry's cost substantially. So there'll be opposition from business and the President.
MORE STRESS ON PRODUCTS' RELIABILITY IS DUE from the Federal Trade Commission. Officials say there'll be more activity aimed at faulty design. Priority will go to cases where firms allegedly limit items' useful lives, either by phasing out a line or by limiting replacement-part availability. It believes such policies are deliberate attempts to control production... or to tamper with the price mechanism. Federal law prohibits both actions.
The Commission is also very concerned about "durability obsolescence." It says some firms intentionally include inferior minor parts in products. Officials feel that better parts do not add much to the expense of final products, but could give consumers a more equal shake.
TIGHTER SAFETY STANDARDS WILL SOON BE SET by the Labor Department. Almost every workplace in the U.S. is now covered many for the first time. The initial set of safety rules will be based on those for government work. They will be followed by other standards-adopted after prolonged hearings.
Federal inspectors will begin checks on individual plant safety soon. The pressures won't be great in 1971 because the number of checkers is small. But it will build over the next few years as additional inspectors are put to work.
HOW LONG MUST RECORDS BE KEPT to comply with Federal laws and rules? You can learn from the official "Guide to Record Retention Requirements." The 1971 edition of this standard reference work has just been published. Included are all the facts on the records to be kept, who must keep them, and how long they must be held. Law governing each agency is also cited.
The Guide is available now for $1.00 from the Superintendent of Documents, Government Printing Office, Washington 20402.