From 'Militant' Oct 15.
Oct 8 — President Kennedy, in his Aug 13 radio-TV speoch on the state of the U.S. economy, asserted that the July “economic indicators eeeee do not warrant the conclusion that we are entering a new recession". Kennedy's speech along with his July "economic indicators" was shortly tossed into the wastebasket of history. On Sept 21, a department of Commerce compilation of 17 key indicators for Aug. was publishing in Business Cycle Developmentse As Joseph A. Loftus of the New York Times so tactfully put it , the indivatoars were "somewhat less encouraging than they were a month earlier’. Wine pcinted down; seven; up} one remained unchanged. Among the nine pointing down were such key indicators as durable goods mamfacturers' orders, machinery and equipment orders and the average work week of manufacturing production workerse
On Sept. 30th, the New York Times published an economic survey of the 3rd quarter of 1962. The headlines read in part; ‘Jconomy mixed" and "Outlook Cloudy" and “Output Levels Off." In fact, the only bright note in the survey was the observation that " business so far has escaped a much-predicted recession oe That's like a doctor cheerfully telling a person expected to die within six months , " Well. you are still alive I see." Hardly anyone of repute in the field of economics has snedioted a recession before 1963. But hardly anyone of standing in this field - except direct mouthpieces of the Kennedy administration - will declare that there will not be a recession next year, starting quite likely with a post Xmas decline in January and February.
If some economists are reluctant to make their views public the reasons are threefold. First, some are really puzzlede ‘Second, some are afraid that pessimistic predictions may trigger an even speedier economic decline or a sharp stock market break of the proportions of last May and June. And third, there is fear of reprisal.
The last point is certainly one important reason why " few economists or business men are rushing out with firm predictions ," as pointed out by M.Jd. Rossant in his "View from the Fence," a special feattre in a financial section of today's New York Times. They recall only too well what happened to win Clague, long-time head of the U.S. Bureau of Labor Statistics, when he told a national gathering of experts in Atlantic City last June 19th that the historic trends and indicators signal a recession in 1963. The mild mannered and conservative Clague was immediately subjected to an insulting public rebuke by the then Secretary of Labour, Arthur Goldberg . Clague was compelled to make a humiliating public disavowal of his Atlantic City Statement. In today"s Times article, Rossant gives a very revealing example of the frame of mind of the professional economists dependent for their livelihood on the largesse business organisations, business controlled universities or the big-business government. . " , « « even in private,economists appear over cautious. An informal poll of ten economists revealed are expecting a decline in 1953 but do not think it prudent to say so. Another four admit that they are confused by economic indicators and have not made up their minds. One thinks the economy will show a rise over the next three quarters. And one took the view that a substantial cut in taxes will prevent 2 decline but doubted that congress will act unless confronted with a seriou: isterioration".
Im short, aut of the ten economists questioned, five expect a decline, although one sees the possibility of awoiding a recession through legislative action he does not expect Comgress to take, Four hesitate to give any opinion, which suggest; they are not prepared to rule out a recession. Thus, nine out of ten either foresee a recession or do not exclude it on the basis of the available economic statistics and trends. Rossant is troublel by what he calls the over cautious attitude of the ecomomists, He does not mean that they will not state their opinions openly but that they will not take a position in variance with the statistical evidence — that they will not say "up" when the data points "down", He complains that they are relying "on statistical indicators which are themselves fallible". And this" can. lead to error", But Rossant has to concede thay if the indicators are right, “then the so-called standard forecast, the one that most economists will except is likely to call for a gradual topping out of the rise followed by decline,"
Well, if Rossant is seeking positive optimism in spite of the statistical evidence, I suggest he button-holes almost any one in the Kennedy's administration's hire ¢ ‘But Rossant discounts the reliability even of Dr. Walter W. Heller, " the Administration's chief economic profit. ". Rossant observes acidly : " For who ever heard of a government official forecasting a recession before it actually ,occurs? ", 3 to be continued next week.