Show Voice of business Showbiz and the committee to fight Sight inflation By Dy Arch Booth president of or orthe the Chamber of or Commerce of the United States Since my walkout from the first meeting of President Fords Ford's Citizens Action Committee to Fight Inflation was widely reported and In some cases very badly reported and since I continue to support the Presidents President's recommendations for curbing inflation a few words of explanation are in order The Committees Committee's idea of fighting inflation is to ask businessmen to sign pledges not notto notto notto to raise prices more than costs and wages require and to ask consumers to sign pledges notto not notto notto to shop at stores that do not comply Businessmen who sign the pledge get to display a WIN flag The Committee likes flags and buttons and other PR paraphernalia Mv My Objections I have two objections to this approach First it is not even- even handed President Ford called for restraint by both business and labor But the Committee mentioned only business When I asked about this absurd omission I was told that it had been decided not to include labor Exactly who made that decision was not explained Second and much more important the Committees Committee's program is based on a false theory of inflation Neither business nor labor causes inflation inflation in In- nation Inflation is caused when the supply of money Increases faster than the supply of goods and services And it is federal deficit spending that causes the money supply to increase too loo rapidly SHIFTING PUBLIC attention to business creates a smokescreen for the politicians to hide behind Since price increases are the most visible symptom of inflation people who dont don't have any background in economics economies are understandably understandably understandably un un- led to the conclusion conclusion conclusion con con- that the increases are a cause rather than an effect Further the local vigilante groups designated to enforce compliance with the pledge are unlikely to have the skills required to judge whether a given price increase really is justified by cost increases or perhaps by something else Therefore their activities are quite likely to lead to misunderstanding misunderstanding misun misun- and injustice or at best to nothing but a lot of wasted effort My l Departure All of this I tried to explain to the Committee The explanation was quickly brushed aside I reiterated my support of the rest of ot the Presidents President's program But I f said that if all the Committee intended to do was create buttons banners and vigilantes I didn't think I could contribute to it and I might as well leave Russell Freeburg the representative from the Whitehouse White While WhiteHouse House staff said I 1 think it would be a good thing if you do leave So I did INFLATION can be controlled by sound monetary and fiscal Ciscal policies at the federal level by steps to increase the nations nation's productive capacity by removing roadblocks to efficiency by stimulating market competition and by breaking worldwide supply bottlenecks These things are the heart of President Fords Ford's program I support it when he announced it And I still do So does the National Chamber But inflation is too grave and too loo complex a problem to be treated like showbiz I believe cooler heads on the White House staff realize this For that reason I intend to remain on the Committee to make it clear that Americas America's business community is solidly behind any serious effort to stabilize our troubled economy |