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Show Economic Forecast Everyone would like to soe a depression-proof economy. eco-nomy. All major groups business, labor, agriculture have programs which, in their view, would contribute to this achievement. Since the great depression of the '30s, government has acquired enormous economic powers which, it is hoped, can aid in preventing any really major crash. Even so, no one knows if a depression-proof economy eco-nomy can ever exist, much less if we have a reasonable facsimile of one now. A booklet recently issued by the Chamber of Commerce Com-merce of the U.S. is devoted to this matter. It does not provide an unequivocal answer to whether we are depression-proof or not. But it does sum up some of the factors now influencing the business cycle and it reaches certain cer-tain significant conclusions. It uses, in point, our experience exper-ience during the transition from the Korean War boom. Production, employment, and government and business spending all went down. But the recession was short-lived and the fears of the many who thought we were in for a massive depression proved unfounded. One factor involved here is the present-day attitude of business executives. President Eisenhower, in an economic eco-nomic report, described it thus: "Expecting our economy to grow and prosper, they do not permit minor variations in sales to divert them from the objective of strengthening, or at least maintaining, their competitive position five or ten years later." In other words, planning like research and capital investment is on a long-term basis. Another structural change in the economy is that our industries are far less homogenous and far more numerous num-erous today than they used to be. Competition has be- ; come more intense. The Chamber cites many examples : of this, and says: "For any company to stand still or to ! postpone improvements is to invite the threat of competition competi-tion and event bankruptcy. An enterprise anticipating soft- er markets for its products for the next six months or a year formerly delayed innovations. Today, one of its rivals may introduce the improvements first if the enterprise in question delays." It also observes that such structural changes "will not of themselves make our economy depression-proof. But added to the other forces making for greater stability, they can be a potent ally." The Chamber deals with the so-called "built-in stabil-zers" stabil-zers" of our economy. These include government spending; spend-ing; farm price supports; unemployment compensation; private and public pension systems; the enormous volume of liquid assets in the hands of businesses and individuals; the self-amortizing nature of most private debt; insurance of bank deposits, etc. We have had no real test of these stabilizers, but they must be considered. Finally, to what conclusion does the Chamber's study come? It is cautiously optimistic. The gist is found in these words: "Prolonged and deep depressions are avoidable avoid-able and will not occur again, unless we take complete leave of our wits which could be. Minor fluctuations and t rolling adjustments in industry after industry are inevit- ' able ... If we have the courage to avoid excessive booms and the wit to use what we know, there is reason to believe that the future instability can be kept within fairly tolerable tol-erable limits." |