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Show NATIONAL I AFFAIRS Reviewed by CARTER FIELD Freezing of Farm Prices and Wages Seen Necessary to Prevent Inflation . . . Tax Issue Looms lis Important in Local Elections . . . (TJell Syndicate WNU Service.) WASHINGTON. Anyone who thinks that inflation and unCridled inflation at that can be prevented without freezing farm prices and wages should read one of two, preferably pref-erably both, recent observations. One of these was the testimony on Capitol Hill of Bernard M. Baruch. The other is a pamphlet issued by the Brookings Institution entitled "EITects of the Defense Program on Prices, Wages and Profits." The latter is by Dr. Meyer Jacobstein and Dr. Harould G. Moulton. Dr. Moulton is head of the Brookings Institution. They are interesting chiefly because be-cause they demonstrate, emphatically emphatic-ally and without heat, that nothing the government is doing or proposes to do will prevent runaway prices, and partial destruction, through this cutting of the value of the dollar, of all savings accounts, life insurance, insur-ance, social insurance benefits in fact all forms of savings which are measured in dollars and not in goods. It hits the government bond and the sock under the mattress equally in proportion. It hits the very defense de-fense bonds the public is being told are a good investment. Issued on the Secretary of the Treasury Morgenthau's proposal of a boost in the social security tax from 2 to 6 per cent was announced, the authors of the Brookings pamphlet pam-phlet could not have been meaning to hit it. But they did. One of the admitted reasons for this proposed tax boost was to cut private purchasing pur-chasing power as a partial check on inflation. Brookings' Statement Say Drs. Jacobstein and Moulton: "The price advance cannot be directly attributed to the increases in mass purchasing power. If the general rise in prices had been due to competitive bidding by consumers possessed of increased incomes, one would expect to find retail prices increasing at least as much and as rapidly as the prices of manufactured manufac-tured products and raw materials. The facts show, however, that the increase in retail prices has been relatively small. The price rises began at the producing and not at the consuming end . . . 'The facts clearly show that the active forces leading to price advances ad-vances in the present situation have been operating on raw materials and manufactured products, gradually gradu-ally spreading from there to the retail end . . . "The prevailing belief in government govern-ment circles that price rises could not occur so long as there remained a large volume of unemployed labor and capital goes far toward explaining explain-ing why no deep concern was manifested mani-fested until fairly recently over the price question, and why the Office of Price Administration was not set up until the spring of 1941. Had the nature of the price inflation process been clearly perceived, steps would doubtless have been taken at a much earlier date to control the sources of price disturbance. disturb-ance. No Control Provided "The Office of Price Administration Administra-tion has no authority over the farm price program and no authority over wages . . . The price control bill now before congress does not provide for any control of wages, and control of farm prices cannot begin until 110 per cent of parity is reached. Since as this analysis has shown, the upward movement of prices is chiefly due to increases in the prices of agricultural products prod-ucts and in wage costs, it is obvious that the Office of Price Administration Adminis-tration has no effective control over the price system as a whole." Tax Issue And Local Elections Joe Martin's conclusion that the folks in the West are keenly worked up about the new taxes, and his hope that the G.O.P. may win the next house as a result, may be discounted dis-counted by the possibility of an appeal ap-peal by administration leaders not to give the world the. impression that the American people are not in sympathy with the war against Adolf Hitler. But if Martin is right about the interest in taxes, as would seem very logical, look out for primary pri-mary upsets next spring and fall! Outsiders aspiring to seats in the house and senate are likely to find taxes a heaven-sent issue. There is hardly a senator or representative who will not be pitifully vulnerable to a sharp attack by an opponent who studies the sitting member's record on appropriation roll calls. Remember that these will be local contests. The sitting members mem-bers will always be attacked for voting for appropriations in which their own constituents are not interested, in-terested, but which can be made to appear heavily responsible for the boost in taxes. |
