Greeley Daily Tribune from Greeley, Colorado on October 27, 1969 · Page 12
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Greeley Daily Tribune from Greeley, Colorado · Page 12

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Monday, October 27, 1969
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Page 12
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Pa*e 12 GREELEY TRIBUNE Mon., Oct. 27, 1969 ^ i ^ .;,,,.,.... In 3rd Period Three Distinct Periods in Current inflation By BERNARD D. NOSSITER The Washington Post'Outloo WASHINGTON - The grow Ing outcry over rising prices i taking on a new dimension. A increasing number of leaders politicn! and otherwise, are be ginning lo call for wage am price controls, extrcni' measure normally regarded a unthinkable except in an all-ou war. Al Ihc same, time, a numbc of Democratic Party figures including Joseph Califano, In former Johnson aide, think thej have found a weak point in th Nixon administration because o its rhetoric dismissing price guidlines. wage This ferment represents a sig nificant shift in the debate ovc inflation. tMil recently, the is sue has been posed in these terms: Are prices rising be cause the federal reserve ha; created too much money or be cause government spending 01 Vietnam and civilian programs has built uj) too much demand'. Now, the question is being put in these terms: Is inflatioi the consequence of misguidec government policies, fiscal 01 monetary, or is it the result o an abuse of private power? Behind the revived discussion of guidelines and controls is an implicit view that the nation's economic analysis have lookec loo long at Washington and no; nearly enough at the decisions made in executive suites ant union headquarters. The Ihrce charts accompany- tombii t Wlli Itti. / //// / / PfflffliflSi* JL^£ * emonam j D U N C A N In loving mrmnry of our dour JMnlhrr. llnrnlhy, who pnrmed n w n y five ycitt'B tipo Or.1. 27th. In our lininn nhe IR romlly ranombcrctl, Sweel, momorloB o.llnff i n hoi- mum!; Tltoso \vlio lov-eil her in life fiincornly, SUM l u v u her In d e a t h j u n l MlO K1II1IC. Sniily nilHHCil by linr Children Greeley Needs Representation In City Council ELECT Joe Poertner Ward II FOR RENT TYPEWRITERS ing this slory arc an cfforl t ground the new discussion fact, to look at the Industrie^ in which prices have been ris ing and see whether some clue about the sources of inflalioi can be deduced. The graphs are the work o Gardiner C. Means, a disling uished 73-year old economis whose producl has always been regarded uneasily by his professional confreres because i has touched on Ihe disagreeabl question of power. In the 1930s, in collaboration with A. A. Berlc, he revolution ized thinking and public policy towards large corporations observing that ownership am management were no longer an identity. In the '50s, Means producec a powerful analysis, demonstrat ing thai Ihe inflation of thai era was largely Ihe product of ad ministered price industries, Ice by steel. He is, in effect, the unacknowledged godfalher o .he Kennedy-Johnson wage irice guidlines and his findings the theoretical rationale 'or Kennedy's famous confront alion with chairman Roger Hlough of U.S. Steel. The story suggested by Weans' new charts will provide little comfort to advocates o ;he cither-or stripe, to those who fix responsibility exclusive y on government and to those who pin it entirely on private xwcr. Three Distinct Periodi Means believes that there are hree distinct periods in the current inflation, the one that jegan in 1965 and still persists. The first, lasting nearly Iwc 'ears, he labels with an old ·lew Deal term, "Reflation/' lere, Ihe governmcnl was ac- ivcly seeking lo reduce high evels of unemployment and lid so with a variety of tech- liqties. The most notable were he big tax cut and the enlarged pending for both (lie war and ivilian purposes. The second period, which ran mill the starl of this year, deans describes as an "admin- stered price inflation." Here, icrcnses were generated by the arge corporations and the pow- rful unions wilh which they call. Whether the Inflationary ngine was fueled by union demands or by corporate price decisions is a question difficult to disentangle. Means has not al- tcmplcd lo answer it. In Hie tliird period, the march of prices during l!Xi9, Means concludes that both government These are the Industries -- "ol- policy (and "government" here embraces the nominally independent Federal Reserve as ,ve!l as executive fiscal powers) ind private decision-making are respponsiblc. This he calls 'compound inflation." If Means is riEht, a remnrk- nhle sophisticated mix of public )olicy is in order. The Means ·malysis indicates that current nflnlion can not be choked off y exclusive reliance on fiscal and monetary restraint withoul recreating at least tlie high evels of unemployment experienced in the 1950s. By the same lokcn, inflation can't be stopped by pursuing only the centers of private power. A judicious mix of both is needed. Indeed, some perception that this is so perhaps explains why some members of the Nixon administration are beginning to ·soften their anti-guidelines pronouncements and may be tink- ering'with a variant of this approach. To understand Means requires an understanding of the structure of American industry. He distinguishes between three broad types of industry and argues that price behavior depends on the extent of their power over their market. Extreme! At one extreme are the competitive industries, beloved by economics textbooks. These are the industries like farming in which no one firm is big enough so that its actions can affect the price or output of its fellows. At the other extreme are the concentrated industries like steel, aluminum, autos and electrical machinery. Here, a few companies accounl for Ihe bulk of the sales. They are not im mune from the classical forces of supply and demand but they or their price leaders, have con siderable discretion within broad limits. Thus, what U.S. Steel or Gen- eneral Motors or General Elec- ······················!trie (and their generally well Adding Machines J"EverythinK for tho O[[ice"J 1303 E i g h t h Avenue Frigidaire Products Sales and Service Since 1928 810 Ifllh SI. County Garage I'h. 352-1313 REFLATION j- tit. l«4-S«pt. mi -^ (Compttitivt Muiliiei lui friti Dim) * fi«mi4 Iti4l ADMINISTERED INFLATION Sept. mi-0«. 1961 (Conttnltotcd (ndtulmi P« Coins) Indexes Dominated by vyCondnliolid Induittiii i!;ij Mini) Induiliiti ^Competitive Industrie! / / · // f / nE!5n| f nnrot-hidi / Nrtal t Mttol o F»Mi / COMPOUND INFLATION Dec. 1968-Fresenl (All Groups Hise) Indues DominoUd by vv (onccnlralfd Induttttoi '£ Uiifd Induitnit \^ Competitive tndtitlriei Ive and theoretical objections to this approach. In the end, any president, even one so little bound to ideology as Nixon, has some difficult calculation! to make. To deal with classical inflation and restrain the competitive sectors, tow high a price in unemployment is bearable? To deal with administered inflation, how much opposition can any president take from centers of pow; er at union and corporate headquarters? · - CHARTS -- These three graphs (hi order, Reflation, Administered Inflation and Compound Inflation), show where inflation has been taking place among the nation's chief industrial groups. Th doited diamonds are the concentrated industries with few firms in control; the diagonally striped bars are the competitive industries with many firms; the dotted bars are those in between. The height of each bar shows how much a particular Industry's prices have risen (or fallen) in the period covered by the chart. The width of each bar shows the weight or importance of the industry in the Wholesale Price Index WPI). The area covered by each bar measures the industry's contribution to inflation. (Graphs by Washington Post) width, Is a graphic representation of the contribution of each industrial grouping to inflation. rganlzcd unions) do about ricing and output will powcr- jlly affect the decisions of heir handful of near-peers, gopolistic" in the economists' diom that administer prices. In between, are 9 broad range if industries with more firms han in Uie auto industry but ar fewer than the number of "otton farms. The pulp and taper industry is a typical mem- ier of this mixed branch. Both In theory and in prac- ice, an expansive fiscal policy lax cuts, more spending) or :asy money will push up com- letitive prices. In textbook erms, effective demand is out- tripping supply. Prices in com- letitive industries, Means has lemonstrated in the past, are icnsilive and volatile and :hange rapidly, up and down, vith changes in demand. Prices in concentrated indus- ries, however, are a different animal. Corporate executives, essentially conservative, make changes more slowly and in irder to achieve a targeted rate if return. Thus a fresh burst of effect- ve demand may or may not move up prices in oligopolistic ndustries. Moreover, corporate managers, exercising their dis- crealion, may lift prices even n the absence of extra demand. Charts Bated on WPI Means' charts are based on he Wholesale Price Index Still Another Pattern "The present, compound gs. That is why his findings by 26 percent. e more tentative than con- uslve. Thus the steel industry subsumed under the bigger etal and metal products head}; oil is part of the larger el and power group and the te. A more detailed break- iwn, industry by industry, is or rebut price increase during the There is another famiIy"oFsoi- wriod under examination. The utions, those requiring leading idth of each bar reflects the corporations and unions to give 'tmortam K O R I I L K R lit loving memory of my lius- bnml, Philip Koehler, -who piissed awny Oc.tobor 27, 1964. A tlenr one from UK hns gone. A voice we loved is stilled A place is vncnnt in our home Thnt never cnn be filled. God sine us strentgh to face it C'om-npe lo benr the blow But what It menus to be without him No one will ever know. Snrtly missed by his wife, Frieda, children and granddaughters rather than Ihe more miliar Consumer Price Index CPI). Broad price changes nw up in the Wholesale Index fore they appear in the retail percent and processed foods, 13 percent. Conversely, the concentrated metal and metal products group goes up only 3.5 percent and the concentrated machinery and motor vehicles sector, 3.1 percent. During the administered flation period, the picture changes dramatically. The price advances are largely in the concentrated sector. One important competitive industry, farm pro- Tap« Found Donald Lee Hockley, 709 13th 31., told police Saturday some poys stole afcout 10 stereo tapes from his car. The boys were pursued to the railroad tracks where the lapes were found hid den. Police laler picked up a suspect in the theft. Typewriter. Gont Jacque Foskett, 1924 9th Ave.. told police Sunday a $300 port able typewriter was stolen from her apartment. Bikw Stolen ,, . , , . . . , . Patrick L. Menke, 1115 Cran For this exercise Means has and wood products industry. A f or d, pr told police-Sunday his ed very broad industry group-'-! -- ' ~ u - t ·-- -! - ' vel. Morever the Wholesale ducta aclually dec ,i ned 5 dex is distorted less by chang- in the quality of products. :eded to confirm eans* findings. This is a task that the joinl onomic committee or the Sen- bcominlttee 'might profitably rcdertake. Federal agencies -- t Labor and Commerce De- away from politically nsitire questions like sdmin- :ered prices and wages. In the Means' graphs, Ihe eight of each bar is the percent dustry's weight or Importance the index. Thus, the area the bar, the height times the cent . An e x c t i o l l to the pattern is the competitive lumber inflation offers still another pal- tern. Here price advances are r e g i s t e r e d Indiscriminatly among a handful of financial executives and a few Democratic senators and congressmen wilh With Officers Alfalfa Stolen Mark Kitely, Longmont, told sheriff's officers Saturday that 250 bales of alfalfa were stolen from a field west of 1-25 on Colorado 66. Posts Pilfered A. C. Elliott, told pilice Sunday he had put up r .ve five-foot wooden posts at A _-'d B Apartments, 213 llth Avenue and that Ihey had been stolen. Theft Reported Robert Hammond, 1911 25th Ave., told pofice that his car was broken into while parked in the 900 block on 10th Avenue and that two girls' coats and a purse were stolen. Loss was estimated at $107. Car Entered Steve Allen, 1405 15th Ave., repotred his car was broken into at the Gondolier Restaurant an: clothing, overnight bag am wrse were stolen. Tapes, Player Missing Arthur Winter, Cunningham Apartments, reported Saturday lis car was broken into while wked at Troxel Hall and a ape player valued at $130 anc 40 tapes with a value of $25( were stolen. Car Recovered Barry Winchell, 1231 29th St Rd., Saturday reported the theft of a 1965 sedan. The car was In the reflation period, the impounded by the Evans Mar- overwhelming role of the com- shal when it was found parked oetitive Industries is apparent, at the Chappelow School farm products went up 17.2 stripped of its seats. Japanese Auto Industry Not Wanting Massive Investment By DAN FISHER Th* Lai Angclts Tim» Liberalization of rules covering foreign investment in Japan's auto industry won't necessarily result in large investments there. In fact, opportunities for joint car building venttires between U. S. and Japanese auto-makers are limited, .according, 16 Masataka Okuma, managing director of Nissan'Motor Co. Ltd., producer of Dalsun automobiles. pkuma, here.-for the West Coast introduction of a new Dat- sun sports car, pointed out last week that Japan's two largest auto makers -- Toyota and Nissan -- actually control eight vehicle manufacturers between them. He suggested that these Japanese auto giants don't want massive U. S. industry investment. Nissan and Toyo Kogyo, another Japanese auto campany, are in final negotiations with Ford Motor Co. to establish a joint company to produce automatic transmissions. But Okuma said. the discussion has. not broadened to cover a joint auto manufacturing or marketing company. The new transmission company will involve a 50 per cent Ford interest with the other 50 per cent divided between Nissan and Toyo Kogyo. It will take about" two years before a plant can be built and the new firm gets into initial production, Okuma pointed out. Meanwhile, other investment pportunities for U. S. car build- rs look slim, Okuma indicated, Mitsubishi is already committed o a joint venture with Chrysler lorp., although Okuma suggest- d that nothing concrete will de- elop until October, 1971 -- the ffective date of recent Japan- se liberalization moves. Top officers of two other in- ependent Japanese auto com- anies -- Toyo Kogyo and' Hpn- a -- have said they aren't int- housing boom shot up prices bicycle was stolen: from beside !iis home. Susie Peterson, Had den Hall, said Saturday her bi cycle was stolen from the dormitory. a penchant for fresh approaches to economic problems. Whether his attack will have the . . . _ , , . , potent effects on policy making e Anti-Trust and' monopo y that Jt did wlth a Deraocra t in the White House is a large question. Moreover, even an adminis- artaentsi or the Federal Re- tration willing to acknowled g e TM ~ haTM fo e ^TMTM s . *° the importance of administer- » (he job but have tradition- ed prices mA wages can right . fully ask: What institutional mechanism can really contain this power? Guidelines are crude, uncertain and capriciously applied. advance notice and justify changes in prices. But there are many political, administra- COMPLETE AUTOMOTIVE SERVICE · Major Overhaul · Engine Tune-Up · Brake Service · Body, Paint and Automotive Glasi We Service Any Make of Car Using Only Genuine Parts -- Expert Mechanics -- WARREN-BUNTINQ MOTOR CO. Eaton, Colo. Ph. 454-2591 Highland Nurseries.^. No hocus pocus in planting crocuses. Ju«t plunt now, In fall for i beautiful spring. Large selection. Reisonably priced. 353-4445 60th Ave, and 20th St. crcslod in ventures wilh non- Japanese companies, Okuma claimed. ·Whatever develops from Japan's lowering of barriers · to foreign auto investment, the move . does demonstrate that "Japan is trying its best to meet the requests of all other countries rail-over the world." Ami "hopefully"'anyone in this country wilh protectionist feelings will "kindly appreciate the policy of the Japanese government," Okuma smiled.. sJt ilz25', brown-toned Kid finilh SALE \ $19 Rectangles, ovals and more.. With) frames ranging from quiet.ly elegant to unre-. strained rococo. In a variety, of finishes. Libbey, Owens, 1 Ford, quality from the world's largest manufacturer, Carolina 'Mirror. Priced to make it easy for you to wake up your home without shaking up your budget. HARDING GLASS CO. 1915 9th St. 352-S263 PUMPKINS MILLER'S VEGETABLE STAND 2 miles south on 1st Ave. from the Sugar Beet Factory 5 * BMW »!W!B«WBB*«fiWai5«!BWS HELP GREELEY CROW von YES FOR LOCAL OPTION! A few years back, Bonder found itself with a gigantic problem caused by "islands" of county land within the city limits, since annexation of licensed property by n "dry" city was consistently defeated by the courts. It's a headache we. don't need in Greeley, but it may be inevitable unless we end prohibition here. if Greeley is to grow, not only in terms-of population and area but, more importantly, in the quality of homes, recreation areas and business, it must be free of the handicap imposed by local prohibition. We must be able to look toward annexation now, not wait until the city is surrounded with a jumble of haphazard, unplanned developments. We must encourage the development of attractive facilities within the city for business, community groups, tourists and conventions to meet, dine and entertain. For planned growth . . . vote YES for local option November 4. "Community-Planning" (such as zoning ordinances, sign control, building regulations, etc.) is only half the story of- a well-planned, developed community. Such action can prevent bad things from happening, but for GOOD things to happen money must be attracted for investment and development. An increased tax base and a fairly distributed tax load, as well as increased facilities, are essential in attracting this kind of money. Local option is a vital step toward these goals. Help ftreeley firow l^ommittee Mm. f ^f *' ^-^ ^/ R °° m 2i2 Greeley, Colo · I'h. 352-9005

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