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nc.ruDL.lU BULLDOG Pboenix, Thws., Jane 18,1970 The Arizona Republic S Nixon speech a return to 'jawboning' News Analysis By HOBART ROWEN Washington Post Service WASHINGTON — No matter how you slice it, the essential point of President Nixon's economic speech yesterday is a return to "jawboning," direct government pressure to get labor and management to moderate wage and price demands. At the same time, he struck a major new analytical theme for his administration, one that will be reiterated as basic speech material and in congressional testimony: The economy is already suffering from the pangs of transition from war to peace. On the jawboning elements, sometimes called "incomes policy, Democratic critics were quick to say that it was too little, too late. But it is a sharp shift in policy for this administration. Earlier, the President had, in effect, told labor and manag- ment that "anything goes." Six days after he took office, in his first press conference, Nixon said: "I do not go along with the suggestion that inflation can be effectively controlled by exhorting labor and management and industry to follow certain guidelines . . . "(These) leaders . . . much as they might personally want to do what is in the best interests of the nation, have to be guided by the interests of the organizations that they represent." That was 16 months ago. Yesterday, however, Nixon said that "now is the time for business ... to take price actions more consistent with a stable cost of living, and now is the time for labor to structure its wage demands to better achieve a new stability of costs." So, once again, the Nixon administration demonstrated that, on the economic side at least, it responds to pressures and changed conditions: Once opposed to tax reform, the administration last year recognized a taxpayers' revolt and provided a crash effort to get such a bill. Nixon also changed his mond on extension of the surtax and on dropping the 7 per cent investment credit. He " yesterday said that his was an "activist" administration and that if "new action" is needed in the future he will take it. To some, this raised the question of whether he has effectively closed the door (as he intended to elsewhere in the speech) to formal wage- price controls. At least one high administration official, Treasury Secretary David Kennedy, has never wanted completely to foreclose that option. Authoritative sources in the Nixon administration conceded privately that the program is a compromise triggered by political pressures for some action on the wage-price front. It was hammered out in White House aide Peter Flanigan's office about a week ago from conflicting suggestions emanating from the Treasury, Bureau of the Budget, Council of Economic Advisers and the new director of the Office of Management and Budget, George Shultz. Shultz and Economic Council member Herbert Stein wanted no jawboning at all, and Shultz suggested, instead, a long-range commission on productivity. Top Treasury men backed a form of the Ja- vits-Widnall proposal for regular reports on wage and price actions by the CEA. Two Treasury officials, undersecretary Paul Volcker and Assistant Secretary Murray Weidenbaum, suggested a voluntary wage-price freeze. The deadlock was broken when CEA Chairman Paul W. McCracken suggested that the Javits-Widnall idea for publicity on wage-price actions (called an "inflation alert" by Nixon) be combined with Shultz' productivity commission. This concession by McCracken, who had been resisting an "incomes policy," resolved the problem. The forms of Nixon's incomes policy will be less important than the public pressure that officials put behind it. There are plenty of skeptics, from AFL-CIO President George Meany, who is not enthusiastic about any scheme to limit wages, to Rep. Henry Reuss, D-Wis., who wanted something tougher, like a six-month wage-price freeze. Significantly, perhaps, the President said that he believes "there is a new social responsibility growing in our economic system on the part of unions and corporations. Now is the time for that social concern to take the form of specific action on the wage-price front." Informed officials indicated that this new theme will become a general guideline for the newly-established Domestic Council. Policy actions by the council, a highly-placed source said, will be measured "not only by fiscal responsibility but by a new concern for social trends." Inflation fighters also thought that the emphasis on monitoring government actions that drive up prices was signficant, notably the mention that "import policy" could be used to increase supplies at home. There was speculation that this might give new strength to those administration offi cials who, in the past, have unsuccessfully tried to liberalize oil, meat and other quota restrictions. The productivity commission, expected to be chaired by Shultz, will "spotlight the significant areas of wage anc prioe increases and objectively analyze their impact on the price level." It is not expected to have a short-run impact, except possibly on forthcoming auto wage negotiations. Shultz, who will be on the commission whether or not he turns out to be the chairman, adds clout to the effort. The White House has gone out of its way to indicate the high regard that the President has for him. In the end, the new program comes close to the May 18 recommendation by Federal Reserve Board Chairman Arthur F. Burns for "an incomes policy, provided it stopped well short of direct wage and price control and was used merely as a supplement to overall fiscal and monetary measures..." The President was not specific on the implications, or the timing, of the transition to a peace economy, except to say that "reduction in defense spending gives us more room in the federal budget to meet human needs at home." But he notety for example, that employment in defense plants was reduced by 300,000 last year. every DAD deserves a sift from FIRST IN ARIZONA FIRST IN ARIZONA 0} i« <\"\ V'.*' 1 \ \-smta \ Oul 1 \\»'J •-'At ' '^ •v,o" ;o*s \\OV*I ??S.-'o •O : o •o A X : r°vy x - • • n • • o. wipe-clean golf shoe LIGHTWEIGHT, FLEXIBLE, GREAT LOOKING. . .AND IT'S CORFAM , SO SMUDGES JUST WIPE OFFl IN ALL WHITE OR BROWN AND WHITE, BY EATON, 25.00 MEN'S WORLD Businesses back Nixon NEW YORK (UPI) Banking, business, industry and Wall Street leaders yesterday applauded President Nixon's economic message, particularly his decision against formal price and wage controls, guidelines and "jawboning" tactics. Most of the initial criticism came from political sources and labor leaders who felt the call for restraint was directed mainly at upcoming wage bargaining and had come too late for prices and interest rates. David Rockefeller, chairman of Chase Manhattan Bank, said he particularly applauded Nixon's "firm resistance to more drastic measures as wage and price controls." Rockefeller said Nixon had ably explained "what the problem is, what has been done, why it has been done and how we, as citizens, should cooperate in bringing inflation to an end without a disruptive recession." John P. Gillis, senior vice president of Monsanto Co., said the company "applauds the President for shunning wage and price controls that the chemical industry never found effective." Gillis said the company found the speech "constructive and we find" no direcl quarrel with any of it." Bethlehem Steel Corp. chairman Edmund F. Martin sent a telegram to Nixon thai backed the President's emphasis on "productivity as the key to economic growth with stable prices." He said the administration could count or the company's continued All stores open tonite FREE Gold Monogramming GIFTS FROM LEONARD'S FOR ^ COTTON f^r /f T§£ F ROCKETEER . . . hipster style leather credit card wallet. English morocco. 7.50 PORTABLE BAR ... molded vinyl, extra strong yet featherlite. From a selection. 2-bottle style, 21.95 ... 3-bottle, 27.50 DRESSER VALET . . . solid walnut tray keeps his belongings neatly at hand. 5.00 ELECTRIC SHOE POLISHER by BECK. Dual polisher gives him executive shines. 29.95 CROSS ... give Dad a lustrous chrome pen or pencil. 5.00 each. CROSS' CHRIS-TOWN • PARK CENTRAL • FASHION SQUARE ISCOTTSDALE) THIS YEAR, GIVE COTTON LUCKY DAD...IF HIS FATHER'S DAY GIFTS ARE COOL, COMFORTABLE SUMMER WEARABLES OF 100% COTTON. LIKE THESE: HATHAWAY'S COTTON LISLE KNIT DESERT CLASSIC SHIRT...CORAL, GOLD OR SKY, 14,00. 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