Playing with Inflation

The cost of living, as of mid-July, was up a barely perceptible .2% over the previous month. But this creeping change, announced last week, had a supercharged effect.

Millions of workers promptly took their place in line for wage boosts. Under their escalator contracts, 1,000,000 auto workers are due for an immediate 1-c--an-hour rise. Some 2,000,000 other industrial workers under other escalator contracts may get increases within a few weeks. And under the Wage Stabilization Board's new policy of tying all wages to the cost of living, some 60 million other U.S. workers will also have claims to higher wages. To meet the inflationary pressures, some of which were of the Administration's own making, President Truman last week sent a message to Congress demanding repeal of three sections of the Defense Production Act, which he had signed under protest. The three sections which did "the greatest damage to price controls," he said, were: the Capehart amendment, allowing manufacturers to add increased costs to their prices; the Herlong amendment, allowing retailers to charge the same percentage markups as before Korea, and the Butler-Hope amendment, banning slaughtering quotas in the meat business. Those amendments, said the President, may cost consumers "billions and billions of dollars."

What gave the President's message a hollow and political ring was a fact he notably failed to mention: wages and farm prices, just as much as manufacturers' prices, need sterner control.

Three Republican Senators, Ferguson (Mich.), Nixon (Calif.) and Welker (Idaho), promptly introduced a bill to give the President exactly what he asked. Said Ferguson: "We have in the past found numerous instances of the Executive's failure to enforce laws because they were not in harmony with the opinion of the President." Said Nixon: "The purpose of our bill is to give him the power which he says he needs." Ohio's Republican Bricker asked: "Has the Senator any idea that the President would enforce any law the Congress might pass to prevent inflation?" Said Ferguson: "There is great doubt .. ."

"So this [the Truman message] is simply a cheap political trick," said Bricker, "to try to put the blame upon the Congress."

The Republicans were not serious about their bill. "But," explained Nixon, "we didn't think the President was serious either."

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