Spirit of '57

Still haunted by memories of the Great Depression, Congress in 1946 passed a law making the Federal Government responsible for promoting "maximum employment, production and purchasing power." Last week, obeying a provision of this Employment Act, President Eisenhower sent to Congress his yearly Economic Report, and evident in its pages was a striking departure from the spirit of 1946. After a decade in which the gross national product soared from $232 billion to $412 billion and real per-capita income after taxes rose 20% (to an average $1,705 for every man, woman and child in the nation), Ike's No. 1 economic worry was not unemployment but inflation. And the economic responsibilities he stressed were not those of the Federal Government, but those of businessmen, labor leaders, workers.

Echoing Appeal. During 1956. he reported, "rising costs became an increasingly pervasive factor" in the economy (see BUSINESS). A major cause of inflation was a round of wage increases not based on any substantial increase in labor productivity. Output per worker, after rising an average of 3% a year during the postwar decade, registered "only a very small gain," he pointed out, while average hourly earnings in manufacturing and construction went up 6%.

"The full burden of avoiding price inflation," he wrote, "cannot be successfully carried by [Government] fiscal and monetary restraints alone." Echoing his State of the Union message (TIME, Jan. 21), he appealed to business and labor leaders "to help avoid economic imbalance and dislocation ... to reach agreements on wages and other labor benefits that are fair to the rest of the community. Negotiated wage increases should be consistent with productivity prospects and with the maintenance of a stable dollar. And businesses must recognize the broad public interest in the prices set on their products and services." The President added a warning: "Failure to accept the responsibilities inherent in a. free economy could lead to demands that they be assumed by Government. [The result would be] in tervention and loss of freedom."

Startling Growth. For 1957 he ventured no crystal-gazing beyond a cautious prediction that "the nation's overall prosperity will be extended into the months ahead." But the Economic Report's special appendix on U.S. population trends peered two decades ahead, and what it saw was a period of startling growth that could well spur a major business expansion. Back in 1946, when U.S. population stood at 140 million, experts predicted that it would expand to 153 million in 1960, reach an ultimate peak of 165 million in 1990 or thereabouts. In fact, the population passed the 165 million mark some time in 1955. By 1960, said the forecast, it will approach 180 million; by 1970, some 200 million.

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