«d tried!'
cessful, j|
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liuis said.
Economic thinking is changing
THE BATTALION
WEDNESDAY, APRIL 23, 1980
Page 9
is, result,
vleopari
70s could
d to zoos
United Press International
HOUSTON — A Harvard econo
mics professor Tuesday said Amer
icans are experiencing a major shift
in their assumptions about how the
economy works and what should be
done to cure its ills.
I “I believe a major revolution in
economic thinking in the United
States is now underway — a retreat
from Keynesian thinking that has
dominated the past 35 years,” Dr.
Martin Feldstein told the Federa
tion of Financial Analysts.
John Maynard Keynes was the
British economist whose belief in
governments’ spending their people
to prosperity took hold during the
Great Depression and, Feldstein
said, has dominated American eco
nomic policymaking ever since.
“It’s obvious that those ideas were
not appropriate for the economy of
the 1960s and 1970s when they had
achieved their greatest influence,”
said Feldstein, also president of the
National Bureau of Economic Re
search.
“The Keynesian framework is not
the way to analyze what’s happening
to the United States.”
Feldstein said Keynes believed
unemployment was caused by too lit
tle demand for products, savings
were bad because they took capital
out of circulation and government
could solve economic problems.
Feldstein disputed each idea.
He said current 6 percent U.S.
unemployment is not due to shor
tage of consumer demand, which he
said is excessive and helps fuel infla
tion. He said current joblessness is
often temporary and is partly due to
unemployment compensation.
On saving, Feldstein said a major
problem facing the United States is
not too much but too little, depleting
the major source of capital funds
needed to renew the nation’s pro
ductive capacity.
Feldstein said Keynes-inspired
federal policy has pushed the U.S.
savings rate to 3 percent, compared
with more than 10 percent in some
European countries.
He cited as anti-savings policies:
Social Security, which eliminated
fear-inspired saving for old age; tax
laws, which burden interest income
but give borrowers a tax break, and
government deficits, which absorb
capital.
Feldstein said the most obvious
shift in thinking has been the decline
in public belief the government can
solve the nation’s economic prob
lems.
“Changing these deeply ingrained
aspects of economic life can happen
only slowly,” Feldstein said.
“The political survival of such
(new) policies is far from certain. The
coming recession may trigger
Keynesian reflexes. The Democratic
political process — with 2-year elec
tion cycles — may not be able to take
a long enough view.
“Despite the risks, I am optimis
tic. I believe the experience of the
past dozen years has educated not
only economics professors, but the
public and politicians as well.”
Same song, second verse:
price of gasoline is up
United Press International
WASHINGTON — The aver
age price of gasoline rose 4.4
cents per gallon in March to
$1.23, the government reported
Tuesday.
Leaded regular gasoline aver
aged $1.202 a gallon in March, up
4.3 cents from $1,159 in Febru
ary, the Bureau of Labor Statistic
said.
Unleaded regular was $1,252,
up 4.5 cents, and leaded pre
mium averaged $1,277, com
pared to $1,233 in February, it
said.
The BLS report showed prices
for all types of gasoline were high
est in Honolulu, Chicago and San
Francisco. The lowest prices
were in Cincinnati and Dallas.
Leaded regular gasoline sold
for an average $1,271 a gallon in
the Chicago-northwestern Indi
ana area. In Cincinnati, the cost
was $1,135, the report said.
Unleaded regular ranged from
an average $1,324 in the Chicago
area and $1,338 in Honolulu to
$1.18 around Cincinnati.
s
29
79
69
59
19
»
;kefl
OUSf
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Half Boneless Hams 70
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SAFlpilf and a little bit more
Chemical fire
pollutes N. J.
United Press International
ELIZABETH, N.J. — A fire with
temperatures soaring to 2,400 de
grees burned through an illegal toxic
waste dump described as a “chemical
time bomb” Tuesday, spewing no
xious fumes over a wide area of the
New York waterfront.
Schools were closed in two New
Jersey cities and the New York City
borough of Staten Island, and at least
eight firefighters were reported in
jured, including four with acid
burns.
The fire broke out with an explo
sion at 10:40 p.m. Monday at the
Chemical Control Corp., a chemical
storage facility that was closed by the
state over a year ago.
About 40,000 55-gallon barrels of
chemicals including paint thinners,
de-greasers and solvents were
thought to be at the storage site.
At 9:30 a.m. today, fire officials
said the blaze was contained but not
under control.
USSR feels
grain crunch
United Press International
WASHINGTON — The Soviet
Union is beginning to feel the effects
of the U.S. grain embargo, an Agri
culture Department official said
Tuesday.
Howard Hjort, the department’s
economics director, said, “Feed sup
plies, already tight because of a poor
Soviet grain harvest in 1979, are
stretched even thinner now as a re
sult of the suspenion.” He said the
net effect of tljpiUrS. actipn is that,
the, Soviets ’fvfii ijhport orte-thirdless
grain than they had expected for the
first half of 1980.
The Jan. 4 suspension of American
grain exports to the Soviet Union was
announced by President Carter in
response to the Soviet invasion of
Afghanistan.
The suspension affected 13 million
tons of corn, 4 million tons of wheat,
about 1.3 million tons of soybeans
and soybean meal and some poultry
and other commodities.
A report issued by Agriculture
Department today estimates the sus
pension will leave the Soviets 7 mil
lion tons short of the 37.5 million
tons of grains they had expected to
import from all sources between July
1979 and June 1980.
The report said the major impacts
of the embargo will be to restrict
growth of the Soviet livestock indus
try, which is heavily dependent on
imported grain for feed; increase
Soviet vulnerability to a poor harvest
because of their current reliance on
grain reserves; and force the Soviets
to pay higher prices for grain imports
as they attempt to bid grain supplies
away from other importers.
Wholesaler
to cut prices
United Press International
WASHINGTON — A large
wholesale grocery distributor in
Texas has agreed to hold down its
prices in order to return to com
pliance with President Carter’s
voluntary price guidelines, the gov
ernment said Tuesday.
Last December, the Council on
Wage and Price Stability found that
Grocers Supply Co. of Houston had
not been complying with the presi
dent’s guidelines.
The company originally requested
a reconsideration of the council’s
ruling.
But according to the council,
Grocers Supply has now agreed to
hold down its prices for the next six
months to make up for the its exces
sive pricing last year.
8
Battalion Classifieds
^ Call 845-2611