Tape 147 - The president's economic report
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- | Welcome once again, as MIT professor | 0:02 |
Paul Samuelson discusses the the current economic scene. | 0:04 | |
This series is produced by | 0:07 | |
Instructional Dynamics Incorporated. | 0:08 | |
This program was recorded February 14th. | 0:10 | |
- | Today I'd like to comment analytically | 0:13 |
on the economic report of the president. | 0:16 | |
This is a document which has come out annually | 0:19 | |
since the Employment Act of 1946 was passed. | 0:22 | |
It usually comes out at the end of January | 0:29 | |
this year on February first. | 0:33 | |
It consists of two parts, | 0:36 | |
the first and briefest part is the report | 0:40 | |
of the president himself. | 0:44 | |
I cannot remember right now whether | 0:47 | |
it was always the case that the economic report | 0:49 | |
of the president himself was clearly | 0:53 | |
delineated and distinguished from | 0:56 | |
the economic report of his council | 0:59 | |
of economic advisors. | 1:01 | |
But that certainly has been the practice | 1:03 | |
for the last dozen or more years. | 1:05 | |
This report which is signed by the president | 1:10 | |
is in fact not to be construed I think very differently | 1:14 | |
from the economic report which is signed | 1:19 | |
by his council. | 1:22 | |
A report in a sense to him because everybody recognizes | 1:24 | |
that the report by the council, | 1:29 | |
is a governmental document, | 1:33 | |
and it doesn't represent the private opinions | 1:37 | |
of doctor Herbert Stern or doctor William Feldner | 1:41 | |
or doctor Gary Sievers. | 1:44 | |
It represents their position as the spokesman | 1:48 | |
for the administration. | 1:54 | |
And nevertheless it's a good vision | 1:56 | |
because it does give the council | 1:59 | |
of economic advisors, freedom to go into things | 2:02 | |
which it would never be considered part of | 2:06 | |
the professional competence of the president. | 2:12 | |
I have in mind for example that there is an | 2:14 | |
informative chapter in this year's report, | 2:18 | |
annual report of the council of economic advisors | 2:22 | |
on the distribution of income, chapter five. | 2:25 | |
There's no reason why queen Elizabeth of England | 2:27 | |
can't pin her message to the parliament, | 2:30 | |
message from the throne, say anything that | 2:34 | |
the Prime Minister Heath at the present time | 2:37 | |
would write out for her. | 2:40 | |
But it becomes a bit of a charade if she goes in | 2:43 | |
to technical matters and so although | 2:47 | |
there have been previous presidents who really thought | 2:49 | |
that they wrote the economic report of the president | 2:53 | |
and of the council of economic advisors. | 2:57 | |
It's understood that these are official documents | 3:00 | |
written by professional people | 3:03 | |
but reflecting the agreed upon doctrines and policies | 3:06 | |
of the administration. | 3:13 | |
I've commented briefly in overall way | 3:16 | |
in a news week column on this present economic report. | 3:20 | |
I said that mr Nickson's economic report this time, | 3:25 | |
deserves a much better grade than say three years ago | 3:28 | |
when a slump was reached and when a C minus | 3:33 | |
would have been charitable to give to that document | 3:38 | |
as a whole. | 3:42 | |
The reason for that was that it made | 3:44 | |
explicit and implicit predictions which deferred | 3:47 | |
from that of the majority of economists. | 3:52 | |
Those differences were not defended in the report, | 3:56 | |
reading in the lines, between the lines, | 4:02 | |
it seemed as if the heart of Paul McCracken for example | 4:05 | |
then the chairman of the council of economic advisors | 4:10 | |
wasn't really in the overly optimistic forecast | 4:12 | |
that was being made for the year 1971. | 4:15 | |
And grievously did the administration suffer | 4:19 | |
both in terms of morale and in terms of psychology, | 4:23 | |
from that unnecessary bad performance. | 4:29 | |
Well if that was a C minus performance, | 4:34 | |
it seems to me that the report for February 1, 1974 | 4:37 | |
has to be graded distinctly upward, | 4:42 | |
let us say B plus. | 4:46 | |
For one thing and I use this as a term of commendation, | 4:50 | |
it's a very low-keyed report. | 4:53 | |
Both in the president's small section | 4:55 | |
and in the report as a whole. | 4:59 | |
If there was ever any thought, | 5:02 | |
that the electoral majority of the president | 5:04 | |
in which he won 49 states in November 1972, | 5:08 | |
gave him the leeway to pursue a path | 5:13 | |
away from what has become the middle of the road path | 5:18 | |
for American economic policy. | 5:23 | |
We all know that the events subsequent to Watergate | 5:27 | |
have deprived the president a very much discretionary power | 5:32 | |
and his state of the union message showed that | 5:38 | |
in its being on the whole a low-keyed compromising | 5:41 | |
middle of the road document. | 5:46 | |
And I believe the present economic report | 5:48 | |
of the president is to be commended because | 5:51 | |
it also shows that same moderation. | 5:54 | |
For one thing, it calls a spade a spade, | 6:00 | |
namely it calls a growth recession, a growth recession. | 6:05 | |
It calls an almost recession in effect | 6:10 | |
an almost recession. | 6:14 | |
Whereas the president you will recall | 6:15 | |
in a state of the union message, | 6:18 | |
had said there will not be a recession | 6:20 | |
in the United States. | 6:23 | |
There is no such brazen utterance either in | 6:25 | |
the president's own brief part of the report, | 6:32 | |
nor in the body of the larger report from | 6:35 | |
the council. | 6:40 | |
Because it's a very close close run thing | 6:42 | |
whether a 1974 will or will not go down | 6:46 | |
in the economic history books as the year | 6:50 | |
of genuine recession. | 6:53 | |
It's so close that when secretary of treasury | 6:56 | |
George Shultz, was briefing the press | 7:02 | |
on the budget message which came out a day or two later, | 7:05 | |
there was a certain amount of humor sparring going on. | 7:08 | |
I saw only a film clip sample on one of the network | 7:15 | |
news shows. | 7:22 | |
So I presume that the press must have asked him, | 7:24 | |
" Is there gonna be a recession this year?" | 7:28 | |
and doctor Shultz said, " No there's not going | 7:30 | |
"to be a recession, but I know that you fellas," | 7:33 | |
and am sorry that doctor Shultz | 7:37 | |
got in the position of regarding the press | 7:39 | |
even in a jocular way as the enemies. | 7:43 | |
" But you fellas are gonna call it a recession if you can | 7:46 | |
" and we're gonna say it isn't a recession | 7:49 | |
"if we can, and there is enough," | 7:52 | |
I am not quoting him verbatim now. | 7:56 | |
"There's enough of a semantic ambiguity about | 7:58 | |
"what does constitute a recession, so that | 8:02 | |
"we both have it our way, you will call it a recession, | 8:05 | |
"and unless it's got awful, we will deny | 8:08 | |
"that it's a recession." | 8:11 | |
But what's important is that the outlook | 8:15 | |
is given by the council, and let me tell you where we stand | 8:18 | |
according to the informed professional inside opinion. | 8:26 | |
I correct myself, this is what the council | 8:31 | |
thinks is the appropriate thing in a state document | 8:37 | |
to write. | 8:40 | |
What is implied, I'm reading now from page 28. | 8:42 | |
What is implied by the path ahead, | 8:45 | |
that if the president seems to us the best of feasible | 8:50 | |
ones for the economy. | 8:53 | |
Given the inescapable effects of the energy shortage, | 8:55 | |
there's an increase of about eight percent | 8:59 | |
in the nominal, or money value of G.M.P. | 9:01 | |
From calender 1973 to 1974. | 9:04 | |
That will be an increase to about | 9:08 | |
one trillion 390 billion. | 9:10 | |
Of this rise, about one percent | 9:15 | |
will be the increase in real output. | 9:17 | |
And so you notice we definitely can look forward | 9:19 | |
to a growth recession. | 9:23 | |
And about seven percent an increase of prices, | 9:26 | |
as measured by the G.M.P deflator. | 9:29 | |
And so we definitely can look forward to | 9:33 | |
a continuation and even extenuation of the price inflation. | 9:36 | |
Changes from calender 1973 to 1974 are of course | 9:47 | |
significantly influenced by what has already happened | 9:52 | |
in 1973. | 9:54 | |
And hence changes so expressed to not describe | 9:56 | |
an expected path for 1974. | 9:58 | |
though they are implied in any expected path. | 10:01 | |
As for the expected path during 1974, | 10:04 | |
this would leave real output approximately flat. | 10:08 | |
And perhaps declining for an interval | 10:12 | |
in the first half of the year, | 10:13 | |
but would bring a rise by somewhat more | 10:15 | |
than the normal trend rate in the second half. | 10:17 | |
I'll interpret that sentence in a moment. | 10:21 | |
Inflation would be rapid in the early part | 10:23 | |
of the year, mainly as a consequence of energy | 10:25 | |
and food prices. | 10:28 | |
And then subside to rates significantly below | 10:30 | |
those experienced in 1973. | 10:32 | |
Unemployment for the year would average | 10:35 | |
a little above five and a half percent. | 10:37 | |
Well what's being said here is that | 10:41 | |
if we look to the four quarters of 1974 | 10:44 | |
as we should, then in the first quarter, | 10:47 | |
and possibly in the second quarter too, | 10:51 | |
there would be an actual decline in real output. | 10:54 | |
I would say that is a conservative estimate | 10:58 | |
of informed opinion outside of the government. | 11:04 | |
There are a few people who think that output | 11:09 | |
will be declining throughout | 11:12 | |
all the four quarters of the year. | 11:14 | |
I believe that Doctor Summers of the conference board | 11:17 | |
would be such a person. | 11:20 | |
But such people are in the minority, | 11:22 | |
and so although the council of economic advisors | 11:24 | |
is just a shade, a more optimistic, | 11:28 | |
then is the median forecaster | 11:31 | |
among the fashionable forecasters. | 11:35 | |
We can say they do deserve their B plus | 11:38 | |
because they are in the right ballpark. | 11:41 | |
On the other hand for the last half of the year, | 11:44 | |
they say that they will be an increase | 11:47 | |
stronger than trend. | 11:50 | |
It seems to me that that is a possibility | 11:53 | |
but just from considerations of continuity, | 11:56 | |
it would be a bit rash to expect that | 12:01 | |
the last half of the year would average annual rates | 12:04 | |
of real growth of more than four percent | 12:08 | |
because the trend rate for the American economy | 12:12 | |
is in the neighborhood of four percent. | 12:15 | |
Actually most people think just a bit above that. | 12:16 | |
So here I think the council of economic advisors | 12:20 | |
and the president's economic report | 12:26 | |
is just a bit too optimistic. | 12:27 | |
Now what about inflation, | 12:31 | |
certainly we can agree that inflation will be rapid | 12:33 | |
in the early part of the year. | 12:36 | |
We are now experiencing that, | 12:37 | |
we are not only still experiencing that | 12:38 | |
in the field of energy in the case of fuel prices, | 12:41 | |
in the case of gasoline, | 12:46 | |
and if there was not interference with the free market, | 12:48 | |
we would find even greater increases in those items. | 12:53 | |
But we're also beginning to see food prices rising. | 12:57 | |
The future's markets which are very quick to pick up | 13:04 | |
any changes in trends, | 13:07 | |
were extremely surprised a fortnight ago | 13:09 | |
when the official government report came out | 13:13 | |
and stocks of all the grains and all positions | 13:15 | |
turned out to be even lower than | 13:17 | |
the low expectations of the market | 13:20 | |
with a result that the grains went up, | 13:22 | |
the limit for several days in a row in some cases. | 13:24 | |
We've also had in the middle markets, | 13:30 | |
a contamination one might say | 13:33 | |
from the increase in the price of gold | 13:36 | |
so that the silver which is purely now | 13:39 | |
a speculative market not a market determined by | 13:41 | |
the useful photography and the supply from the mines | 13:44 | |
but by one speculator thinks another speculator | 13:48 | |
will think is gonna happen to the price of silver. | 13:51 | |
That has risen to an all time high indeed | 13:54 | |
it now pays to melt down 90 percent silver coins | 13:58 | |
and convert them into bullion at the present rate. | 14:05 | |
I doubt that they're enough of such coins | 14:09 | |
that are going through that process right now | 14:11 | |
to bring back that speculative bubble in prices. | 14:14 | |
But you're also beginning to have talk that | 14:20 | |
if O.P.E.C can create a successful monopoly | 14:24 | |
among the oil exporting countries, | 14:28 | |
why can't there be a successful monopoly | 14:30 | |
among the other metal companies. | 14:33 | |
What about aluminum, | 14:36 | |
firming up to aluminum price structure | 14:38 | |
by an international cartel. | 14:40 | |
What about firming up the price of copper | 14:42 | |
by an international cartel? | 14:45 | |
I think were even beginning to get gleams of glory | 14:47 | |
that maybe cocoa and coffee and sugar, | 14:50 | |
which have had their cartels in the past, | 14:53 | |
cartels which have broken down, | 14:57 | |
might hopefully again form cartels. | 14:59 | |
Well nobody need expect these particular micro-economic | 15:05 | |
shortages and increase in prices | 15:12 | |
to continue indefinitely. | 15:15 | |
So I think it would be rash in the last part | 15:18 | |
of the year to be projecting the same prejudice | 15:20 | |
increases in prices that we're experiencing | 15:25 | |
at the present time. | 15:28 | |
Nevertheless to say that inflation | 15:30 | |
in the last part of the year will subside | 15:34 | |
to rates significantly below those experienced | 15:40 | |
in 1973, if by that it's meant the average of 1973. | 15:42 | |
It seems to me runs contrary | 15:47 | |
to the evidence and to the testimony | 15:50 | |
of the majority of the forecasters. | 15:55 | |
It runs contrary to that evidence in the same direction | 15:58 | |
the government, this government and am sorry to say, | 16:01 | |
some previous governments have had in the past. | 16:06 | |
Namely good news ahead, bad news just ahead | 16:09 | |
because who could deny it | 16:13 | |
but good news in the form of pie in the sky | 16:16 | |
and a return to normalcy just ahead. | 16:18 | |
Finally it said that unemployment for the year | 16:22 | |
would average a little above five and a half percent. | 16:24 | |
If unemployment in the four quarters averages | 16:27 | |
a little above five and a half percent, | 16:30 | |
that means that unemployment towards the end of the year, | 16:33 | |
will be averaging very near to six percent. | 16:37 | |
And I would think that a safer betting number would be | 16:39 | |
in the neighborhood of five and two thirds percent | 16:47 | |
rather than in the neighborhood of five and a half percent. | 16:50 | |
A small difference perhaps you'll say, | 16:53 | |
but it's precisely that small difference that | 16:55 | |
can mean the difference in a key congressional election. | 16:58 | |
And it's also that difference which represents | 17:05 | |
the difference between good, disinterested, | 17:09 | |
professional forecasters from the outside | 17:14 | |
and what I shall say, are good but necessarily | 17:17 | |
not disinterested forecasters within any government. | 17:22 | |
Now this is their most probable path improbability. | 17:28 | |
But their hasten to say that although | 17:35 | |
there is no other path, | 17:37 | |
which seems as likely to them as this, | 17:39 | |
the spread of what is likely to happen | 17:42 | |
is a very wide one. | 17:46 | |
They also say that this is the path which will be realized | 17:49 | |
provided the policy recommendations | 17:54 | |
in the president's messages to congress | 17:57 | |
and in this economic report are followed. | 18:00 | |
And we seem to be very lucky in America, | 18:05 | |
the path we're gonna have is the path | 18:08 | |
which we ought to have. | 18:11 | |
Because they say that this is the most desired path, | 18:13 | |
in other words the policy is optimally designed. | 18:16 | |
Now there is a note of humility | 18:19 | |
and I think it is a very important note. | 18:21 | |
Namely that as information changes, | 18:24 | |
the administration is prepared to change its policy. | 18:29 | |
This is what is required of a government | 18:34 | |
by intelligent men, by intelligent administrations, | 18:39 | |
by intelligent congress. | 18:45 | |
As your information pattern changes, | 18:47 | |
you change your optimal behavior. | 18:49 | |
If this be fine-tuning of course, | 18:52 | |
then what we would require is fine tuning. | 18:56 | |
But that puts a pretentious claim to accuracy | 18:59 | |
which no informed modern economist ought to make. | 19:08 | |
And so let's say this is the sensible stabilizing | 19:12 | |
lean against the wind policy. | 19:17 | |
Many people said when the president said | 19:19 | |
there will be no recession in 1974, | 19:23 | |
in a state of the union message. | 19:27 | |
That this was just empty rhetoric, | 19:29 | |
this was one of those horrible examples of king Cnut | 19:33 | |
who is telling the waves not to advance | 19:36 | |
on the shore to his throne, | 19:40 | |
but because of his edict to stand back. | 19:43 | |
Well perhaps that is one way of reading it, and perhaps | 19:48 | |
that was a line designed to draw some applause. | 19:52 | |
Perhaps it was a line designed to gain | 19:57 | |
some temporary assurance for the american people. | 20:01 | |
But I read it in a different way, | 20:04 | |
perhaps I'm an incorrigible optimist. | 20:07 | |
I read that it meant that if necessary, | 20:09 | |
the president would do what was required | 20:13 | |
to keep this growth recession, this bare recession, | 20:16 | |
from snowballing if it showed some signs of doing so | 20:20 | |
into something much worse such as | 20:23 | |
a good old fashioned recession. | 20:26 | |
And I was heartened by this in the same way | 20:28 | |
that I was heartened when in at the end of 1953, | 20:31 | |
general Eisenhower our president Eisenhower then | 20:37 | |
made the statement, | 20:40 | |
that he would throw away the book of Orthodox | 20:41 | |
finance, I'm giving a paraphrase | 20:44 | |
for what it was that he said. | 20:46 | |
If necessary, so that the post Korean recession | 20:48 | |
would not accumulate and develop into | 20:53 | |
a more serious chronic slump or a depression. | 20:56 | |
Or even a more serious recession. | 21:00 | |
I know that any government which has the will | 21:03 | |
to take such opportunistic action if you like, | 21:06 | |
will have the power to do so, and to do so successfully. | 21:12 | |
I might call your attention by the way | 21:19 | |
to another statement which was made | 21:21 | |
in the state of the union message, | 21:22 | |
one that I've commented on already. | 21:25 | |
That the president explicitly said there that | 21:27 | |
he was not gonna listen to the prophets of gloom. | 21:32 | |
But he included in that two camps | 21:35 | |
and the second camp which believes | 21:38 | |
that the best policy ought to be to let 1974 | 21:42 | |
develop into a genuine recession. | 21:49 | |
Perhaps to let all four quarters of 1974, | 21:52 | |
show small negative real growth. | 21:58 | |
Why, well of course in the interest | 22:02 | |
of lasting improvement in the price inflation. | 22:04 | |
The president if he philosophically and scientifically | 22:10 | |
agreed with that as the best diagnosis, | 22:18 | |
is in no position to engage | 22:21 | |
in explicit policies based upon that. | 22:24 | |
Of course he could implicitly by impounding funds, | 22:27 | |
by doing things very quietly, | 22:31 | |
engage himself in part of such a policy. | 22:33 | |
But he doesn't have the political power now to do so. | 22:37 | |
But in any case, he asserted and let's assume | 22:39 | |
that the verbal assertion tells us something | 22:44 | |
about actual intentions. | 22:48 | |
He asserted that he would not be willing to deliberately | 22:50 | |
countenance a slow down or slump or recession in order | 22:59 | |
to fight the inflation despite the advice | 23:04 | |
of those who would urge that. | 23:08 | |
Now what does this mean with respect to fiscal policy? | 23:10 | |
It means an unbalanced budget. | 23:16 | |
The president says it's regretful | 23:18 | |
and most of the unbalance is due to necessitous expenditure | 23:21 | |
but I guess since he stuck with an unbalanced budget, | 23:24 | |
he might as well take the credit that | 23:28 | |
this is indeed what proper policy would require. | 23:32 | |
When we know that six months ahead and nine ahead | 23:36 | |
and twelve months ahead, | 23:39 | |
there's going to be surplus labor force | 23:40 | |
in comparison with the jobs that the American system | 23:45 | |
is gonna be able to give to them. | 23:47 | |
The budget will be just about balanced | 23:50 | |
maybe even a little bit of surplus | 23:54 | |
in terms of the old fashioned full employment budget, | 23:56 | |
if you define as your full employment budget | 24:00 | |
for a percent of unemployment. | 24:03 | |
But one of the most interesting sections | 24:05 | |
in the economic report, | 24:08 | |
is a discussion of what I ought to constitute | 24:10 | |
the level of full employment today. | 24:13 | |
And they give what they actual budget deficit would be | 24:16 | |
let's say now for calender year 1974, | 24:28 | |
the actual budget surplus or deficit for that year | 24:33 | |
if the president's program is enacted by congress | 24:40 | |
is minus five billion dollar deficit. | 24:44 | |
But if we use the full employment target of four percent, | 24:49 | |
and recalculate what our revenues would be | 24:55 | |
at that level and what perhaps | 24:59 | |
what a few of our expenditures | 25:00 | |
changes would be, | 25:01 | |
we find that the budget is essentially imbalanced. | 25:02 | |
It has a point two billion dollar surplus | 25:06 | |
and is really not worth talking about. | 25:09 | |
Then since there is some difficulties | 25:11 | |
in the calculation of the four percent unemployment | 25:14 | |
because the revenue is of the American government | 25:17 | |
are affected by the rate of inflation. | 25:19 | |
If you have four percent unemployment | 25:22 | |
but price is behaving the way they gonna behave now. | 25:26 | |
So standardizing for inflation rate, | 25:29 | |
you again have a balanced budget | 25:32 | |
or slight surplus of point three. | 25:34 | |
But with a variable unemployment rate, | 25:38 | |
which is the euphemism and I call your attention | 25:40 | |
to the table on page 31 | 25:42 | |
because it's one of the most interesting developments | 25:44 | |
of recent years. | 25:47 | |
We've known about it below the surface. | 25:48 | |
Those of us who've been able to read between the lines | 25:50 | |
of speeches by the administration | 25:52 | |
and know how the thinking has been going. | 25:55 | |
Realize that silver people inside the administration | 25:57 | |
do not think the four percent is a feasible target. | 26:02 | |
And because there are so many young people | 26:04 | |
in the labor force, and they have a higher propensity | 26:07 | |
to have unemployment | 26:09 | |
because they are so many. | 26:10 | |
Part time women in the labor force | 26:11 | |
and increasing number of those in comparison | 26:13 | |
with earlier periods. | 26:15 | |
If four percent was the proper goal | 26:16 | |
in those earlier periods, | 26:19 | |
then at the present time, a higher unemployment rate | 26:20 | |
and 4.6 percent I believe for 1973 | 26:24 | |
is now the magic number. | 26:29 | |
And on that basis, it looks as if we're going to have | 26:31 | |
a small deficit. | 26:33 | |
I do not say this by way of criticism | 26:36 | |
because if anything it seems to mean this deficit | 26:38 | |
is too small. | 26:41 | |
I would also say that the priorities that are involved | 26:42 | |
in this kind of a deficit with the expenditure program | 26:45 | |
given in the tax program | 26:48 | |
are not my own priorities. | 26:49 | |
And that's why I cannot consciously offer an A minus | 26:52 | |
or an A plus to this report. | 26:56 | |
It's a best a B plus. | 27:00 | |
What about monetary policy? | 27:02 | |
Of course all of us attach importance to money, | 27:05 | |
but some of us attach ,more importance | 27:10 | |
what they have said. | 27:13 | |
And it's really a very brief passage, | 27:15 | |
it's amazingly brief. | 27:17 | |
I would say amazingly naive. | 27:19 | |
What they say is that in the past, | 27:22 | |
the stock money broadly defined | 27:26 | |
which is M2, which is ordinary currency | 27:32 | |
outside the banks. | 27:36 | |
Ordinary demand checkable deposits. | 27:37 | |
And also time deposits perhaps with some large CD's | 27:40 | |
left out just so we won't get | 27:44 | |
some contamination from regulation too. | 27:47 | |
That has been proportional to amount of nominal G.M.P. | 27:49 | |
In other words, it's had a constant velocity | 27:55 | |
of circulation of money | 27:58 | |
for the last several years. | 27:59 | |
Overall they point toward a myth | 28:01 | |
that there have been some short term swings. | 28:06 | |
The result is that since their optimal policy goal | 28:08 | |
and best expectation is that there ought to be | 28:14 | |
and will be a eight percent increase | 28:17 | |
in money G.M.P for the year, if M2 has a constant velocity | 28:19 | |
then to realize that M2 ought to grow at eight percent. | 28:24 | |
Now my time is just about up but it seems to me | 28:29 | |
that in a recession year this is definitely too low. | 28:32 | |
Because it's very hard to calibrate. | 28:38 | |
You can get some ideas of this if you turn to the table | 28:40 | |
on page 82, what's relationship is between | 28:44 | |
M2 and M1 the monerally defined. | 28:47 | |
But I guess one would have to assume | 28:50 | |
that eight percent on M2 would correspond | 28:53 | |
to something like five or five and a half percent on M1. | 28:58 | |
And it seems to me that if that is a proper average figure | 29:02 | |
over a decade or over several years | 29:06 | |
over a business cycle, | 29:11 | |
then you ought to be exceeding that number | 29:13 | |
in the first onset of the recession. | 29:17 | |
When as you look ahead six months, | 29:22 | |
nine months and twelve months. | 29:25 | |
You find unemployment higher than socially | 29:27 | |
it ought to be. | 29:30 | |
Well there are many good things in this report, | 29:33 | |
I wish I had time to go over with you | 29:36 | |
the discussions of inequality. | 29:39 | |
It is extremely interesting showing there's been | 29:41 | |
some slow progress. | 29:45 | |
But definite progress apparently | 29:48 | |
in the relationship of black earnings to white earnings. | 29:50 | |
Unfortunately there is no similar progress | 29:53 | |
for female earnings relative to male. | 29:57 | |
But as a mitigating circumstance, | 29:59 | |
the report points out that the more and more women | 30:02 | |
are coming into the labor market | 30:05 | |
and on a part time basis without the sustained experience | 30:06 | |
which makes for a higher earnings. | 30:12 | |
It's nice then to be able to give a higher grade | 30:14 | |
to a government document like this because of course | 30:21 | |
we're all in the same spaceship together | 30:24 | |
and we want that pilot to be skillful | 30:26 | |
since we're the passengers who ride with him. | 30:31 | |
- | If you have any comments | 30:35 |
or questions for Professor Samuelson, | 30:36 | |
address them to Instructional Dynamics Incorporated. | 30:37 | |
166 East Superior Street, Chicago Illinois 60611. | 30:40 |
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