Tape 70 - S.S.T. Oil Import Quotas, Interest Rates

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-	Hello, this is William Clark	0:02
	with the Chicago Tribune.	0:03
	Welcoming you once again on behalf of Instructional Dynamics	0:04
	to a visit with the eminent economist,	0:08
	Professor Milton Freedman of the University of Chicago	0:10
	and we're recording this interview on Monday, March 29	0:14
	and Milton, I believe we said last time	0:18
	that we would devote this session	0:20
	to questions from your subscribers	0:21
	and one subscriber asks you to comment generally	0:24
	on this matter of the SST.	0:27
	I'm not myself just how you stand on that.	0:29
	What is your reaction?	0:32
-	Well on the whole,	0:34
	I think the House and Senate did the right thing	0:35
	in killing government subsidies for the SST.	0:38
	The thing that fascinates me about the SST issue is	0:42
	that I believe that both the major reasons	0:45
	why people voted for it, for federal subsidies	0:49
	and the major reasons why others have voted against it	0:53
	are largely irrelevant to the true issue.	0:56
	That there are some, there is a real issue	0:58
	which was largely buried in the amount of rhetoric	1:00
	that was poured out.	1:04
	On the one side of it,	1:05
	the talk about the ecological damage,	1:06
	the damage to the atmosphere was I think,	1:09
	enormously overstated, but was involved	1:10
	in a couple of prototypes and even a larger number of SSTs.	1:13
	The magnitude of the effect is likely	1:18
	to be of a far smaller order of importance	1:20
	than most of the ecological arguments.	1:24
	In any event, the ecological arguments depend	1:27
	on the existence of an SST and not of a U.S. built one.	1:29
	Exactly the same problems would arise from Russians,	1:32
-	I see.	1:35
-	Or or British man.	1:35
	The one aspect of that which is a valid argument	1:36
	is of course, the noise effect,	1:39
	the the sonic boom effect, but that was taken care of	1:41
	by the provision accepted by all parties at SST flights	1:45
	that super sonic speeds would be only over water	1:49
	rather than over land and hence that issue was ruled out.	1:52
	so I think the ecological arguments	1:55
	against the SST were mostly nonsense.	1:56
	I don't mean to say that the preservation	2:00
	of the atmosphere and so on is not an important issue,	2:03
	but that there was an over talk about this verging	2:06
	on hysteria and verging on deliberate misrepresentation	2:11
	of the seriousness of the problem.	2:14
	On the other side of the issue,	2:16
	I think I would condemn just as strongly,	2:17
	the major arguments that were made by the administration	2:20
	in favor of further subsidy to the SST.	2:23
	Indeed, I think Mr. McGruder's testimony,	2:26
	McGruder is a gentleman who was formerly in charge	2:29
	of the Lockheed 1011.	2:33
	Indeed, he seems to have a record for being in charge	2:34
	of disastrous (mumbles).	2:37
	The Lockheed 1011 was in terrible trouble	2:39
	because of the Rolls-Royce business	2:41
	and now he was in charge of selling the SST program	2:43
	at the administrative level.	2:46
	I read his testimony before Congress	2:47
	and I think it was a disgraceful bit of testimony.	2:50
	Disgraceful in the sense that we hired public officials	2:53
	in order to represent us,	2:55
	not in order to make the breach for our particular program	2:57
	regardless of the validity of the arguments made.	3:02
	I think it is intolerable, a man in Mr. McGruder's position	3:05
	should have made the kind of arguments he made	3:08
	which he knew were false	3:10
	for which he, I'm sure he knew they were wrong,	3:12
	but which he made	3:14
	because he felt they would be the most persuasive.	3:15
	Let me illustrate.	3:17
	One of his strong arguments was that,	3:19
	continuing with the work on the SST	3:21
	would mean 50,000 jobs directly	3:23
	in the aerospace industry.	3:26
	Well that's a correct argument, that would mean 50,000 jobs,	3:27
	but it's not a relevant argument in the sense	3:30
	that spending the same amount of money somewhere else	3:32
	would mean 50,000 jobs somewhere else.	3:34
	You're not going to spend this instead of nothing.	3:36
	But even if we accept that argument,	3:39
	for a moment let's accept it on the ground	3:41
	that there is especially high incidents of unemployment	3:43
	in the Seattle area and that maybe there's something special	3:46
	to be said about that.	3:49
	So let me accept that as an acceptable argument.	3:50
	The next stage of it was to say that each job directly	3:53
	in the aerospace industry would produce two jobs indirectly	3:57
	through a multiplying process.	4:01
	That is to say that the people who had the jobs	4:03
	would by food, clothing and so on	4:07
	and therefore he said really, you are talking	4:09
	about 150,000 jobs.	4:10
	Now this second stage is utterly indefensible	4:12
	because obviously any the other expenditure	4:15
	of dollars elsewhere would create	4:17
	the same multiplier effect.	4:19
	So if it were put the other way around,	4:21
	if you finance this SST by raising taxes,	4:22
	each dollar of tax removal	4:25
	will then have a negative multiplier effect of two.	4:27
	So that the multiplier effect was utter errant nonsense.	4:30
	Then the same thing goes for the argument he was making	4:33
	about balance of payments.	4:35
	And this, if you looked at it, it was ludicrous	4:37
	in terms of the balance of payments of facts	4:40
	that were being attributed to the SST.	4:43
	Added everything but the kitchen sink in	4:46
	and came out with numbers that are incredible.	4:48
	In any event, we ought not to be concerned	4:50
	about the balance of payments.	4:52
	That's not a real issue, that's a pseudo-issue.	4:53
	That's only an issue of the exchange rate	4:56
	and not an issue of substance.	4:58
	What that is in my opinion the real issues in the SST.	5:01
	The real issue I do not believe,	5:04
	is whether the SST should be built, that's a false issue.	5:06
	The real issue is	5:10
	whether the government should subsidize its building.	5:11
	If the SST is a commercially viable project,	5:14
	there is no reason	5:18
	why private enterprise should not build it	5:19
	and indeed there is every reason for it to build it.	5:21
	If the SST is not a commercially viable project,	5:24
	if it is viable only by government subsidy,	5:26
	well then, we should not build it	5:29
	because that's just throwing money away.	5:31
	Indeed from any point of view of jobs	5:33
	or of balance of payments, we'd better use our resources	5:35
	in the most efficient way.	5:39
	Put it differently, almost everybody is opposed	5:42
	to simple make work projects involving digging holes	5:45
	in the ground and filling them up again.	5:48
	Well if the SST is not a commercially viable project,	5:50
	then subsidizing it in order to build it,	5:54
	is precisely identical to such a make work project.	5:56
	It is only a more sophisticated, complicated	5:59
	and concealed way of digging holes	6:00
	in the ground and filling them up.	6:02
	It was on this ground primarily,	6:04
	that I was opposed to the SST.	6:06
	I was opposed to it on the ground	6:08
	that it was undesirable governmental subsidization	6:10
	of private ventures.	6:13
	I have been opposed to subsidizing the Penn Central.	6:14
	I am opposed to subsidizing the oil (mumbles).	6:17
	In general, I think one should have a consistent view	6:21
	and a believer in free enterprise	6:24
	in a competitive enterprise system	6:26
	should be opposed to governmental subsidies	6:29
	of private ventures.	6:31
	Now there is only one other argument I think	6:33
	that I left out, which has some merit	6:35
	and this has to do	6:37
	with the possible military spinoff from the SST.	6:38
	Interestingly enough,	6:42
	the administration made almost nothing of this argument.	6:43
	They did not claim	6:46
	that there was any direct military effects,	6:47
	and yet I believe, if you ask why is it,	6:49
	in light of what I just said	6:51
	that the administration was so strongly in favor of it.	6:52
	Why is it indeed that if you look at the people who voted	6:55
	for the subsidy of the SST, you will find among them	6:57
	the strongest components of a free enterprise system.	7:01
	Even though it seems to me it's inconsistent	7:03
	with their values.	7:05
	That is people like Senator Barry Goldwater,	7:06
	Senator Peter Dominic, Senator Brock.	7:10
	These are people, all of them are strong components	7:13
	of the free enterprise system	7:15
	and yet they weren't on the side of those voting for it.	7:17
	Well I think the answer there is to be found	7:19
	in a kind of an indirect military spinoff.	7:21
	I believe there is a feeling among many people	7:24
	and one which I share.	7:26
	That that public attitudes of the moment have turned	7:28
	so strongly against the military	7:30
	and against the defense establishment	7:32
	that we are in great danger of cutting our defense down	7:34
	to a dangerous low level, particularly in the area	7:39
	of the more sophisticated technological developments	7:43
	in aerospace, and I believe the one valid argument	7:46
	for the SST was that it is in the national interest	7:50
	to maintain a larger aerospace industry	7:53
	for purposes in military purposes	7:55
	that the SST may have no direct military spinoff	7:58
	but it would maintain that aerospace industry in Bing.	8:02
	One that consequently, when public mood changed later on,	8:06
	when the public became more receptive	8:09
	to a larger military effort you would be able	8:11
	to take over this part of the SST.	8:14
	I think in a way that's a valid argument	8:16
	but I find it a very difficult one to accept	8:18
	because it seems to me to be saying	8:21
	that you can fool the people into doing something indirectly	8:22
	that they won't directly vote for and I sort of think	8:25
	that it's politically not a position I would want to accept.	8:28
	Now, I might say one more thing about the SST.	8:32
	As I say, if it a a privately viable project	8:36
	then it should be continued.	8:40
	Now, I may say, I wrote some letters along the line	8:42
	of what I've been saying and talked to some senators	8:44
	in connection with the SST before it was passed	8:47
	and several of them raised the question,	8:50
	well we've now put in so much money,	8:52
	seven or 800 million dollars,	8:54
	shouldn't we put in the extra three or 400 million dollars	8:55
	to finish the test.	8:57
	Well that argument seems to me, to work the other way.	9:00
	The private aerospace industry Bowing and the others	9:03
	have already gotten a subsidy of 700 million dollars.	9:05
	And if even with that advanced subsidy,	9:08
	it isn't worth finishing,	9:10
	it surely must be a bad commercial venture.	9:11
	Now, I'm not sure it is a bad commercial venture,	9:15
	despite all the talk that this could not be done privately,	9:18
	my own prediction will be that the SST will be built	9:21
	on a private basis, stretched over a longer period of time	9:25
	to make it commercially feasible.	9:28
	And if it is done, more power to it.	9:30
	If it is not, well then I think	9:33
	the market has expressed its judgment	9:35
	and that judgment has been	9:37
	that this would have been a terrible waste of money.	9:39
	Again, the same argument applies when people say	9:42
	well, but the French are doing it	9:44
	and the Russians are doing it.	9:45
	If they are doing it, don't we have to do it	9:46
	even though it isn't commercially viable project	9:48
	and the answer to that seems to me very clear.	9:50
	Let's suppose it is not a commercially viable product.	9:53
	That means that the Russians	9:56
	and the British are throwing money down the drain.	9:57
	Are we really strengthening ourselves by joining them	10:00
	in throwing money down the drain?	10:02
	It reminds me of the old story about the man who said	10:04
	that he lost on each item he sold but he made (mumbles).	10:07
	Well, if the uh if the Anglo French Concorde is going	10:10
	to be a commercial failure, if its not going to be viable,	10:15
	and if that's an argument,	10:18
	by then that simply means that the British	10:20
	and the French are throwing away some of their money.	10:21
	If you ask and look back over our own record,	10:24
	we have been the major supplier	10:27
	of commercial aircraft to the world.	10:30
-	That's right.	10:32
-	But we have been it without subsidies.	10:33
	We have been it because on a purely commercial basis,	10:34
	companies were able to make money	10:37
	in producing an efficient and effective airplane.	10:39
	Well, I think that will continue to be the case	10:42
	and so I'm perfectly willing to leave the issue up	10:44
	to the market and not have the government try	10:46
	to second guess the market.	10:48
	Well, every bit of experience I know of suggests	10:50
	that the government does a very poor job	10:54
	in second guessing the market.	10:56
-	(chuckles) That's a very interesting approach.	10:58
	Another subscriber sends in a copy of a magazine published	11:00
	by a Standard Oil Company of Indiana	11:05
	with an article or a letter in the front part of it	11:08
	by the chairman of that company, John E. Swearingen.	11:11
	The heading on his piece is,	11:15
	Oil Import Controls Prove Their Value Again.	11:18
	He cites a couple of items,	11:23
	The shutdown of the Trans Arabian pipeline	11:25
	carrying oil across Syria to the Mediterranean	11:28
	and a threatened East coast shortage	11:30
	of residual fuel and he concludes with this paragraph,	11:33
	these two examples provide a forceful reminder that oil	11:36
	from foreign sources cannot be considered secure in regard	11:40
	to either deliverability or cost.	11:44
	They also attest the wisdom of national policies designed	11:46
	to maintain an adequate domestic productive capacity	11:50
	to safeguard the nation's interest, and the subscriber asks	11:54
	if you would comment on that statement.	11:57
-	I would be very glad to comment on it	11:59
	because I think this is a typical kind of a statement	12:01
	that you would have from able well-meaning people	12:04
	like Mr. Swearingen and similarly from his counterparts	12:07
	in the steel industry.	12:10
	You are asking for steel import quotas and they justify it	12:10
	in terms like, adequate domestic productive capacity	12:14
	to safeguard the nation's enemies.	12:19
	Now, if I said to Mr. Swearingen,	12:21
	you're about to build a new refinery	12:23
	in order to have adequate protective capacity	12:28
	and I said to him, now did you have any cost estimates made	12:32
	when you were thinking of building that refinery	12:36
	or did you decide it was just in your interest to do it.	12:37
-	Well, he'd say what did you mean.	12:40
	Of course I had cost estimates made	12:41
	because if it were too expensive,	12:44
	it wouldn't be in our interest.	12:45
-	Well one of the things that has fascinated me	12:47
	about the business components	12:48
	of things like oil import quotas and steel quotas	12:52
	by Mr. Swearingen and the heads of U.S. steel	12:55
	and (mumbles) Steel is that I have yet	12:58
	to see any single one of them	13:00
	give the nation a cost estimate of how much it costs	13:02
	to acquire in his words, what he regards	13:05
	as an adequate domestic productive capacity.	13:08
	Can you decide that without cost?	13:11
	Here, we have been having a system of oil import quotas	13:13
	and other oil interferences,	13:16
	which various people have estimated	13:19
	may have cost the American consumer	13:20
	up to five five billion dollars a year.	13:22
	Now five billion may be a little overestimate	13:24
	of what it costs us.	13:27
	It may be that it, because some of that isn't real cost,	13:28
	some of that is a transfer from some people to the other.	13:31
	I don't know what the exact figure is, but I do know	13:34
	that even if we accept a hundred percent their arguments	13:37
	that this is a way to improve national security.	13:40
	We cannot accept them without some dollar totals attached	13:44
	to it and knowing whether the gains we get	13:48
	are worth the cost.	13:50
	It's an extremely un-business-like way to proceed.	13:51
	Mr. Swearingen and his counterparts	13:54
	in the steel industry say,	13:55
	regardless of what it costs the country,	13:56
	you must limit it.	13:58
	Now lets go back to the detailed argument	14:00
	and see whether even the,	14:02
	what I'm saying is even if we accepted his full argument	14:04
	about the benefits of the oil import quotas,	14:07
	there is an aspect of it that hasn't been brought up	14:09
	and that is what is its cost	14:11
	and are there cheaper ways to acquire them.	14:13
	But even the benefits are very spurious	14:15
	and do not require oil import quotas to achieve.	14:17
	Look at the case he brings up about the possibility	14:21
	that foreign oil will be expensive because of such things	14:24
	as a shutdown of the Trans Arabian Pipeline	14:27
	or because of what has been happening with respect	14:30
	to East Coast shortage of residual fuel, and let's ask,	14:33
	what in the world the private enterprise system is for?	14:37
	If indeed there is a prospect of occasional interruptions	14:40
	of supply, which will make the price of fuel	14:45
	of oil very high, that is an inducement	14:47
	without oil import quotas,	14:50
	without special government intervention	14:51
	for domestic oil enterprises	14:53
	to maintain a larger production of oil	14:55
	than they other wise would	14:58
	and that's just the right inducement	15:00
	because if you ask how much ought we to spend extra	15:02
	in times when there's plentiful foreign oil	15:06
	in order to preserve a domestic supply for a time	15:10
	when there will be a shortage of future foreign oil,	15:13
	well, the answer to that question is given precisely	15:16
	by the private enterprise calculation without any subsidy.	15:19
	It's worth spending as much money as is equal	15:23
	to the present value of the future higher price	15:26
	you would otherwise pay	15:29
	and that's what private enterprises,	15:30
	private oil companies would have an incentive to spend.	15:32
	So that the argument	15:35
	that we might occasionally have a shortage	15:36
	of very high cost foreign fuel is not a valid justification	15:37
	for oil import quotas in so far	15:42
	as that shortage of foreign fuel would be reflected	15:47
	in a higher domestic price.	15:49
	Now, the other component of the argument is that well,	15:53
	that's, what you say is perfectly right so far	15:56
	as a civilian in ordinary use is concerned,	15:58
	that can be measured by the price consumers would have	16:00
	to pay and we have an incentive to avoid that	16:02
	but what about the national defense argument they will say.	16:05
	How can you put a price on that?	16:07
	Suppose we got stuck in the future without enough oil.	16:09
	Well, that's a valid question	16:12
	and an issue that ought to be faced	16:13
	but then that issue has to be faced	16:15
	in what are the alternative ways of providing for it.	16:16
	And the answer to that turns out to be	16:19
	that in the first place, if you consider,	16:22
	well, I may say that with the present prospects	16:25
	of the kind of a national,	16:28
	of a worldwide war you might have	16:29
	of a nuclear Holocaust that doesn't look	16:32
	as if there's much a problem of maintaining oil supply.	16:35
	But let's suppose we would be facing a more	16:37
	of a historical-type of a drawn out war,	16:41
	where there might be.	16:43
	Well, the first thing to be said is	16:45
	that the cheaper the oil you've been having	16:47
	through foreign imports as well as domestically,	16:51
	the larger the domestic consumption of oil will be	16:54
	and the greater the feasibility will be	16:58
	of cutting down that domestic consumption	16:59
	in time of emergency in order to provide the limited amount	17:02
	of oil which will be needed	17:05
	for military and essential purposes.	17:06
	The second answer there is	17:09
	that much of the so called foreign oil	17:11
	which is affected by oil import quotas comes	17:13
	from parts of the world	17:15
	which would not in any way be threatened	17:17
	in the case of a war.	17:20
	For example, there is certainly no justification	17:22
	for oil import quotas against Canadian oil on this ground	17:25
	and yet in the past they have been affected.	17:27
	There is very little justification for our oil import quotas	17:30
	in Venezuelan oil on this on this ground	17:32
	because that's likely to be in the area we control	17:35
	and yet in both cases,	17:38
	there have been from time to time, oil import quotas	17:40
	although they have been more liberal	17:42
	for Venezuelan candidates as for other countries.	17:46
	The third answer is that there are many other ways	17:49
	of providing for a stockpile of oil.	17:51
	One way of providing	17:54
	for a stockpile of oil is literally to store it.	17:55
	Another way is to maintain certain fields	17:58
	in a ready condition to produce but not produce it.	18:00
	So that there are many alternatives and particularly	18:03
	on this national defense argument,	18:06
	it seems clear that the thing to do is	18:07
	to calculate what's the cheapest way	18:08
	and it's very hard for me to believe	18:11
	that the cheapest way to maintain an oil reserve	18:13
	in time of national security is	18:16
	to require every oil consumer of oil in the United States	18:18
	to pay a higher price all the time	18:21
	and yet that's essentially what Mr. Swearingen	18:23
	and others say.	18:26
	So I think my belief and my answer to this is	18:28
	that I believe one of the great virtues of doing,	18:31
	of providing for the national defense explicitly	18:37
	is that it would make the cost open and above bar	18:40
	and you would know what it is.	18:42
	The great defect of this kind of oil import quota is	18:44
	that nobody knows what it is costing us,	18:46
	what we are paying, how much of it is necessary	18:49
	and how much it is not.	18:51
	So I am afraid Mr. Swearingen's argument does not lead me	18:52
	to depart from my free trade position.	18:55
-	(laughs) Here's another letter	18:58
	from a subscriber in Nashville.	18:59
	He writes a nice note, several comments and says,	19:02
	if I could put all this in a short question	19:06
	for Dr. Freedman to answer,	19:08
	perhaps I would ask, what was the cause of the decline	19:10
	in interest rates in 1970	19:13
	and what will happen to them in 1971?	19:16
-	The interest rate movements in 1970	19:19
	and the likely interest rate movements in 1971,	19:21
	fit very well into a pattern of past relationships.	19:25
	As I have emphasized earlier, there are two sets	19:30
	of influences on inter,	19:35
	or around let me say, three sets of influences	19:36
	on interest rates that need to be distinguished.	19:38
	One is, the effect of monetary changes	19:41
	of a growth in the quantity of money	19:46
	or a decline in the quantity of money.	19:48
	The second is the effect of changes in the real demand	19:50
	and supply of capital	19:54
	and the third is related to these other two,	19:56
	the problem of inflationary expectations.	20:00
	Let us look at 1970 in that context.	20:03
	With respect to the first of those,	20:06
	in about February 1970,	20:09
	the rate of change of the quantity	20:11
	of money stepped up very sharply.	20:12
	What we have argued many times,	20:15
	the initial effect of that is to lower interest rates.	20:17
	The initial effect of it is to lower interest rates	20:20
	because the way in which the Feds steps up the quantity	20:22
	of money is by engaging in larger open market purchases	20:25
	of government securities.	20:29
	This tends to raise the price of the government securities	20:31
	to lower the interest rates.	20:33
	In addition, it tends to mean that banks have more reserves	20:35
	than they had before.	20:38
	This increases their lending power.	20:39
	So one factor which undoubtedly press downward	20:41
	on short-term interest rates in 1970 was the more rapid rate	20:45
	of growth in the quantity of money.	20:50
	Consider the second of those factors	20:53
	of demand and supply of loans.	20:54
	In 1970, you were having a declining demand for loans	20:57
	by virtue of the recession that was setting in.	21:01
	This was a delayed effect of the lower rate	21:03
	of monetary growth a year early	21:06
	and it illustrates the second part of what I have emphasized	21:08
	about the effect of monetary change on interest rates.	21:11
	That its initial effect of more rapid monetary growth	21:14
	is to lower interest rates.	21:18
	But the delayed effect after a period is to raise them.	21:19
	As the increase in the quantity of money seeps	21:23
	through the economy,	21:27
	starts to make the economy grow more rapidly,	21:28
	gets into a period of expansion and raises demand.	21:31
	Well, this was what was happening in reverse in 1970.	21:34
	You had had a slow down	21:37
	on the rate of monetary growth in '69.	21:38
	Its initial effect had been to raise interest rates	21:40
	and interest rates did go up sharply in '69,	21:43
	but its delayed effect as it produced a recession was	21:45
	to lower the demand for money, for loans	21:49
	by, I shouldn't use money in that sense,	21:53
	'cause I really want to talk about credit	21:56
	and I like to distinguish between money and credit	21:57
	To lower the demand for credit	22:00
	and in this way, produce downward pressure on interest rates	22:01
	through the recession.	22:05
	Those are the two factors so far mentioned.	22:06
	The third factor of inflationary expectations is also	22:08
	in large measure, a delayed effect of the monetary change.	22:12
	In 1969, the rate of inflation was speeding up	22:16
	throughout the year and this contributed	22:19
	to keeping interest rates high and raising them.	22:21
	In 1970, the rate of inflation stabilized	22:24
	and then the latter part of the year,	22:27
	started to come down.	22:29
	From a rate of rise of prices of six and a half percent of	22:30
	at about the turn of '69 to '70.	22:33
	By the end of 1970, prices were rising at a rate of four,	22:36
	four and half percent.	22:39
	So that was the third factor which contributed	22:40
	to the decline in interest rates	22:43
	and therefore we have all three of these factors working	22:45
	in the same direction.	22:47
	A short term effect of rapid monetary growth,	22:49
	the delayed effect of earlier, tighter monetary growth	22:52
	on business activity and therefore the demand for loans	22:56
	and the delayed effect, earlier, tight money	23:00
	on price inflation.	23:03
	Now, if we look forward into 1971,	23:06
	two of these factors will be working	23:11
	in the opposite direction.	23:12
	That is to say,	23:14
	we will now be experiencing the delayed impact	23:16
	of monetary growth.	23:19
	We are having a continued rapid rate of monetary growth	23:21
	but it's not a more rapid rate of growth than before.	23:24
	It's a continued rate	23:27
	so there is no further downward pressure on interest rates.	23:28
	However, its delayed effect in producing the recovery	23:31
	which I believe is now underway, the expansion,	23:34
	is and will be raising the demand for loans	23:37
	and this will tend to raise interest rates.	23:41
	Finally, I think the rate of price inflation will continue	23:43
	to taper off for a while, but whether it does for very long	23:46
	depends on how rapid monetary expansion is	23:50
	and it may be, the pace of inflation will speed up	23:53
	toward the end of the year.	23:55
	Putting all those together, I would say the prospects	23:57
	for interest rates is	23:59
	that short-term interest rates will definitely rise	24:00
	during most of the year, long-term interest rates,	24:02
	which are more responsive to the expectations of inflation	24:05
	may continue to decline, but if so, moderately.	24:08
-	Thank you.	24:11
	If you other subscribers would like to suggest questions	24:12
	for Dr. Freedman to discuss on future tapes,	24:14
	please write your suggestions to Instructional Dynamics	24:17
	166 East Superior Street, Chicago Illinois 60611.	24:20
	We'll be visiting with Dr. Freedman again two weeks hence.	24:26

Item Info

Title:

Tape 70 - S.S.T. Oil Import Quotas, Interest Rates

Date:

1971

Contributor:

Friedman, Milton, 1912-2006

Subject:

Format:

audiocassettes

Language:

English

Digital Collection:

Paul A. Samuelson papers, 1933-2010 and undated

Source Collection:

Paul A. Samuelson papers, 1933-2010

Series:

Economics Cassette Series: Milton Friedman

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ref2664_90h
samuelsonpaul
duke:325284
pstau001261
ark:/87924/r4tt4g904
37310bed-bfb8-4a2f-87df-32b49bf6458c

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Tape 70 - S.S.T. Oil Import Quotas, Interest Rates

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