The Economy: I

March is the cruelest of months, yet for President Eisenhower it symbolizes the nation's return to prosperity and happiness. The President is noted for his ability to generate confidence, but his speech last Wednesday was an unfortunate voyage into a never-never land of economic prognostication with no advice offered but these magic words, "Chins up!"

For those 4 1/2 million men currently enjoying the economic recession, the President's speech no doubt reminds them of the prophet's voice speaking from the wilderness. It is, unfortunately, a wilderness of darkness, ignorance, and confusion, in which President Eisenhower seems to be helplessly lost.

Since early last fall, there has been what the President terms a "downturn in our economy." Unemployment, even adjusted for seasonal variation, has increased considerably. Production has dropped almost ten per cent from the December, 1956, peak. Retail purchasing is down and capital investment has been declining steadily since November.

What characterizes the current economic recession as unusual is not its excessiveness (it has yet to match the 1953-54 recession), but the marked inability of the Eisenhower Administration to deal with it effectively and intelligently.

The Administration has expressed its unwillingness to introduce any anti-recession proposals at this time, not only because it feels that conditions do not warrant such action, but because, as the President noted, it believes "that we have had most of our bad news on the unemployment front."

Expressions of confidence, such as made by the President, are faintly reminiscent of Hoover's optimism, which grew progressively stronger as the Great Depression spread westward. Economists more reputable than the President not only claim they will not know the exact causes of the recession until the statistics are all in, but they have almost to the man refrained from predicting the date when the economy will return to normalcy. As Professor Galbraith of Harvard observed recently, "Generals, at least in the past, did not plan campaigns on the assumption that the enemy would conveniently disappear."

There is much that can be done to relieve the plight of the unemployed, yet the President has assumed that conditions will work themselves out in time. On a more positive level, state and local governments are fast using up their relief funds, and for many workers, unemployment benefits, which are generally paid only for a 26-week period, are fast being exhausted.

Under such circumstances, the federal government must assume its responsibility as defined by the Employment Act of 1946 to provide for "maximum production, full employment, and purchasing power." This it has yet to do with any willingness or effectiveness.