Business review; Nixon's approach to inflation
From the national educational radio network here is a Business Review ASSOCIATE PROFESSOR ROSS Wilhelm of the University of Michigan Graduate School of Business Administration presents his views and comments of business and economic activity. The approach of the Nixon administration to the problem of inflation is sensible on an overall basis the administration along with the Federal Reserve Board is using monetary and fiscal restraints to reduce the effective demand for goods and to reduce the rate of expansion of the money supply. However these measures have not worked as rapidly as has been hoped and in recent weeks the administration has supplemented them with other measures. The new additional approach is seen most clearly in the case of the lumber industry. Since last October lumber prices have been rising more rapidly than any other prices in the economy. Here the new approach includes attempts to reduce the demand for lumber by ordering the Pentagon to reduce its lumber purchases to a minimum.
In addition the president has sought to expand the supply of timber by ordering the agricultural and interior departments to make more timber available from government lands. Further action is being taken to increase the number of box cars available to ship lumber from the west coast since it's believed that a shortage of such cars also as a factor in the price increase. It should not be expected in the case of lumber that the administration's new tactic will have an immediate effect upon the prices. The Defense Department cannot reduce its demand for lumber overnight since it uses lumber for such things as constructing buildings making shipping cartons and so on and changes in these uses require redesigning the buildings and finding acceptable substitutes for wood which does take time to accomplish. In addition the attempts to increase the supply through the expansion of the event of available timber from the agricultural Interior Department lands will also not work instant miracles on prices. However over time such measures
may help although the major way that prices will come down through a decline in home building due to high interest rates and tight money. There is an area however where prices have been rising sharply recently where the approach of increasing the supply could work wonders are in a relatively short period of time. This is with gasoline prices in recent weeks gasoline prices have increased from one to four cents a gallon across the nation. This is due largely to a rise in the price of crude oil. The president could take action to increase the supply of crude oil which would tend to reduce the price of gasoline. The price of crude oil in the United States is about twice as high as it is in the world market. The reason the price is so high here is because the Congress has imposed a quota system which limits the importation of crude oil and our country. The purpose of keeping foreign oil out is simply to keep the marginal oil wells of our country producing oil which they would not be doing if we didn't have the
quotas. Actually if we were to eliminate the oil import quotas and to allow inexpensive crude to come in the price of gasoline would drop by 5 or more cents a gallon. There is no meaningful military reason why we continue to exclude foreign crude oil. There is more than enough oil in Canada now Alaska to supply the needs of our nation for years to come even if we were to stop producing within the continental United States. In addition the oil import quota system makes a mockery of the claims of our government that we support a fully free trade policy. The oil import quota system seriously undermines the attempts of our government to persuade other countries of the world to reduce their barriers to American goods. The main reason why we have excluded cheap foreign crude oil is because we're seeking to enrich the producers of oil and also because some crude oil is produced in about half of our states and each state has two senators. The action which the administration should
- Business review
- Nixon's approach to inflation
- Producing Organization
- University of Michigan
- National Association of Educational Broadcasters
- Contributing Organization
- University of Maryland (College Park, Maryland)
- AAPB ID
- Episode Description
- In program number 407, Ross Wilhelm discusses the Nixon administration's approach to dealing with inflation.
- Other Description
- This series, hosted by Ross Wilhelm, focuses on current news stories that relate to business and economic activity.
- Broadcast Date
- Media type
Producing Organization: University of Michigan
Producing Organization: National Association of Educational Broadcasters
Speaker: Wilhelm, Ross, 1920-1983
- AAPB Contributor Holdings
University of Maryland
Identifier: 61-35c-407 (National Association of Educational Broadcasters)
Format: 1/4 inch audio tape
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- Chicago: “Business review; Nixon's approach to inflation,” 1969-04-07, University of Maryland, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC, accessed July 3, 2022, http://americanarchive.org/catalog/cpb-aacip-500-qz22h477.
- MLA: “Business review; Nixon's approach to inflation.” 1969-04-07. University of Maryland, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Web. July 3, 2022. <http://americanarchive.org/catalog/cpb-aacip-500-qz22h477>.
- APA: Business review; Nixon's approach to inflation. Boston, MA: University of Maryland, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Retrieved from http://americanarchive.org/catalog/cpb-aacip-500-qz22h477