Notes on the Recession
By RICHARD H. ROVERE THE recession is still something I don't know any Cuban mountain fighters, either, but I know there is a war in Cuba. Unem- ployment in the US was reported at 5,173,000 in February. This is the highest it has been in six- teen years (sixteen years ago, of course, the labour force was smaller—some 52,000,000 as against 70,000,000 today). The unemployed are 2,052,000 more numerous than a year ago this time. The morning papers report predictions by government economists that the unemployed will increase by 200,000 this month. The morning papers also re- port that approximately 400,000 workers have been laid off every week for the past two and a half months (of these a fair number find other jobs quickly and are thus not counted in the totals); that among the unemployed are 1,635,000 between the ages of eighteen and thirty-four, which means that many of the heaviest consumers of new things—houses, cars and so forth—must cut down consumption; and that when the March cost-of-living figures are released they will, freakishly, reach new heights.
• Industrial production (same source : morning
New York papers) dropped three points in February, the same number it dropped in January. The pro- duction index uses the average output in the 1947-49 period and reckons it 100. In February of this year it was 130, down from a peak of 147 in December, 1956. In August of last year, when the sharp decline began, it was 145.
A survey in a recent issue of Time shows that newspapers in many parts of the country are doing their best to pretend that nothing at all is wrong. The Atlanta Journal has banned the word 'reces- sion.' Many papers are running chins-up stories. Some sample headlines : DECLINE HERE? DON'T BELIEVE IT 1—Rosy L.A. [for Los Angeles] ECONOMY SEEN . . . BOAT SALES BELIE RECES- SION, LUXURY DOLLARS IN SHARP RISE-- BUSINESS PESSIMISTS LASHED—RECESSION? 'OUR STAND IS SOUND'—WHO SAYS UNEMPLOY- MENT? RHODE ISLAND PROMOTION JOBS STILL OPEN. Meanwhile, newspaper linage is down 6.4 per cent., the 'Job Wanted' columns grow lo!,ger and writers of columns with titles like 'You and Your Budget,' Family Finance; 'The Job Mar- ket' and 'Your Dollar' are doing very well.
* Fear is spreading and unquestionably making things worse. 1 talked a week or so ago with an intelligent young engineer who was full of fear, knew it was groundless and yet was powerless to overcome it. He has a good job; engineers con- tinue to be in short supply. His income is ample for his family's needs and for a certain amount of expansion—additions to his house, additions to his family, new equipment of one sort or another. Yet since early fall, he said, he had been banking every penny he didn't have to spend for food, clothing, heat and essential transporta- tion. He was a child in the depression of the Thirties, but it scarred him badly, and he can't bell) behaving as though a big depression were already in full swing.
• A dogma is about to be put to the test. For twenty years almost everyone has been saying that there could never be another big depression be- cause the economists had learned so much about the economy and had devised the machinery for setting things back to normal in a hurry. Social security, credit control, ' public 'works—all the heavy equipment of the Welfare State is supposed to be ready to go as soon as the word is given. We shall see, we shall see. The President has set some of it in motion already, and maybe it will work, but the problem seems to be one of timing. The fear is that if the big stuff is put in operation now it may lead us into an inflation as bad as the recession. And if it is held off too long the recession will turn into a depression.
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