The President's Powers
The American economy is in an exuberantly healthy state foe coping with the tremendous demands which are about to be Made upon it by the rearmament programme. But an expenditure of ten billion dollars is certain to create stresses and strains in the most robust organism, and there is considerable debate in America as to the extent of the dislocation that must be expected and as to the best means of overcoming it. The preliminary steps taken by the President—priority allocation of scarce materials, curbs on credit (particularly for housing) and additional taxation—have not been seriously challenged. But there is growing support for the school of thought represented by Mr. Bernard Baruch, which believes that the time has already arrived for a. really comprehensive scheme of economic controls, including the control of prices and wages and a much higher rate of taxation than is at present, as far as is known, contemplated. There is a natural reluctance in the United States to revert to the stringencies of war-time controls, but the alternatives are not obvious, and seem to carry with them the inevitable consequence of inflation. In the early stages after the invasion of Korea, as in the early stages after Pearl Harbour, there was a tendency to rely on the comforting belief that inflation could be overcome by exhorta- tion—against hoarding, profiteering, strikes and wage claims and so forth. The fallacy of this belief has already been proved. At the moment the President's hesitation to take on further powers is as much political as economic, since he knows that they will only lay him open to an intensified barrage a Republican criticism. But sooner or later he will be obliged to assume them.
