Miller
WASHINGTON (AP) - The chair-
man of the Federal Reserve Board
suggested yesterday that major in-
dustries establish their own price and
wage guidelines to help control an in-
flation rate that threatens to push the
economy toward a serious recession in
the near future.
Chairman G. William Miller said
business must show more restraint on
prices. Although profits may be lower
in the short-term as a result, he said,
"in the long-run there will be more real
profits, more real earnings and more
real value" from a lower inflation rate.
AND MILLER cautioned that, "If we
pursue a course that does not soon con-
tain the forces accelerating the advan-
ce of prices, the result will bein-
creasing economic disruption and
distortion, ending in all probability in
serious recession.'
Miller, testifying before the House
Banking Committee, expressed disap-
pointment in industry response to the
administration's current anti-inflation
program, which stresses a voluntary
slowing of wage and price increases.
While some businesses initially an-
nounced their support, he said there has
been "a dearth of new announcements"
The Michigan Daly-Saturday, July 29, 1978-Page 5
SAYS INDUSTRIES NEED PRICE CONTROL
warns recession coming
recently. the 0.9 per cent increase in the con- before the end of the year and likely will
sumer price index in June, announced decline next year.
THE FED chairman suggested a yesterday. Inflation probably will MILLER SAID he hasn't made a
"second phase" program that he said range between 7Y4 and 7% per cent for recommendation to Carter on hi3 in-
should concentrate on basic industries, the next 12 months, he said. flation ideas, which he said are his own.
such as steel, autos and non-ferrous He urged postponing the 1979 in- However, in the past, the ad-
metals, crease in Social Security taxes for a ministration has reacted to some of the
He said the program could include year and suspending the 1979 increase proposals Miller has made. before
labor-management councils in such in the minimum wage to help ease in- congressional committees. For exam-
basic industries that would develop flationary pressures. He also criticized pie, Carter scaled back his proposed
their own price and wage guidelines. a proposed reduction in the capital tax cut after Miller said it was too high.
The guidelines then would be submitted gains taxes as potentially inflationary Miller said the Federal Reserve
to the government where they could be because it would increase the budget Board, which influences interest rates
debated, Miller said. deficit. and economic growth through its
But he said he didn't like the idea of In his testimony, Miller said interest management of the nation's money
government-imposed guidelines rates could increase above their supply, will stick to the same money
because that could raise fears that they present high levels in months ahead, supply growth targets it had
might lead to wage and price controls, but that they should reach their peak established previously.
"SELF-IMPOSED guidelines may
be more helpful than ones that are
government-imposed," he said.
The administration's program
provides for a loose guideline for both
wages and prices that urge increases be
kept below increases of previous years,
thus gradually decelerating inflation.
Miller made clear he has in mind a
more specific numerical guideline that
may vary from industry to industry,
but applying only to key industries.
MILLER SAID he was disturbed by
Retail priees rise;
inflation holds at 10%
Regents uphold MSA
housi Legal A fee
(ContinuedfromPageOne)
Baker added that "students don't y
have to follow these conditions""
specified in the action, that once the
money was given to the lawyers they
could do as they wished.
REGENT PAUL Brown (D-
Petoskey) argued that although the fee
would effectively raise tuition nearly am
whole per cent, an April advisory MSA
election by students overwhelmingly
supported the assessment.
"If we choose to accept some (elec-
tions) and not others, we undercut the
student government," said Brown.
Thomas Roach (D-Detroit) cited
precedents in Literary College student RoSe
government, housing and health ser- Rose told the Regents that only studen-
vice as evidence of current practiced ts with incomes below $3,000 annually
University mandatory student funding were eligible for service. "We have to
for needed assistance. turn away more than twice as many as
STARTING WITH the upcoming fall we serve," Rose said of the situation
term, and continuing for at least one before the MSA funding.
full year, $1.74 of the new mandatory After the meeting, however, Rose
fee will support each term the activities said, "We anticipate being able to serve
of five lawyers, a coordinator, a the entire student body," and also in-
paralegal assistant and a secretary, all dicated that service could remain free.
working out of the Union to provide free But Rose said it is impossible to deter-
legal help to all students. mine what effect increased demand
The Ann Arbor Tenant's Union will will have on a $132,694 budget until the
take six cents out of the MSA fund for fall.
its work in the area of consumer protec- Rose said the staff will include him-
tion and the dissemination of infor- self; Campus Legal Aid attorney Paul
mation on tenants' rights. Teich - who also appeared before the
During discussion on Thursday, Regents - and Barbar Kessler, a
current Campus Legal Aid attorney recent addition to the Legal Aid group.
"You're a Good Man, Charlie Brown"
based on "Peanuts" by Charles M. Schulz
presented by
Ann Arbor Civic Theatre
July 26-29 Lydia Mendelssohn Theatre
Tickets: CURTAIN 8 Pm
$4.00OWeds. &Thurs. $4.50 Fri. &Sot.
Children 16 and under who are accompanied by an adult are $1.00 off the
regular price Weds., July 26
DowOfftce (iiithe theatre lobby) will be open Mon. July 24 through
Tues., July 25 Sat., July 29
10 om-6 pm 12-pm-showtime
WASHINGTON (AP) - Food,
housing and car prices jumped sharply
again in June, shrinking American
workers' buying power and holding in-
flation above a 10 per cent rate for the
year.
In twin blows to consumers, the
Labor Department said yesterday that
retail prices during June rose 0.9 per
cent for the third straight month, while
workers' buying power dropped 0.4 per
cent, the second decline ina row.
THAT MEANT that despite pay in-
creases averaging 0.5 per cent in June,
the average wage earner was unable to
keep pace with inflation, which the
government said would be 10.4 per cent
this year based on price rises during the
first half.
Food prices would leap nearly 18 per
cent this year based on their perfor-
mance during the first six months,
while housing would rise 11 per cent.
Government economists
acknowledged that the latest consumer
price report dampened the Carter ad-
ministration's hopes of limiting in-
flation this year to about -seven per
cent.
"WE ALL CAN see improvements
coming in food prices during the second
half of the year," said Commerce
Department economist William Cox.
"But what's happening in the non-food
sector is becoming much more
problematical."
At the White House, spokesman Rex
Granum said the increase in consumer
prices was "extremely disappointing,"
but noted the likely moderation of food
prices during the last half of the year.
The administration has raised its in-
flation and food price hike forecasts
several times this year following large
jumps reported in the monthly con-
sumer index.
AT THE START of the year, the ad-
ministration predicted that inflation
would be just over six per cent, while
the Agriculture Department forecast
food price rises of between four per cent
and six per cent. Now the government
forecasts inflation at 7.2 per cent and
food prices at about 10 per cent for the
year.
FOOD PRICES, which have paced all
other increases for six straight months,
jumped 1.3 per cent in June due to
sharply higher prices for beef, poultry,
dairy products, cereal and bakery
goods, fats, oils, sugar and sweets.
Beef prices alone have gone up nearly
31 per cent since last October, the
Labor Department said.
Prices declined in June for fresh
vegetables, pork, eggs and coffee.
THE ADMINISTRATION is predic-
ting that a dramatic slowdown in food
price increases during the second half
of the year will pull down the inflation
rate.
In evidence of that, administration
economists noted that the 1.3 per cent
rise in food prices during June was less
than the 1.5 per cent increase in May
and the 1.8 per cent hike in April.
Government economists are now less
certain, however, that price increases
in other areas will moderate.
The Ann Arbor Film Cooperative
presents at MLB 3 SATURDAY, JULY 29
THE GODFATHERPart I
(Francis Ford Coppola, 1975) 6:30 & 9:30-MLB3
Continuing the saga of the Corleones, this sweeping epic moves both
backward and forward in time, interweaving Vito's rise to power with
the story of what son Michael did with that power. As usual, DeNiro is
brilliant, the casting is amazing, but top kudos must go to Coppola for
fashioning a film of this size into a personal statement. "May be the
most passionately felt epic ever made in this country! The daring of PART
II is that it enlarges the scope and deepens the meaning of the first film.
Visually the film is for more complexly beautiful, thematically richer,
more shadowed, more full than the first. The sensibility at work in this
film is that of a major artist."-Pauline Kael. AL PACINO, ROBERT
DE NIRO, ROBERT DUVALL, DIANE KEATON, LEE STRASBERG.
Tuesday: JOHNNY GUITAR & RUN HOME SLOW (Free)