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THE MICHIG

DAILY MAGAZINE

Sunday, Marci30, 1958

Sunday, March 30, 1958

THE MICHIGAN DAILY MAGAZINE


THE

RECESSION

Continent-Bound Ameri

The Present Economic Picture Adds Up,
To Iad News for Business

Travel Books Offer Advice

$y SUSAN HOLTZER
Daily Staff writer
S TETIESCOPE poised, nurse .In
attendance and the patient
blinking fearfully from his pil-
low, "Dr." Dwight D. Eisenhower
has for the past month been
checking the heartbeat -and pulse
rate of the American economy in
political cartoons all over the
country.
Unfortunately, although the
disease was easily diagnosed as
"recession," there has been radi-
cal disagreement among the staff
over the necessary treatment. In
fact, no one as yet has even been
able to isolate the virus. And in
this particular case, complications
have set in which make the usual
prescriptions hazardous to offer.
Out of the cloud of words sur-
rounding the situation, however,
one fact emerges clearly: Almost
everyone has finally agreed re-
sponsibility for halting the down-
ward spin rests with the federal
government. But that very nearly
is where agreement ends.

BASICALLY, the recession is de-
lineated in a maze of graphs
and statistics that all add up to
one thing - bad news for busi-
ness.
The nation's Gross National
Product - the total value of all,
goods and services produced -
suffered a 1.5 per cent decline in
the last quarter of 1957, from the
rest of the -year's rate. Railroad
freight loadings - indicating the
volume of goods shipped - are far
down. Department store sales
have also fallen off. And unem-
ployment has risen as production
has slowed and layoffs continue.
GNP and freight loadings, ac-
tually, are simply financial bar-
ometers which indicate the cur-
rent economic' situation. Unem-
ployment and department store
sales, on the other hand, can rep-
resent both cause and effect of a
spiralling recession that, un-
checked, could easily balloon into
a full-scale depression.
INIS IS what makes economists
wary of even a slight "read-

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justment" -- the possibility of
"creeping recession."
As consumer demand falls off,
the tendency is toward production
cutbacks and large-scale layoffs.
The resultant decline in overall
consumer income eats into the
total purchasing power, which in
turn decreases consumer demand
still more.
And so on. Like the chicken and
the egg, one can never be sure
just which comes first.
Added to this is the factor of
consumer sentiment, which in this
case refused to yield to President
Eisenhower's attempted reassur-
ances, and is apparently still in-
tractable,
rpVE University's Foundation for
Research on Human Behavior
recently published a survey on
consumer and business sentiment,
and concluded within that area
at least, the recession was likely
to continue. They blamed "un-
favorable economic news com-
bined 'with dissatisfaction about
high prices."
And that, indeed, is perhaps the
most peculiar element of the cur-
rent recession - while production
decreases and consumer demand
slumps, prices, instead of taking
the expected downward turn,have
actually risen.

ON THE WHOLE, there seem to
be two principle reasons for
this curious situation. First, due
to highly militant labor organiza-
tions, wages no longer fluctuate
in accordance with demand. Not
only do unions fight against sal-
ary reductions, but in most cases
they will not even forego what
has become their usual yearly in-
crease. Thus, with fixed salaries
providing a fairly solid "floor" on
production costs, little fluctuation
in prices is possible.
Second, in many industries one
dominant corporation is in a po-
sition to "administer" prices as it
wishes. And many corporations
take advantage of this to hold or
even increase their prices during
a recession.
But although the causes of this
phenomenon can be traced; its
possible results are a matter for
conjecture.
THE MAIN problem lies in de-
termining what weapons to use
against the recession itself. The
gtandard anti-recession measures,
predicated on. the theory that
prices need to be brought up, at-
tempt to get more money into cir-
culation and' thus increase- pur-
chasing power. If used now, the
end result might well be a serious
inflation in the very midst of the
recession.

Once again, the consensus of
opinion among economists as to a
solution for the problem is split;
there is, convincing evidence, on
both sides. It is not surprising,
therefore, to find each side pro-
posing various panaceas of their
own.
Several administration mea-
sures, of course, have either been.
put into effect, or are being
planned. Among tlese are an ex-
pected $5'/2 billion increase in de-
fense spending for the first half of
1958, and a greatly expanded
highway construction program.
The administration is also plan-
ning to spend two billion dollars
on public works programs for the
1958-59 fiscal year.
OF THESE, the public works
projects have been given the
most enthusiastic reception. The
Senate passed a'near-unanimous
(93-1) resolution asking President
Eisenhower for a speed-up of civ-
il public works projects.
The House Armed Services
Committee passed a similar reso-
lution in reference to military
public works,.and AFL-CIO Presi-
dent Walter Reuther asked for an
even broader program to relieve
the unemployment problem.
Another anti-recession measure
- expansion of unemployment
compensation -- was introduced
in the House, and Speaker Sam
Rayburn, Texas Democrat, said he
expects passage of the bill "be-
fore Easter."
STILL OTHER ideas have either
been suggested or passed. Sen.
William F. Knowland of California
urged turning government spend-
ing from foreign markets back to
the United States; Reuther pro-
posed a 90-day moratorium on
collection of withholding tax "in
the event other efforts fail" and
the Senate, March 12, passed its
first full-fledged anti-recesison
measure - a $1.8 billion emergen-
cy housing bill.
But nearly all of these are
merely sideshows compared to the
often spectacular center ring bat-
tle going on over the possibility
of a tax reduction.
On one side stand arrayed the
administration and a large por-
tion of Congress, urging a cau-
tious, wait-and-see policy. On the
other side-very nearly alone--
stands Democratic Sen. Paul
Douglas of Illinois, who feels
"the time to act has arrived."
SEN. DOUGLAS has been fight-
ing a one-man battle since the
Congressional Joint Economic
Committee issued its' majority re-
port stating that tax cuts were
not yet justified.
The administration member who
came closest to looking favorably
on a tax cut was. Vice-president
Richard M. Nixon, who was willing
to give the economy "a few weeks"
before deciding. A statement by
President Eisenhower must have
been even more discouraging to
the Illinois Senator.
"Whatever decision . regarding
taxes is made," the statement
read, "will be reached only when
the impact of current develop-
meits on the future course of the
economy has been clarified and
after consultation with Congres-
sional leaders."
And there the issue stands..
U-

By DONALD A.YATES
HIS SUMMER - millions of'
Americanswill be on the go. A
good part of these vacationers and
tourists will be going in the direc-
tion of Europe. Travel agents and
the United States Department of
State, which issues passports to
citizens for foreign travel, are pre-
pared to handle a record number
of continent-bound Americans. A
percentage of these tourists, a per-
centage fortunately on ° the in-
crease, will be students.
This large group of adventuring
young people is a good sign. For-
eign travel provides an experience
which the average perceptive per-
son will count, with good reason,
among the most enlightening to be
discovered during his lifetime. Ev-
ery man, at least once in his life,
should penetrate beyond the limi-
tations of his national domain and
sample the air of a different cul-
tural climate.
Unfortunately, the typical Amer-
ican is the least qualified of in-
dividuals to derive the most from
foreign travel. He is, characterist-
ically, the product of a vast, cen-
tralized culture with scarcely more
chance of knowing what's over the
horizon than a fish complacently
circulating inside a fishbowl. He
is, almost by definition, poorly
schooled in languages other than
his native tongue.
For such reasons, travel into a
foreign land where a surprisingly
large number of people do not un-
derstand English, takes on for the
American proportions of a chal-
lenging adventure in pioneering
in the Old World. The experience
of foreign travel, therefore, looses
some of the necessary perspective.
The deficiency in languages is
one that cannot be overcome dur-
ing a week of conscientious effort.
It is a learning experience that
must start long before one receives
the standard series of shots in the
arm, many months before one is
faced with the 'practical problem
of what is to be said to the desk
clerk at the little inexpensive Pari-
sian hotel. The savoir faire in
technical matters, however, is
something that one may stand in
ignorance of on Friday, and on'
Sunday possess to a considerable
degree. This remarkable transfer
of knowledge is effected, of course,
through books.
AM LOOKING at three books
that should be pf inestimable
value to the tourist striking out
for the Continental 'trails. These
three are:-
1.rThe Poor Man's Guide to Eu-
rope, by David Dodge, Random
House, 308 pp., $3.50;
2. The Temple Fieldings' Travel
Guide to Europe, Sloane, 895 pp.,
$4.95; and
3. The Temple Fielding's Eeec-
tive Shopping Guide to Europe,
Sloane, 128 pp., $1.50.
These books deserve some com-
ment here.
The object of the David Dodge
compilation is, confessedly, to in-
dicate "how a European trip can
be made more enjoyable and less
expensive"-an admirable double
purpose that makes sense to an
American. A close read1ing of this
extremely helpful volume will sug-
gest to the reader the subtitle:
"Or, How to Beat the Game While
Touring Europe." The text in ques-
tion is the revised 1958 edition,
brought as nearly up to date as
possible for this season's exodus.
Dodge opene his book with a con-
sideration of the "European mon-
ey-exchange racket," an important
item to the tourist. He points out
the chief distinctions between the
"free money markets" and the "of-
ficial money markets" and thereby
.gives the reader a needed back-
gound on a subject probably quite
-Unfamiliar to him.
Many a would-be traveler with
empty pockets will find his subse-
quent resume of the "spay-after
you-go-plan" welcome' and per-
haps encouraging news. He points
out that Pan American World Air-
warv has estabihedha10% tc-dn.

American Express has gone one
up on them with a no-money-
down, three-years-to-pay program."
Dodge says, "Today, any regularly
employed person with a good cred-"
it rating can promote a trip to
Europe for himself and his fam-
ily, with transportation, hotels,
meals, sightseeing tours, shopping,
tips, cigarettes and pocket money
all financed on the time-honored
principle of pay-as-you-earn."
The Poor Man's Guide offers
gold-plated advice on every page
from a man who's learned the
ropes, and can label all the angles.
His chapter four, for example, is
entitled "Travel Agents and Oth-
er Exploitable Free Natural Re-
sources." Dodge: continues with
hints on how to economize on trav-
el costs in Europe, and how to
save by means of intelligent use
of hotel guides, and pension and
hosteling opportunities. There are
further well documented-chapters.
on eating and drinking, tipping,
customs officials and numerous
other pertinent matters. The
book's style, as one can4 imagine,
is fresh and informal. Many people

swear by The Poor Man's Guide;
to this reviewer, it looks like a
good investment.
COMPLEMENTING the Dodge
Incompendium are the two Field-
ing titles.
The Fielding Travel Guide to
Europe opens with a detailed 47-
page chapter on the fundamental
concern of "Getting Ready." It
soon begins its "Guide" section
which is arranged alphabetically
by countries, from Albania "where
neither Mr. Hoxha nor Mr. Krus-
chev are welcoming American
tourists" to Yugoslavia where "'you
will see a secenic Valhalla" but in
the better hotels will "tote your
own baggage and wait up to two
'and one-half hours to be served
fourth-rate food."
The typical Fielding treatment
of a major European tourist coun-
try is exhaustive and would ap-
pear hard to beat ,in the suit of
sheer overpowering general in-
formation and detail. In the 53-
page section on Germany, for ex-
ample, we are offered concise,



Donald A. Yates, a frequeni
contributor to The Michigan
Daily Magazine, is on the
teaching faculty of Michigan
State University.



U

Dramatic
Spring
Black

disciplined discussions of "Prin
cipal Cities," "Money and Prices,
"Customs and Immigration," "Hc
tels," "Food and Restaurants" an
"Night Clubs" along with con
siderations of "Wines," "Sports,
"Laundry" and half a dozen oth~
er topics of interest to the touris
T3HE MATCHING Fielding Guid
to Selective Shopping, a hand
pocket-sized, looseleaf item,
even more explicit and to the poir
-this time on the down-to-eart
subject of exchanging your hard
earned money for products, an
services in the European touric
havens. An idea of the thorough
ness of the Fielding investigatic
into the pitfalls and -particula
pleasures of purchase can b
gained from the two paragraph

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