Word: discounters
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Dates: during 1960-1969
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...inflationary trend was really recognized by the Federal Reserve Board's decision-against the President's wishes -to hike the discount rate (see following story). However distasteful it may be to him, the President may have no alternative but to raise taxes next year in order to finance the costly welfare programs and an ever-increasing war effort without overheating the economy...
Only the day before, President John son had publicly expressed his "regret" over the board's 4-to-3 decision to raise the discount rate in order to counter in flationary trends (TIME, Dec. 10). As sembling his quadriad of top economic advisers - Treasury Secretary Fowler, Council of Economic Advisers Chair man Gardner Ackley, Budget Director Charles Schultze, and Martin himself-in Texas, Johnson discussed the state of the economy with them for two hours...
...President. Indeed, by accepting the fait accompli gracefully, Johnson retained the goodwill of the banking community and fiscally conservative businessmen (see U.S. BUSINESS). Moreover, if the board's tighter money policy causes the economy to dip too sharply, Johnson can rightfully argue that he opposed the discount boost all along. On the other hand, if the 58-month-long economic boom continues unabated, as most economists expect it to, Johnson-not the board-will get the credit...
...expansion in U.S. peacetime history. After an emotional dip at week's start, the stock market expressed its confidence in continued prosperity by rallying to close the week with a 6.6 point gain (to 952.72) in the Dow-Jones industrial average. Most businessmen seemed to approve of the discount-rate rise, even though it means a higher cost for their loans. It was, said Ford President Arjay Miller, "the right move at the right time...
With that, Washington has hoped to avoid reaching for stronger anti-inflation weapons, such as raising the discount rate or increasing taxes. The plan may work. But if the new approach to inflation does not do the job in the next few months and the economy continues to heat up, Lyndon Johnson's advisers may be forced to resort to more classical means...