Word: okun
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Dates: during 1970-1979
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...effort to build up stockpiles of parts and materials for fear of shortages ahead. He fears that inventory accumulation could be strong until the recession becomes apparent in the autumn, and then businessmen would abruptly cut back on orders, plunging the economy into a deeper slump. Says Arthur Okun, senior fellow at Brookings: "Paradoxically, we may have too much business confidence...
...Americans' disposable income, thus prolonging the recession. Otto Eckstein, chief of Data Resources Inc., the economic analysis firm, favors putting a strict limit of 7 million bbl. per day on petroleum imports, which now average about 8 million bbl. daily; mandatory limits would probably result in gasoline rationing. Okun and other board members would increase Government financing of efforts to develop alternative energy sources. A multibillion-dollar effort would not only pay off in increased fuel supplies, but also bolster the nation's bargaining clout with OPEC; the cartel would recognize that its monopoly could not last forever...
...take the position that money policy should be tightened to produce a mild slowdown. The alternative, they fear, is too fast economic growth that would lead to even worse inflation?and then a sharp recession later on. Private economists as ideologically diverse as Conservative Alan Greenspan and Liberal Arthur Okun, both members of TIME'S Board of Economists, support the case for tighter money. Says Greenspan: "A recession is unavoidable. The sooner we have it, the better off the economy will be." Adds Okun: "Despite high interest rates, there is no place in this economy where anybody is saying...
...often, alas, a deficit does both, and economists divide diametrically on which effect has predominated lately. Says Liberal Arthur Okun: "The role of the deficit in the inflation of recent years has been trivial. The only way that a deficit creates inflation is by overheating the economy, and we haven't had an overheated economy in five years." The opposing view, from Burns: "This persistence of substantial deficits in federal finances is mainly responsible for the serious inflation that got under way in our country in the mid-'60s ... and when the deficit increases at a time...
...perhaps three quarters. Eckstein calculates that corporate profits after taxes will rise only 5% next year, vs. 14% in 1978-and will go up even that modestly only because the tax rate on most corporate income will drop from 48% to 46% on Jan. 1. Arthur Okun, senior fellow at Washington's Brookings Institution, put the increase even after taxes at a round zero...