Word: reierson
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Dates: during 1950-1959
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Last week, in a calm, sober study, Roy L. Reierson, vice president and chief economist of Manhattan's Bankers Trust Co., concluded that the bearish worries had far outrun the possibilities. "There is some feeling that the American economy may, within the next few years, be engulfed by a speculative, inflationary burst involving a flight out of dollars and money assets and into tangible property, gold or equities. The odds do not seem to favor such a prospect at this time...
...shortage as working-age population rises. What the bank expects is a relatively stable growth pattern over the next five years, with prices rising a modest 1% or 2% each year. Any further acceleration in prices could be crimped politically by Government controls or higher taxes. "Thus," concludes Economist Reierson, "unless the U.S. adopts fiscal irresponsibility as a way of life or, of course, we become involved in another war, an inflationary binge appears unlikely...
...Federal Reserve Board last week demonstrated the kind of fiscal responsibility that Economist Reierson was talking about. Deciding that it was time once again to lean gently against the economic winds. FRB gave the San Francisco Reserve Bank permission to hike its discount rate from 1¾% to 2%, the first such credit-tightening boost in eight months. The other eleven Federal Reserve banks will probably follow suit soon, thus signaling that 1) the Fed agrees that the recession is over, and 2) it is on guard to make certain that the recovery proceeds in a sound, orderly fashion...
Speaking before the National Association of Mutual Savings Banks in Boston last week, Reierson noted that "many maladjustments have entered the economy in recent years, and their correction may be neither painless nor swift." Troublesome problems are the continuing rise in wage rates in the face of unemployment, and the rigid price structure that keeps prices high in the face of surpluses...
Economist Reierson dismissed the idea that the economy will slip into deep depression. But neither did he see any return to the boom for several years. Industry has too much overcapacity for another big investment surge and consumers are so deeply in debt that their buying power will be curtailed for some time. Concluded Reierson: "Admittedly, this appraisal runs counter to much of the economic thinking of our times, which takes for granted a quick return to long-term growth. Yet there is a real possibility that it may well take until the 1960s before the economy regains sufficient thrust...