Word: wallich
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That policymakers are being even so tepidly tempted constitutes an intellectual victory for Federal Reserve Governor Henry Wallich, who has been pushing TIP through nearly eight years of debate in obscure economic journals. His basic idea, elaborated in cooperation with University of Pennsylvania Economist Sidney Weintraub, is to set a guideline for wage and benefit increases-about 5% a year in Wallich's latest version-and slap a penalty tax on any company that raised pay as much as 1% more. In his view, that would force employers to hold down wages, and prices would automatically follow...
Both are denounced by conservatives who oppose any interference in the free market. Government officials' main fear is that a monstrous bureaucracy would be needed to monitor hundreds of thousands of wage and price boosts. For that reason, the Administration favors Wallich's TIP over Okun's: watching just wages would be easier than keeping tabs on prices too. Weintraub suggests that policing could be simplified by confining TIP penalties to the 2,000 or so biggest U.S. companies...
...reports TIME Economic Correspondent George Taber, seems a strangely radical idea to come from Wallich, a Republican professor of economics whose pin-striped blue suits and slow, heavily technical speech make him seem the embodiment of fiscal traditionalism. But as a child in Berlin he lived through the insane German inflation of 1923-24. Once his mother gave him 105 billion marks to buy a ticket to a swimming pool that had cost 15 pfennig to enter not long before. But she miscalculated; by the time Wallich got to the pool, the price had risen to 150 billion marks...
...standards similar to the guidelines used in the early 1960s to restrain wages and prices. Other steps under study: two kinds of TIPS or tax-based income policies that must be passed by Congress. One was devised by Economist Arthur Okun of the Brookings Institution, the other by Henry Wallich, a member of the Federal Reserve Board. Okun's plan would give tax credits to workers and employers who hold down wages and prices. Wallich's idea is to impose tax penalties on those firms granting inflationary pay boosts or setting excessive prices. Both plans would be cumbersome...
...Economist Robert Triffin, a U.S. monetary expert who has long championed a European currency, believes that it would help rather than hurt the dollar's stability in the long run. The final form of the common European money system remains uncertain, but, said Federal Reserve Board Governor Henry Wallich, "something will emerge because there is a big push behind it, and a lot of political capital has been invested...