Showing papers in "Challenge in 1977"

The Financial Instability Hypothesis: An Interpretation of Keynes and an Alternative to“Standard” Theory

Abstract: (1977). The Financial Instability Hypothesis: An Interpretation of Keynes and an Alternative to“Standard” Theory. Challenge: Vol. 20, No. 1, pp. 20-27.

Work and the Welfare State

Abstract: eral Reserve Board was referring to. A closer examination of the statistics would reveal, I believe, that the problem is not as grave as he might have indicated. If I remember correctly, he mentioned something like 5 million absentees or a rate of about 5 percent. There may have been some increase in absenteeism, but I think Chairman Burns should have taken into consideration the changes that have occurred in our society and the labor market. Almost one-half of all American families now have two earn-

The Implications of Zero Economic Growth

Abstract: The consequences of a zero economic growth (ZEG) policy are examined to see what limits to growth, some of which already exist, are desirable and what changes in our institutions are required to impose a no-growth policy. Past periods of zero or negative growth have increased unemployment, raised employability standards, and increased income-distribution inequalities with a subsequent lowering of the living standard. Zero population growth would offset this somewhat by freeing the capital now spent on education and career training and using it to raise per capita living standards if a work-sharing and unemployment-payment system were devised. Undesirable social implications would be felt both if a lack of employment opportunities reduced competition and consumption habits or if it led to intensive competition. Advocates of ZEG propose to restrain only those areas using nonrenewable resources and causing pollution of the environment, while expanding the service areas. The service sector (e.g., transportation and utilities) is also polluting and uses nonrenewable resources, however, pointing up their failure to account for indirect consumption. Many undeveloped countries already have ZEG but would not be content for the U.S. to halt growth opportunities. ZEG would be difficult to enforce and would do nothing to promote pollutionmore » control. (DCK)« less

A Continuing Audit of Government Economic Statistics

Abstract: (1977). A Continuing Audit of Government Economic Statistics. Challenge: Vol. 20, No. 4, pp. 29-33.

The US. Aircraft Industry: A Case for Sectoral Planning

Abstract: The aircraft industry in the United States is now operating at about 55 percent of its one-shift production capability. This high level of idle physical capacity, combined with the even larger burden of laborrelated overhead structure (engineering teams, marketing organizations, etc.), is costing about $1.0 billion per year in inefficiency. The Defense Department's share of this cost is over $400 million per year. Better economic and market planning in the military aircraft sector alone could result in annual savings of at least $250 million to the Defense Department within just a few years. Over-capacity and other significant problems in the aircraft industry seem to be directly related to the unique market conditions of the postVietnam period. Of prime importance is the fact that the aircraft procurement budget of the Department of Defense dropped, in constant 1977 dollars, from $17 billion in 1968 to $7 billion in 1975. Coincidentally, the major procurements of commercial aircraft in the United States also shrank within this same period, and are expected to contract still further until major replacement buys occur in the mid-1980s. There has also been a dramatic shift in the sale of U.S. military aircraft to foreign nations during the past seven years. In 1968, this amounted to approximately 10 percent of U.S. military aircraft procurements; by 1976 foreign sales of military aircraft were up to approximately 60 percent. These foreign sales have provided a short-term "stop-gap," but the pattern is now changing in the direction of "co-production" or "host-country production" agreements with other countries. Certainly, future foreign sales are far less assured than domestic procurements. Since the mid-1950s, there has been a significant shift in the number of military aircraft being bought.

The Dilemmas of Soviet Oil Policy

Abstract: The Soviet Union has not had to spend hard currency on oil imports as other industrialized countries have since the 1973 oil embargo. It is well endowed with petroleum and, since 1973, has become the largest producer of petroleum and the third largest exporter. Soviet officials realize that their enormous supply is finite, so decisions must be made on whether to continue producing at the massive rate or curtail production; saving some for future generations. Also, choices must be made on how much to export and how much to consume at home; how much should be set aside for Eastern Europe, which pays in soft currency; or how much should be diverted to its hard-currency customers. The Soviet resolution of these issues will have important policy implications for the U.S. and her hard-currency allies, OPEC, and Eastern Europe. (MCW)

Jobs and Services: Toward a Labor-Intensive Economy

Abstract: Unemployment and what to do about it was a major issue in the last Presidential campaign, and even now, Congress and the White House are debating how much tax relief and how many public sendee jobs should be legislated this year. Even so, joblessness is still being seen as a temporary problem that will disappear once the economy is restored to full health. I would argue, however, that it is a permanent problem that will not go away, at least not until the economy is moved in a labor-intensive direction.

The Northern Tier and the Sunbelt: Conflict or Cooperation?

Abstract: There are risks to the nation and to each of its constituent regions if the controversy over comparative levels of economic welfare and the geographical pattern of Federal fiscal activities continues. Considering economic growth in this ''zero sum'' framework encourages the formulation of regional policies that may intensify interregional competition. In turn, this sense of competition could result in ''beggar-thy-neighbor'' policies that inevitably elicit retaliatory responses from other regions and states. It should be self-evident that the regional economies of the United States are inseparable. All provide goods and services to one another: one region's level of aggregate demand in part determines another region's level of production and, thus, employment and income. The economic prosperity of all regions suffers if the economic decline of one is permitted to continue or if the economic growth of another contracts. Because of the interdependence among regional economies, groupings such as the Coalition of Northern Governors and the Southern Growth Policies Board could constitute a natural alliance. But if the debate continues in a competitive, rather than in a cooperative, spirit, there is a risk that these regional coalitions will be forced into adversary positions. The current situation creates a unique opportunity for amore » creative ''federalism'' of extensive cooperation not only between the Federal government and the states, but also among the states and regions themselves. This opportunity, in turn, generates new demands on the political leaders of the states, requiring the exercise of a new regional economic statesmanship.« less