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Jack Ranger

Tapping the Wall St. Wire

Sales and Employment Slipping

(20 December 1948)

From Labor Action, Vol. 12 No. 51, 20 December 1948, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

As the year nears its close, two recent developments in the nation’s economy deserve attention. The first is the slight falling off in department-store sales; the second is the growing number of layoffs in various Eastern industries. Neither has developed to the point where It may be considered a serious threat to the economy. Both are early symptoms of the chronic disease of too-high prices and too-low wages which have marked the post-war economy but which have been held in check by the unprecedented peacetime scale of spending for the military and for foreign aid.

For the week ending December 4, department-store sales in the Chicago district were 4 per cent under 1947 figures for the same period. It was the sixth consecutive week of decline. Similar sales for the same week were off 4 per cent in Detroit, in Milwaukee 1 per cent, in Indianapolis up 1 per cent, and in other cities of the Midwest off 4 per cent.

The regional pattern was exactly reflecting department-store sales throughout the United States, which were also off 4 per cent from a year before. All the Federal Reserve districts reported declines for the first week in December, ranging from 2 per cent for Boston to 6 per cent for New York and 8 per cent for San Francisco.

Several economists have voiced the belief that the drop in sales is largely the result of a widely-held belief that President Truman and the 81st Congress will “do something” about high prices – that is, that the people still have money in their pockets but are just holding off to see if prices will be lowered early next year by governmental action.

Such an interpretation is improbable, for two reasons:

  1. If people do have money to spend, as a rule they will spend it in the holiday season to try to make their family’s Christmas a happy one, or to provide at least winter wardrobes for their families;
  2. Who but a few god-forsaken Democratic labor bellwethers can really believe that Truman will or can do anything to lower prices?

The president’s proposed military budget, his. commitments to Europe and to China, his promises to the farmers, the cheap-money course dictated by the tremendous burden of war debt, preclude any hope that prices will fall because of anything that the administration consciously does.

Layoffs Grow

A roundup of statistics reflecting recent layoffs reveals the following:

Turning Point Ahead?

Businessmen in Stamford and Greenwich, Conn., have called a meeting to “fight unemployment” in that industrial area. They say employment is down 8.7 per cent there from last year, with 1,739 persons from the two towns mow unemployed and looking for work.

A month or so must pass before it will be clear whether these scattered layoffs mark a turning point in the economy. Similar situations have developed several times since 1945, and each time the artificial injection of war orders or foreign- relief orders has enabled the economy to recover temporarily.

These achievements, have led many observers to the belief that the national administration can continue indefinitely to buoy up the economy with similar devices. Such a deduction is false because the United States does not possess inexhaustible wealth.

A year-end economic survey which I am preparing will show how far along the road to exhaustion the economy has come since a similar survey published in Labor Action last January.

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