THE 1969 ECONOMIC REPORT HEARINGS BEFORE THE JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES NINETY-FIRST CONGRESS FIRST SESSION PART 3 FEBRUARY 25, 26, 27, AND MARCH 5 AND 6, 1969 Printed for the use of the Joint Economic Committee 24-833 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1969 For sale by the Superintendent of Documents, U.S. Government Printing Office STANFORD LAW LIBRARY CONTENTS Bach, George L., professor of economics and public policy, Stanford Uni- Bronfenbrenner, Martin, professor of economics, Graduate School of Industrial Administration, Carnegie-Mellon University, Pittsburgh, Pa Culbertson, John M., professor of economics, University of Wisconsin... Turner. Robert C.. professor of business economics, Indiana University......- Martin, Hon. William McChesney, Jr., chairman, Board of Governors of the Federal Reserve System, accompanied by Daniel H. Brill, Senior Adviser to the Board, and Robert Solomon, Adviser to the Board----- Stans, Hon. Maurice H., Secretary of Commerce, accompanied by William H. Chartener, Assistant Secretary for Economic Affairs._ Volcker. Hon. Paul A., Under Secretary of the Treasury for Monetary Meany, George, president, American Federation of Labor and Congress of Industrial Organizations, accompanied by Nathaniel Goldfinger director of research, and Andrew J. Biemiller, director, Department of Legisla- "A Percentage Budget for Public Appropriations," by Martin Bronfenbrenner, reprinted from Graduate School of Industrial Administration Reprint No. 240, Carnegie Institute of Technology-- Comments on increasing the flow of foreign visitors to the United Commentary on views of Professor Machlup on the U.S. payments balance (requested by Representative Reuss). Comments on broader trade negotiating authority for the President Answers to questions sent to Department by Senator Javits- 746 748 748 Hagedorn, Dr. George G.: Prepared statement.. Javits, Hon. Jacob K.: "Viewpoint: Nixon Urged To Pursue Strong Liberal Trade Policy," Digest of S. 2907 (Senator Javits' bill) excerpted from Congres- Staff projection of economic and financial developments in 1969. Comments responding to Chairman Patman relative to assisting housing market by purchasing agency obligations__ Patman, Hon. Wright: Tables: I. Yields on long-term Government bonds, 1939 to present... Summary of membership dues and contributions paid to banking Materials consisting of excerpts and comments in support of Proxmire, Hon. William: "Capital Spending Rise Predicted: Car Sales Up in Mid-February- Page 919 718 745 748 653 691 696 689 689 690 691 697 616 616 "The Economy: Where Are We?" (excerpt), by Tilford Gaines, Man- 617 619 "The New Year Forecast," article reprinted from Newsweek, January 13, 1969_... 625 Press release from American Statistical Association, and the National Remarks by William H. Chartener, Assistant Secretary of Commerce Roth, Hon. William M.: Future U.S. Foreign Trade Policy: Report to the President______ Response of Department (requested by Representative Reuss) to 627 632 634 637 639 644 759 742 THE 1969 ECONOMIC REPORT OF THE PRESIDENT TUESDAY, FEBRUARY 25, 1969 CONGRESS OF THE UNITED STATES, The Joint Economic Committee met, pursuant to recess, at 10 a.m., in room 1202, New Senate Office Building, Hon. William Proxmire (vice chairman of the joint committee) presiding. Present: Senators Proxmire and Miller; and Representatives Bolling, Reuss, Griffiths, and Conable. Also present: John R. Stark, executive director, and Douglas C. Frechtling, minority economist. Senator PROXMIRE. The committee will come to order. The Joint Economic Committee today continues its hearings on the state of the economy and the administration's economic situation and outlook. On our panel today we are privileged to have four outstanding professors who are experts on fiscal and monetary policy, and who will advise the committee on the proper mix of these two instruments in this year's policy package. Gentlemen, we are delighted to welcome you and are grateful to have your advice. I believe that other members of the committee will be here shortly. Mr. Conable, I see has already arrived. Our panel today consists of Prof. George L. Bach of Stanford University; Prof. Martin Bronfenbrenner, Carnegie-Mellon University; Prof. John M. Culbertson of the University of Wisconsin; and Prof. Robert C. Turner of Indiana University. We hope that each of your can summarize your individual views in 10 minutes, more or less. If it takes a little longer, that is all right. You have short statements and in some cases I presume your whole statement would only take about 10 or 12 minutes. We will include in the record any exhibits that you consider appropriate. After you have presented your views, the committee will interrogate the panel under the 10-minute rule. Professor Bach, we will start with you. You may continue in your own way. STATEMENT OF GEORGE L. BACH, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, STANFORD UNIVERSITY Mr. BACH. Mr. Chairman, my assignment is to comment on the optimal mix of monetary and fiscal policy. I should like to do so by making seven brief points. |