Inflation and Job Security

September 20, 1974

Report Outline
Threat of Climbing Unemployment
Efforts to Cope with Joblessness
Approaches to Labor Utilization
Special Focus

Threat of Climbing Unemployment

Interaction Between Inflation and Unemployment

A SPECTER FROM the Depression Thirties—mass unemployment—will be lurking in the shadows of the “economic summit,” the gathering of some 600 experts and other representatives of various phases of American life whom President Ford has summoned to help him solve the most serious domestic problem of his newborn administration. The main topic of the summit, to be held in Washington, Sept. 27–28, will be inflation—what Ford, at his Aug. 28 press conference, called “Public Enemy No. 1.” But for many Americans the threat of a shrinking job market presents an even more fearsome prospect than rising prices.

The task before the summit is formidable. For the Ford administration must devise a policy and a set of actions that will leash back a runaway inflation without at the same time pushing an expected recession into a job-destroying slide. A number of familiar anti-inflationary devices will be considered, most of them looking to a slowing down of economic growth that inevitably results in a shrinkage of jobs. President Ford favors conservative approaches similar to those taken by previous Republican administrations: balancing of the budget to be achieved by cutting government spending, a tight money policy, and hold-downs of wages and prices, hopefully by voluntary means. But he seems willing to listen to other voices. A pre-summit meeting of 28 economists, over which he presided on Sept. 5, included participants of liberal views who had served as advisers to Democratic administrations.

Federal Reserve Board Chairman Arthur F. Burns is among those who believe budget restraint is the main key to the inflation-recession puzzle. Shortly before he resigned Aug. 9, President Nixon had promised to cut the federal budget from $305 billion to $300 billion. Soon after he became President, Ford promised to spend even less than $300 billion. Burns has since suggested that the budget could be cut back to $295 billion. If this were done, he said, “the stock market…[and] the bond market would revive promptly, short-term interest rates would move down promptly…and forces would be released in the private sector to create more jobs. “ President Ford apparently agrees. “If we take care of inflation…I think most of our other domestic…problems will be solved,” Ford said at the Aug. 28 news conference. “We won't have high unemployment. We'll have ample job opportunities.”

ISSUE TRACKER for Related Reports
U.S. Dollar and Inflation
Jul. 19, 2019  The Future of Cash
Oct. 2008  The Troubled Dollar
Feb. 13, 1998  Deflation Fears
Mar. 13, 1987  Dollar Diplomacy
Oct. 14, 1983  Strong Dollar's Return
Jul. 11, 1980  Coping with Inflation
May 16, 1980  Measuring Inflation
Dec. 07, 1979  Federal Reserve's Inflation Fight
Jun. 09, 1978  Dollar Problems Abroad
Sep. 20, 1974  Inflation and Job Security
Feb. 26, 1969  Money Supply in Inflation
Feb. 14, 1968  Gold Policies and Production
Dec. 15, 1965  Anti-Inflation Policies in America and Britain
Mar. 15, 1965  World Monetary Reform
Dec. 02, 1964  Silver and the Coin Shortage
Oct. 17, 1962  Gold Stock and the Balance of Payments
Dec. 15, 1960  Gold and the Dollar
Oct. 10, 1956  Old-Age Annuities in Time of Inflation
Jan. 17, 1951  Credit Control in Inflation
Aug. 10, 1949  Dollar Shortage
Oct. 04, 1943  Stabilization of Exchanges
Jan. 21, 1941  Safeguards Against Monetary Inflation
Mar. 25, 1940  United States Gold in International Relations
Dec. 14, 1937  Four Years of the Silver Program
Oct. 04, 1934  Inflation in Europe and the United States
Jan. 30, 1934  Dollar Depreciation and Devaluation
Sep. 05, 1933  Stabilization of the Dollar
May 29, 1933  Invalidation of the Gold Clause
Mar. 15, 1933  Inflation of the Currency
Oct. 25, 1924  Bank Rate and Credit Control Federal Reserve Policies and the Defaltion Issue
Unemployment and Employment Programs