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There was some cooperative action on that front. Under a Labor Department contract, a Westinghouse Electric unit is teaching Negro history to job candidates in Baltimore. Control Data Corp. plans to open a 275-job computer-component plant in a Negro neighborhood of Minneapolis, where rioting forced a call-up of National Guard troops last summer. Near by, the company will start a training institute to teach computer skills. Still, much remains to be done. "The latent manpower wasting away in the slums is urgently needed," says President Stephen F. Keating of Honeywell, Inc. "The supply of capable people may be the limiting factor in our industrial growth rate."
In nervous 1967, stock speculation soared. Both the New York and American stock exchanges reported new records in volume, and venturesome investors in such high-flying issues as computers, electronics and office equipment made millions of dollars of paper profits.
No Fine-Tuning
All in all, the year proved that even with the application of Keynesian New Economics, the Government really cannot fine-tune the U.S. economy. In theory, changes in spending, taxing, or the supply of credit can assure permanent, noninflationary prosperity. The trouble lies not in the theory but in its execution. The New Economics performed wonders from 1961 to 1965, when the economy needed stimulus. Then, after the soaring cost of the Viet Nam war shattered price stability in 1966, President Johnson for too long rejected economists' advice that it was time to raise taxes. When he belatedly asked Congress for a 6% income tax surcharge in January, the gathering clouds over business made the idea look so dubious that the tax-writing House Ways and Means Committee simply pigeonholed the President's proposal.
Part of the problem arose from the inability of Administration analysts to foresee business developments with pinpoint accuracy. The low visibility is caused in great part by shaky statistics, which leave economists somewhat in the position of a doctor performing delicate surgery with a hacksaw and a chisel. Many vital figures—inventories, housing starts, business investment plans—are either unreliable or too crude to foreshadow subtle economic shifts which call for sophisticated changes in Washington policies. For example, a misjudgment of how fast personal income and corporate profits would grow led the Treasury to a $7 billion overestimate in January of revenues for the fiscal year that began last July. Treasury Secretary Henry Fowler—who at one point warned that "spiraling inflation" could well leave the U.S. economy "in a shambles"—has conceded that had he realized how far wrong the estimate was, he would have taken an "entirely different view" of fiscal policy needs.
Debatable Vision