Patl'X

The Herald and The Lantern

Wednesday, April 2,1980

!

TOO ti.OSE. Only about onr vehicle's Irngth arparal^i thrsf two Lower C'apr May Regional school buses traveling south just 55 mph when this picture was taken last Wednesday afternoon on the parkway north of the Rio Orande exit. Had the lead bus jammed on its brakes for an emergency, what would have happened?

The whole art of teaching is only the art of awahening the natural curiosity o/youitH minds for the purpose of satisfying it afterwards. -Anatole France

The Legendary Miss Porter

There is much dissension nowadays among school board members, teachers and the community. But, last Wednesday night at the Cape May City Elementary School all were united in paying a well deserved tribute to Helen Louise Porter, the legendary pianist and teacher who has introduced thousands of area youngsters to Bach, Beethoven and Brahms. Since 1912 Miss Porter has beguiled children in her soft, sweet voice with stories of the lives of classical composers and American folk musicians accompanied on the piano with her lilting renditions. A NATIVE OK CAPE MAY, Miss Porter early in her career chose to dedicate her life to teaching music appreciation and piano to talented and, alas, no-so-talented local youngsters. Any child who listened to Miss Porter’s musical tales, has been enriched. Those youngsteps have grown and matured, becoming parents and grandparents, their school days long behind them, while Miss Porter has remained at the keyboard continuing her musical instruction. DEDICATION OK THIS KIND has become so rare it is no wonder this community regards Miss Porter as the dean of its most gifted citizens. There was a great deal of secrecy involved in the planning of the surprise tribute to Miss Porter It was an effort well worth the time and effort admirers of Miss Porter will long remember.

the economy

analysis & viewpoint

analysis

Prospects for the New Jersey economy in I960 are very much the same as those for the natiWi as a whole. / Unemployment is likely to rise as homebuilding slackens further and as reduced consumer demand cuts into factory orders. Continued expansion of services and of the casino industry in Atlantic City should serve as a buffer, as should a relatively heavy volume of non-residential building activity already scheduled or on the drawing board. The non-cyclical nature of anticipated growth in Atlantic City could help New Jersey outperform the nation during the year ahead, but even if this happens, the state’s jobless rate could reach the 8'* percent range by year’s end — if the nationwide recession unfolds as most economists expect.

The long-predicted national recession has not yet arrived. Despite declining auto sales, sluggish housing starts and negative signals from a broad range of economic indicators, gross national product climbed again in the fourth quarter at a 2.1 percent annual rate after adjusting for inflation. Nonfarm f employment, retail sales and industrial production registered further gains in January. At the same time.

By Jay VanAndel and Richard DeVos There is general agreement that, inflation must, be stopped. Until recently, however, the steps taken were halfhearted at best. But when the inflation rate hit 18 percent in January, the Administration realized that it had to take meaningful action and President Carter announced a wide range of steps including action to balance the budget. In order to solve a problem, one must understand its cause. This is true whether repairing a car, treating the sick or curing inflatiSn. Statements by too many politicians and the commentary of some media experts indicate that there is distressing lack of understanding of the cause of inflation. First, rising wages and prices were said to be the "cause’’ of rampaging inflation. Then came “wage and price

unemployment edged up from its 5.9 percent plateau to 6.2 percent in January, contradicting that month’s gain of nonfarm jobs and adding to the confusion. Though the recession originally expected in 1979 remains elusive, the nation’s growth rate has been very sluggish. Sharply reduced demand for new cars, financing difficulties in the housing market and the ripple effect^ of decline in these industries on other segments of the economy have partially offset continued growth of consumer spending for services, increased business investment in plant and equipment and rising exports to other countries. For the fully year of 1979, gross national product increased by only 2.3 percent compared with 4.4

guidelines.’’ Inflation continued, but the blame shifted! Nowit is OPEC oil that causes inflation. Wrong on both counts. GOVERNMENT POLICY causes inflation. Nothing else. OPEC oil price - even higher food prices induced by bad weather — cause the costof llvlng to increase, and these increases are worsened by the decreasing value of the dollar, but increases in the cost of living are not inflation. Deficit spending by overnment causes ination. Some argue that deficit spending alone is not to blame. They say that if government finances those deficits by borrowing, the currency is not affected. Perhaps not in the short term, but when government consumes much of the available capital to cover its deficits, there are insufficient funds left for industry to expand, and the economy slows down. Eventually, government must monetize its deficits by increasing

percent in 1978 and 5.3 percent in 1977. A growth rate this slow would normally mean rising unemployment. This did not happen in 1979 because unemployment increased faster than output, reversing the rising productivity trend of past years and adding to inflationary pressures. Too often burned by their miscalculations of the past, some economists are beginning to hedge their bets about recession prospects for 1900. Is it possible, some wonder, that the worst could be over, or almost over? Most economists doubt this. It might have been a different story if the sluggish growth of 1979 had been accompanied by an easing of inflationary pressures. But this has not happened.

the money supply (creating new money out of thin air). When that happens, each dollar is worth less. That is inflation, and only government can cause it. Not wage increases, not price increases, not farm prices, not OPEC oil. THINK ABOUT IT. If oil prices caused inflation, Japan and West Germany would have double-digit inflation, too. West Germany imports about 97 percent of its oil Its inflation rate is 6.6 percent. Japan imports 99 percent of its oil. Its inflation rate is 6.9 percent. But the United States imports about 45 percent of its oil and has controlled the price of domestically produced oil since 1971. The U.S. inflation rate is in excess of 13 percent. There is little hope the problems can be solved until those leaders who now refuse to acknowledge the true cause of inflation do so. THERE WILL BE more calls for wage and price controls. The action of the

The fixed-weighted gross national product price ihdex increased 9.4 percent ■in 1979 and was close to 10 percent during the second half of the year. Producers’ prices of finished goods soared at an annual rate of 19 perceiit in January — an ominous sign for future consumer prices which j rose 13 percent in 1979. Inflation is the biggest concern of both the man on the street and the ICaiier Administration. And, short of mandatory wage and price controls, it is difficult to see anything other than an economic slowdown capable of braking the inflationary spiral. If this does not occur as a result of natural forces — such as a defusing of the inflation psychology that has caused consumers to spend beyond their means — it is likely to be brought on by increasingly restrictive monetary and .fiscal policies. With the savings rate a^ an extraordinarily low 3.4 percent of disposable income in the fourth quarter (compared to an average of 5 percent in 1977-78), it is a good bet that consumer spending will weaken in 1980’ Homebuilding is also likely to constract further, and business investment always slackens sodner or later when demand for finished goods slow down. The record of economic forecasters in 1979 gives one pause, but it is difficult to imagine 1980 passing without at least a mild recession and unemployment moving towards 8 percent by year’s end.

This analysis was prepared by the Div. of Planning and Research of the N.J. Dept, of Labor and Industry. Federal Reserve Board to slow the growth of the money supply will also slow the economy and bring cries for more, government (deficit) spending to create more jobs in the public sector. And nothing will have been accomplished. Many economists now predict that the U.S. will experience a modest recession during 1980, followed by a brief recovery period during which rates of inflation will reach 18 to 20 percent, then a very deep recession - This need not be so if those in positions of leadership put political considerations aside, put a limit on government spending and bring the federal budget into balance now. 4 Jay VanAndel is Chairman of the Board of the Chamber of Commerce of the United States. Richard M. DeVos is president and co-founder of Amway.

the SOVEREIGN STATE ol AFFAIRS

BOYD* WOOD

D4D YOU KNOW TH6 GOVERNMENT IS THINKING Of PUTTING A HIGHER TAX ON GASOilNE 7

WHY S THAT’

\ TO KEEP PEOPIE \ FROM BUYING 4 SO MUCH