• U.S.

The People’s Way: Returning to a Free Economy

3 minute read
TIME

As its people had clearly willed that it should, the U.S. this week returned to a free economy.

The election had been quiet and unemotional, but there was no mistaking the fact that the majority of Americans had cast a protest vote. It was a cold but nonetheless angry voice raised against many things: price muddles, shortages, black markets, strikes, Government bungling and confusion, too much Government in too many things. The majority of the people were fed up with all that.

Four days after the election, President Truman threw in the sponge in his administration’s long-lost battle to hang on to price controls. In one sweeping order, the President brushed off price controls on everything but sugar and rice (both in short supply) and on rents. Out went the last wage and salary controls.

No tears fell as the war-built structure, tottering for many months, collapsed in a heap of paper forms. At the end, even its once best friends admitted that trying to keep the structure propped up would do the economy more harm than good. Said the President: “There is no virtue in control for control’s sake.” But he had one last word of excuse for the Government’s failures—”the unworkable . . . law which the Congress gave us to administer.”

Free, but Not Easy. The majority of Americans no longer feared to be on their own in free markets. They expected a period of higher prices—as had happened when meat and other foods went off control. But they also expected that after the first upward surge, prices generally would come back to reasonable levels—as they had on most foods (the Bureau of Labor Statistics wholesale food index showed a 5.5% drop in the last two weeks).

The emphasis now was less on what the public bought over the counters and more on what industry needed. Pricewise, the brakes were off production. The dislocations on metals which had crippled manufacture of batteries, wiring and parts for autos and other products could now be adjusted—at a price (see BUSINESS). The holdback of many production and consumer items was certain to end—as it had in food and many textiles. Business in general did not look for runaway prices; no smart merchant or manufacturer wanted to price himself out of his market.

What would decontrol do in the nation’s most pressing shortage and biggest black market—housing? It would probably be impossible to maintain the $10,000 sales price ceiling on new houses—the nub of Wilson Wyatt’s program for veterans’ housing. Instead, the Housing Authority’s emphasis might be put on incentives to construct low-rental units.

As to rents, the President himself implied that “some adjustment” will be required. The OPA went to work on a survey to determine if and how increases should be allowed. The expectation: busy days ahead hearing the pleas of landlords.

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