Business: Argument for Pessimists

For those still in a bearish frame of mind, Roy L. Reierson, vice president of and chief economist for Manhattan’s Bankers Trust Co., argued that the leveling out of the economy is still ahead.

Speaking before the National Association of Mutual Savings Banks in Boston last week, Reierson noted that “many maladjustments have entered the economy in recent years, and their correction may be neither painless nor swift.” Troublesome problems are the continuing rise in wage rates in the face of unemployment, and the rigid price structure that keeps prices high in the face of surpluses.

Economist Reierson dismissed the idea that the economy will slip into deep depression. But neither did he see any return to the boom for several years. Industry has too much overcapacity for another big investment surge and consumers are so deeply in debt that their buying power will be curtailed for some time. Concluded Reierson: “Admittedly, this appraisal runs counter to much of the economic thinking of our times, which takes for granted a quick return to long-term growth. Yet there is a real possibility that it may well take until the 1960s before the economy regains sufficient thrust to push industrial production to sustained new peaks.”