<--PREV Doc #632  |  Memorial Commission Home Page  |  Second Term Table of Contents  |  Presidential Papers Home Page  |  Doc#  |  NEXT--> Doc #634 Document #633; April 2, 1958 To Arthur Frank Burns Series: EM, AWF, Administration Series ; Category: Personal The Papers of Dwight David Eisenhower, Volume XIX - The Presidency: Keeping the Peace Part IV: Recession and Reform; February 1958 to May 1958 Chapter 9: "The problems inherent in this job"   Dear Arthur: I have no quarrel whatsoever with your thesis that the presentation of a government package program for stimulating economic recovery would be better than piece-meal accomplishment or announcement.1 One difficulty that occurs to me instantly is that caused by the laborious and tortuous channels that must be pursued in Washington in the process of translating any good idea into action that even remotely resembles the original thought. Even if, in unusual circumstances, the proposal and the result should be identical, yet there always intervenes time-consuming argument and pulling and hauling that erodes the psychological effect sought in the original plan. With respect to your item (1): When I contemplate the minimum size of the Federal budget that we are now certain to have about 1961, I am alarmed by the amount of deficit spending we shall probably have to do.2 As I try to peer just a bit down the road into the future, I cannot fail but be impressed by the inflationary factors that we shall likely have to combat. A sizeable tax reduction may become one of these; I have not yet been convinced of proof of its necessity. And if it is not needed at the moment then I am quite sure its future effect would be inflationary. With respect to item (2): I agree to the objective you seek.3 But what law could bring about the result you seek? Certainly I do not believe you are advocating Federal price controls. I completely agree with item (3).4 As you know, we are urging some temporary benefit supplements, but I have a feeling that the permanent improvement of the law should wait some definite signs of economic improvement. Otherwise we shall have unwise legislation.5 I agree also with (4).6 With respect to (5), I think we have to do much more than merely get rid of some of the restrictive regulations and laws.7 The railways need more self-help, as well as more understanding on the part of the government and the public. Also, less feather bedding! I do not have before me your "Prosperity Without Inflation," and so must confess that I do not recall the outline of your proposal about reconstruction of the Advisory Board on Economic Growth and Stability.8 As you know, I finally felt compelled to sign the latest Housing Bill, even though certain of its provisions seemed to me to be unwise, if not completely stupid. The freezing of interest rates on veterans’ mortgages with the requirement that the government purchase them at par, is demagoguery at its worst.9 I find that as time goes on, the Republicans in Congress show much more of a disposition to stand by the Administration firmly in legislative activity. But the pity is that we do not have a Republican majority in either house. With warm regard, As ever 1 Burns had written on March 31, 1958 (AWF/A), with suggestions for "fresh measures" to deal with the recession (for background see no. 615). Saying that "we've had enough of individual anti-recession actions," which had given the impression of Administrative "drift," Burns offered a "concerted program that will build a firm bridge of confidence between the present and the future." Burns suggested that Eisenhower should announce such a program himself and include in his announcement both a list of the anti-recession measures already undertaken and a statement that the steps being taken were "entirely adequate to stem the recession," were "designed to minimize risks of later inflation," and were going to be given a "reasonable trial" before further measures could be seriously considered. 2 Burns had suggested as the first item in his program "a broadly based tax reduction for both individuals and business firms." 3 Burns had called for an "amendment of the Employment Act, so that reasonable stability of the consumer price level would become an explicit objective, at law, of Federal economic policy." 4 As his third item, Burns had suggested "permanent improvement of the unemployment insurance system, besides temporary benefit supplements." 5 See no. 598. 6 Burns's fourth proposition called for an amendment of the Highway Act of 1956, "so that two-way flexibility in construction outlays would become possible" (see ibid.). 7 Burns had called for "relief to railroads from the constricting regulations now imposed upon them" (see no. 610). 8 As his final item, Burns had suggested reorganization of the Advisory Board on Economic Growth and Stability "along the lines sketched in the last chapter of my Prosperity Without Inflation" (see nos. 216 and 512). "The Board might continue to function as it now does, except that its deliberations would be preparatory to periodic--say, monthly or semi-monthly--meetings at the highest level of our government." These meetings, to be chaired by Eisenhower and attended by the heads of the departments of State, Treasury, Commerce, Labor, Agriculture, HEW, as well as the Bureau of the Budget, Federal Reserve Board, the Council of Economic Advisors and the White House Office, would turn the Board into a "consultative body" with "a weight comparable to that of the National Security Council in its sphere" (see Burns, Prosperity Without Inflation, pp. 86 - 87). 9 See no. 615. Bibliographic reference to this document: Eisenhower, Dwight D. Personal To Arthur Frank Burns, 2 April 1958. In The Papers of Dwight David Eisenhower, ed. L. Galambos and D. van Ee, doc. 633. World Wide Web facsimile by The Dwight D. Eisenhower Memorial Commission of the print edition; Baltimore, MD: The Johns Hopkins University Press, 1996, http://www.eisenhowermemorial.org/presidential-papers/second-term/documents/633.cfm <--PREV Doc #632  |  Memorial Commission Home Page  |  Second Term Table of Contents  |  Presidential Papers Home Page  |  Doc#  |  NEXT--> Doc #634

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