October 9, 2017

1959. Bill Downs on Inflation and the Rising Cost of Living

Brief Comments on Inflation

Bill Downs

CBS Washington

June 19, 1959

Once every month, the experts at the Commerce and Labor Departments get together to figure out just how much it costs the average American to live. Since the end of the last World War these economists have been reporting what everyone knows: that the cost of living has been going up.

The report just out for the month of May, for example, shows that small rises in the prices of just about everything except eggs and coffee have pushed the nation's living cost index to an all time high. That means that what we could buy for ten dollars ten years ago now costs us twelve dollars and forty cents.

The economists call this inflation, and since the invention of money, man has been trying to figure out what causes it. Some call it a spiral in which money chases goods. Prices go up, workers demand more wages, thus costs go up and this pushes prices higher.

Well, President Eisenhower warned time and again that inflation is as great a danger to our national security as, perhaps, subversion. Destroy the economy and you destroy our democracy. That is why he has urged the steel industry and the steel union to act prudently in their current wage contract negotiations in New York.

In the economic politics of our time, if the steelworkers get a substantial wage increase, then every other major union in the country will demand the same. And we'll be back on that spiral again.

Now, the unions argue that the steel industry has been making such excessive profits that they could afford to cut the pie, raise wages without raising prices. And the industry then says this is ridiculous.

But there is one way to control inflation. That is for the government to step in and control both wages and profits, slap on rationing, and the rest of it such as happened during wartime.

But no one wants to see this done, because there would go one of our basic freedoms, a thing called "economic democracy."

This is Newsfilm correspondent Bill Downs reporting from Washington.