Economic adjustment

“ These incentives are sweeping fresh winds of progress across America. Along with restraints on government spending and regulating, they're bringing America the strongest surge of economic growth, jobs, business investment, and spendable income since the 1950's. ”

“ We will work to increase effective demand, shore up weak links, and give full play to the leading role of domestic demand, particularly consumer demand, in driving economic growth.
Second, we must adjust the structure of the economy to raise it to a higher level of development. In changing the pattern of development, we will continue to focus on economic restructuring and independent innovation. ”

“ Wages increased two per cent, while the cost of living, based on the price index of essential commodities, dropped 39 per cent, a most gratifying development. Verily, the rising level of earning and the decreasing cost of living are converging upon a point of economic stability favorable to the great masses of our people. ”

“ Looking ahead, the forecasters are projecting that next year we will enjoy even stronger economic growth. They suggest that the gross national product will rise by a healthy 3.2 percent, which should translate into lower unemployment, more jobs, and higher take-home pay. ”

“ The economy will face difficult moments in the months ahead. But, the program for economic recovery that is in place will pull the economy out of its slump and put us on the road to prosperity and stable growth by the latter-half of this year. ”

“ These farmers on the other hand were beginning to be very much interested in a number of economic reforms which would vitally affect their welfare, such as the reduction and readjustment of the burden of taxation, the control of corporations in the interests of the people, the reduction and regulation of the cost of transportation, and an increase in the currency supply. ”

“ This economic plan is promoting the right kind of recovery and growth through smaller deficits, lower interest rates, lower inflation, and productive investment. It's not the kind of growth we had too much in the 1980's, where there was ballooning debt and paper prosperity. ”

“ Four years ago when I took office, the economy was stagnating; job growth was sluggish; the budget deficit threatened to drown our economy. I believed it was time to change course with a new economic strategy: Invest and grow, cut the budget deficit, sell more products overseas through tough trade agreements, and invest in the skills of our people. ”

“ The question of the play of economic forces thus generally reduces itself to a problem which may be thus stated: What are the conditions of industrial equilibrium? How must prices, rates of wages, and profit be related in order that the various classes concerned may receive such proportions of produce as are compatible with the maintenance of the existing system of organisation? If any specified change occurs, if production becomes easier or more difficult, if a tax be imposed, or a regulation of any kind affects previous conditions, what changes will be necessary to restore the equilibrium? ”

“ But if, on the other hand, growth in the supply of money does not keep pace with the economy's current production, then prices will fall, the nations's labor force, factories, and other production facilities will not be fully employed, or both. ”

“ The consequent shifting of the incidence of industrial returns may be ascertained by enumerating the respective beneficiaries and exploitees of the profit-taking process—the trade advantages of the one class measure the economic disability of the other class; and the attenuation of the incomes of the less favored, as a means to augment the profits of the more favored, is a significant attribute of changing social costs. ”

“ We must emphasize that in 1963, the improvement of the rate of economic growth shall be the main objective of our vigorous and sustained efforts. In the final analysis, it will be the resulting and solid economic foundation that will bring about the lasting benefits to our people. ”

“ Making timely and resolute adjustments to macroeconomic policies and doing everything possible to maintain steady and rapid economic development We maintained the right direction, focus, intensity and pace of macro control, and adopted a series of policies and measures to promote steady and rapid economic development. In a complex and volatile situation, we actively responded to the severe impact of the global financial crisis and worked hard to make our macro control more proactive, targeted and effective. ”

“ If, therefore, an attempt be made to increase industry, not by increase of population, and thus of demand, the cause of industry—not by industrial freedom, its encouragement, but simply by increase of the rate of the dollar—the attempt will be a failure. It is obviously absurd to suppose industry can be increased by decrease of rate. Increase, while in progress, acts as a stimulus, and thus appears to be successful for a time ”

“ It caused the establishment of great new industries and the expansion of others; the maintenance of good wages for American workingmen; the supplying of the American market with American-made goods in place of foreign, often of better quality and at lower prices than the foreign; and at the same time an abundant revenue to be applied not only to the current expenses of government but also to the extinguishment of the public debt. ”

“ It is this arbitrary shifting of cost-burdens, coincident with recent price fluctuations, that accounts for the prevailing outcry against advancing costs of living. Naturally, individuals and groups who fare badly in the process of pecuniary readjustment are prone to complain, and those who account an accelerating balance of income over costs are sanguine.
Whether the United States has reached or passed the industrial condition of maximum per capita productivity is a mooted question; some who have given much study to the problem of production are inclined to support an affirmative conclusion. ”

“ In just 4 years we have replaced trickle-down economics with invest-and-grow economics, responsibility, and opportunity. We've cut the deficit by 60 percent, increased our trade to record levels. We have over 11 million new jobs. ”

“ These reductions in cost by reductions of wages and profits can be immediate; any reductions in cost of production through improvement of management, organization and plant or increasing the efficiency of labour’s output, while necessary for the permanent well-being of industry, are too slow acting for the present emergency. ”

“ A crisis in its last analysis is the result of a lack of adjustment between production and consumption, due primarily to mistakes in production. It is significant that crises usually occur in periods of business prosperity when credit [Pg 56] is easy, prices high, and employment general. Such a period of business prosperity and rising credit may have been begun by a series of good harvests. The demand for manufactured commodities increases, prices rise, manufacturers enlarge their factories or engage in new enterprises, wages and profits go up. ”

“ The continually growing productivity of industry makes necessary a corresponding growth of the market, if disaster is to be avoided. But to enable producers to sell their growing output promptly prices must be reduced and wages must be raised in proportion as the supply of goods increases. For it is only by combining an increase in the money income of the mass of the population with a decrease in the cost of commodities that a country's home markets can be kept expanding with the progress of industrial methods. ”

“ Economic growth has liberated societies from the natural pressures that forced them into an immediate struggle for survival; but they have not yet been liberated from their liberator. The commodity’s independence has spread to the entire economy it now dominates. This economy has transformed the world, but it has merely transformed it into a world dominated by the economy. ”

“ A reduction of prices and wages. That point has a significance to which I will return.
The second cause is the distorted balance which grows up in every boom between different branches of industrial activity. When trade is good, we invariably build ships, produce machinery, erect factories, make every variety of what are termed “constructional goods” upon a scale which is altogether disproportionate to the scale upon which we are making “consumable goods” like food and clothes. ”

“ Trade had developed under the new rule, and had expanded with improved means of communication. Capital had begun to accumulate, and the moneyed classes were in favour of a government that would support public credit and refrain from extortion. The mass of the people were contented, prices being cheap, wages on the rise and employment brisk. ”

“ What the state can do is something which an instinctive judgment of the people is impelling it to do; namely, to adjust rates directly and bring them gradually toward the standard to which competition, if it were working as it elsewhere works, would automatically bring them, namely, that at which wages and interest are fully covered. A surplus above these outlays could always be temporarily secured wherever a special economy had been effected, and the source of legitimate profit would be open to carriers as it is to producers generally. ”

“ In these countries there would never be any deficiency of capital, if its increase were never checked or brought to a stand by too great a diminution of its returns. It is the tendency of the returns to a progressive diminution, which causes the increase of production to be often attended with a deterioration in the condition of the producers; and this tendency, which would in time put an end to increase of production altogether, is a result of the necessary and inherent conditions of production from the land. ”

“ It is not, therefore, in consequence of the extension of the market that the rate of profits is raised, although such extension may be equally efficacious in increasing the mass of commodities, and may thereby enable us to augment the funds destined for the maintenance of labour, and the materials on which labour may be employed. ”

“ But the cyclical fluctuations of trade, with the consequent waxing and waning of the aggregate demand of productive industry, must always be counted on; and these cyclical fluctuations in demand for labour, as we have shown, can be counteracted, and the volume of wage-earning employment in the country as a whole maintained at something like a constant level, by a mere rearrangement over each decade, of the Government works and orders that must in any case be executed within the decade, though not necessarily, as at present, in equal instalments year by year. ”

“ The man who has a dollar in his pocket knows that speculators and gold-gamblers cannot, by some juggle, take five cents or ten cents from its value, in twenty-four hours, as they could a few years ago. The public burdens have been largely reduced. Our exports far exceed our imports, and our balance-sheet with the world shows an immense sum in our favor. The boom of business is heard in the land. The preachers of calamity are out of date. Commerce, industry, enterprise, capital, labor, all feel the impulse of substantial prosperity running through every artery of public and private activities. ”

“ I am grateful that our economy is coming back to life, that optimism and direction are back. The deficit is down. Interest rates and inflation are down. Investments and consumer confidence are up. We have more trade opportunities with NAFTA and with the GATT world trade agreement. Millions of you have refinanced your homes and businesses. The private sector has created about a million and a half new jobs in just 10 months, more than were created in the previous 4 years. ”

“ Eational standards of living are justified by coextensive industrial efficiency. Progressive well-being tends to affect consumption and production in direct proportion; indeed, the stimulus to increased production normally exceeds the desire to spend, and no lasting influence towards advancing prices or costs results. If, however, expenditures are permitted to infringe upon the capital of the country, or of any particular group of the population, or even upon the rate of accumulation of savings, the effect on prices and costs will be immediate. ”

“ The fact that the expectation of changes in the general price level affects the processes of production, is deeply rooted in the peculiarities of the existing economic organisation of society, partly in those described in the preceding sections of this chapter, partly in others to be mentioned in a moment. ”

“ It will help to make the resources of the people do their utmost in yielding an income. Total returns covering all costs, a reduction of those charges on local traffic which have prevented industries from springing up at intermediate points between favored centers, a gradual increase of local production without any positive repression of production elsewhere—such are some features of the general change which the future should bring and which only the power of the state can make it bring. ”

“ The problem is to reduce the volume of money in circulation so as to correspond to a decreased supply of commodities at the same time as we increase the amount of employment and services called for from the Nation. ”

“ Has the progress of wealth and industry no effect in regard to cost of production, but to diminish it? Are no causes of an opposite character brought into operation by the same progress, sufficient in some cases not only to neutralize, but to overcome the former, and convert the descending movement of cost of production into an ascending movement? ”

“ There would be a reduced demand for food: the inferior arable lands would be thrown out of cultivation, and would become pasture; the superior would be cultivated less highly, but with a greater proportional return; food would be lowered in price, and though money wages would not rise, every labourer would be considerably improved in circumstances, an improvement which, if no increased stimulus to population and fall of wages ensued, would be permanent; while if there did, profits would rise, and accumulation start forward so as to repair the loss of capital. ”