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Lethbridge Herald, The (Newspaper) - May 31, 1974, Lethbridge, Alberta 4 LCTHBRIDQE HERALD May 1974 MHIOIKIALS Improved CPI needed Inflation is focussing and critical attention on the economic indicators which serve as the basis for public policies and private ventures. The U.S. is revising its consumer price index and its wholesale price initiating and expanding business and expanding the coverage of its gross national product all in an effort to amend some of its wildly inaccurate forecasts of the past year. The U.S. department of for had forecast a rise in food prices of six per cent and they actually rose by more than 20 per cent. The White House had predicted a cost of living increase of 2.5 per cent and it was in error by 6.5 per cent. A government spokesman said there was no doubt the government lost credibility with businessmen and other users of government statistics. In Canada it is the consumer who is most incredulous and the focus of criticism has been on the consumer price index compiled by Statistics to which certain government payments to individuals have been tied. The CPI is computed on the basis of what the average Canadian family spends in a number of specific and some others. The weight given each category is determined by the percentage of income which the average family spends on that category. This leads but not to discrimination against low- income groups. For if the CPI has risen by 10 per a 10 per cent increase in old age pensions would seem to meet the increase. But this discounts the fact that the cost of food may have risen by 17 per cent and that a low- income individual spends a much larger percentage of his income on food than does the Canadian. This lack of statistical sensitivity at least in for the discrepancy between the assumptions of public made by people who have no first-hand knowledge of the and the realities of low income existence as experienced by the poor. Prices and the a new publication of the National Council of makes a very persuasive case for the refining of statistics so that public policy can be more effective in meeting the problems of poverty. This on the low-income consumer in the Canadian marketplace is and non-rhetorical. It is a handbook for action and should be required reading for all those interested in the self- reinforcing problems of poverty. There are apparently still well- informed people who do not as an that identical items of food frequently cost more in a store in a low- income area than in a suburban centre. they may not realize how consumer credit discriminates against the poor by imposing higher interest or takes advantage of them by compelling them to enter the world of credit. In some cases this is done by the subtle combination of high-pressure marketing and easy but it can be even more as the National Anti-Poverty Organization discovered when a survey turned up the fact that half the companies in Ottawa who dispense heating oil will not sell for cash but insist on installing charge accounts. says Prices and the serves a legitimate function among consumers on a rising income Where income is the interest on consumer credit must ultimately eat into spending The book also makes a plea for a change in attitude toward consumer pointing out that as long as governments feel that what happens in the marketplace is a private the consumer will be at the mercy of marketing agencies and the poor with fewest avenues of will suffer most. Statistics which collects an awesome amount of esoteric data for corporate interests can surely produce versions of the consumer price index which will reflect real expenditures of various age and income groups of as called for by the National Council of Welfare. This is particularly necessary if Canada continues to meet the problems of inflation by cross- indexing more areas of its economy. Give go ahead to gallery The most exciting and fitting proposal for the use of the old library building continues to be that of turning it into an art gallery museum. Other ideas put forward for utilization of the facility have merit but do not match that submitted by the committee for a Lethbridge and district art gallery. Although one of the arguments for the gallery is the attraction it would have for visitors to the it should not be assumed that local people would get greater value from the building if it were to be put to some other use. There are many people in the city and district who .have a deep appreciation for and many more who might develop such an appreciation through an opportunity to visit a gallery. A gallery would serve the interests of senior which seems to be the concern be- hind the other two proposals for the use of the old library. It would not only be a place for them to go to spend some time but it might provide a stimulus for taking up art already being pursued by many senior citizens. The opportunity that would be afforded periodically for the display of local output would be exciting. The setting of the old library building seems just right for an art gallery. There must be other locations that could be utilized for crafts and a meeting place for senior citizens. Indeed some places are already utilized for these purposes and more can be found if needed. ART BUCHWALD The all-purpose speech WASHINGTON Vice-President Gerry Ford has been zigging and zagging on the question of impeachment for some time. It's a very difficult position for him to be and since he has to give so many speeches it's hard for him to remember what he said the day before. Because I admire the vice-president very much I have written a standard speech for him which should cover all the bases. It goes like My fellow I would like to say before I begin that I am neither for impeachment nor against impeachment. I believe that a little impeachment never hurt anybody. But if impeachment gets out of hand and starts to affect the then we should take another look at it and decide whether there is another way of resolving the issue which can accommodate the positions of those who are for as opposed to those who are against it. Now let me say at the outset that on the basis of all I have read sc far the president is not guilty of any impeachable offenses. At the same if he is withholding evidence which could show that he should be then he should turn this evidence over to the House Judiciary Committee and settle his guilt or innocence once and for all. I have talked to the president on this very subject and expressed my views quite clearly. He has expressed his views to me. It's quite possible that on the basis of our discussions we may disagree. But the fact that we disagree does not mean that we do not see the question in the same way. The president may have his reasons for not turning over the tapes to the Judiciary and I may have my reasons for him to get the whole thing out in the open. Because the president is stonewalling Congress does not mean that I do not support his efforts to do the right thing no matter if I personally believe it's the wrong thing. I feel the House Judiciary Committee has enough evidence now to judge whether the president is guilty of high crimes and misdemeanors and they shouldn't ask for any more evidence unless they believe they need the evidence to find out if the president is guilty or not. If they need then the president should turn it over to though I think it would be a mistake if the president turned over the material and it was then decided it wasn't the proof they needed. and I have said this many the fact that the president has decided to refuse to give more evidence to the Congress should not be interpreted to mean he is hiding anything. I do not know if he is hiding anything because I have not heard the tapes. And I do not want to hear the tapes because if 1 heard them I would have to make a judgment as to the president's innocence or which would be a mistake if at some future date I would be asked where I stand. I can tell you though that every time I have met with the president he has been in excellent health both mentally and and I am impressed at his ability to see everything so although at times it doesn't seem very clear to me. In conclusion I would like to say that I will continue to support the although I may disagree with him. And I know he supports me. That's why he keeps calling me in to talk to him about why I am not supporting him. If he didn't respect he wouldn't try to change my mind. Would DD FfeLLERg R empty your pockets Const. Stanfield must clarify inflation stand By W.A. Montreal Star commentator OTTAWA When the Con- servatives held their national convention here in it became obvious that they were headed for trouble among themselves over the proposal for a 90-day freeze on prices and to be followed by a much longer period of government controls. Until it had seemed that inflation was one issue upon which the public had a clear-cut choice between very different party so far as the Liberals and Conservatives were concerned. Although David Lewis has been attacking the government record on this his own position and that of the government were not so far apart during the life of the last Parliament. The minister of John is clearly identified with one approach to this particular might inescapably identified with it. He has taken the quite that the origins of our price problems today are to be found in a world- wide supply shortage in the commodity field with a major spill-over into the purely domestic side of the economy. There of an inter- national has driven the price of many of the commodities we sell the world sky high and we do not always complain about that. The price of for although it is a vital food in a hungry tripled from the 1972 low to the 1973 high point. A long list of other internationally traded commodities can be drawn showing heavy price increases ranging from oil seeds and wool on one side to base metals on the other. The Turner approach has been since supply short- ages are pulling prices up in this inflation rather than costs pushing them through the ceil- the only solution is to im- prove the supply. To some ex- if the Turner analysis is correct in the first that simply involves waiting. That was the choice on one side. For Canadians who did not believe that economic short-cuts would the Turner approach could be counted on to have intellectually at any no matter wliat strong emotions rising prices might be stirring up among his adherents. There was another school of thought. Robert Stanfield and James the Toronto professor who would apparently be his finance minister if the Tories form the next were its most conspicuously identified spokesmen. Their approach was while an international inflation undoubtedly did far more of the rising prices affecting Canadians were coming from domestic causes than the Turner school was prepared to admit. They criticized the approach of the finance minister and his adherents as being much too passive. Much more actually could be the Stanfield- Gillies school held. The thing that could be they was to win a 90-day breathing space through the imposition of a strict price and incomes freeze. The time could be used to map out the strategy for the next which would involve a much lengthier period of government controls of prices and incomes. discussion of this scheme has used the term and This is misleading. There was never any reason for suspecting that Mr Stanfield would touch only wages and leave other incomes alone. He has made it abundantly clear that was not his The tiresome for which both Mr.Turner and Mr. Stanfield have their share of as to whether we have done better or worse than other countries during this inflation is really a way of disputing the two versus supply stimulation. The Turner school believed firmly that the imposition of controls would at in- and at worst harmful through longer run disruption of supplies. The Stanfield school held that to rely upon high prices to bring the improved supply that would in turn moderate the inflation was a callous approach to the that something more could be done to help consumers in the in- terim. The public was being offered a very clear in terms of both its immediate support and of alternatives tor which to vote when an election finally as it did. In the Western wing of the Tories quite decisively turned away from the Stanfield approach. As pressure for an early election and with it becoming increasingly clear that David Lewis and the NDP probably would force the Tories did nothing obvious to repair the deterioration tak- ing place in their key economic policy position. Now the news reports of Mr. Stanfield's campaign suggest some softening of his own ad- vocacy of a freeze more a widening of the known divisions within the party over this issue. The political pull of a freeze on incomes to be followed by a year and a halt or two years control of them cannot be very high these days The normal anxiety simply must be to catch up with the price increases that have already taken place. But since the Conservatives have put this forward as their main approach to the inflation prob- they hold to be the central theme of the the public is now entitled to ask them for greater clarity. They owe something to the people who believe the government ac- tually could have done more. The West's most important economic decision By Bruce syndicated commentator Of all the economic developments of the past few the one that may have the most lasting importance for the world was the emergence of what might be the politics of scarcity. Not so long the Western World considered itself so self-sufficient in natural that its initial strategy for the Second World War was primarily economic blockade. Inasmuch as the Western democracies had access to all the raw materials necessary for they hoped to deprive their enemies of these materials and thus cause the collapse of Germany and Ja- pan. it appears that in spite of the military weakness and small population of the Arab they loom as a bigger threat to our economic survival than the Axis powers LETTER ever presented. Many think that their energy problems were the work of a distant desert but excessive demand has been the main culprit. The oil weapon has been effective enough to add a new dimension to international but the world-wide shortages primarily are the result of too much and a thoroughly disrupted savings and investment process. Wealth and living standards have risen in the postwar not only in North Ja- pan and Western but in the so-called underdeveloped areas as well. the factories that sprung up in these places have had an ever increasing appetite for fuel and raw materials. And the cash income factory jobs provided to who not long ago Government services What did Finance Minister Turner have in mind for the handicapped in his last Surely there is a Especially less arrogance from some federal civil servants like one who replied to a disabled Albertan's request for a pension. This woman is a polio victim and was many times a patient in hospitals for major surgery over a period of 40 years. Despite all these she has struggled and been steadily employed thanks to on a low salary since 1939. Now when she needs she is told her condition was neither nor of an If the Canada Pension Plan serves only a chosen then persons such as this Albertan should have been spared the taxation process too. To have all the responsibilities of citizenship and be denied the privileges of government services is not not May our next election eliminate such discrepancies as described. F. OST Medicine Hat were merely has permitted them to bid for the world's supplies of such products as wool and even automobiles. On the other these workers were less likely to be working on farms or in mines producing the raw materials vital to rising industrial activity. In other a world- wide boom has put serious pressure on basic mineral ores and lumber. At the same time world-wide inflation has prevented capacity from expanding sufficiently to meet rising demand. Why has plant mining development and oil exploration work been so To a large inflation is the leading cause of our problem. It leads to the over-expansion of some those catering to the consumers who have found their pockets filled with paper money while other industries have those so-called basic industries. The latter have found that their depreciation reserves were inadequate to finance new plant capacity. inflation has lead to high interest rates that make it difficult to finance these new expenditures. Inflation has lead to a shortage of as opposed to money. There are broad implications in all this. For one it becomes apparent that the private companies that have hitherto played such a major and generally efficient role in exploration of resources face greater exposure to political pressures. matters of supply and price are becoming less subject to market forces and more subject to political negotiation. In the oil industry is attempting to maintain some price but it has had to obtain government approval before implementing various price changes. Scarcity strengthens the position of those who seek every possible opportunity to demand a stronger role by government in managing the economies of the Western democracies. Even though government policies frequently were responsible for the many argue that government intervention is needed in order to surmount the shortages. it is not surprising to read that one- fourth of all the purchasing agents surveyed last December said that shortages of some key raw materials have developed because of the U.S. government's wage and price controls. The greatest rest on our domestic policy makers and their ability to preserve a market economy with its efficiencies and freedoms. That means simply that we must reject the deceptive attractions of state economic the inefficiencies that price controls have brought in the United States and not to mention the Soviet Union's sad experience with a managed should serve as reminders of the evils that controls and government intervention entail. endowed as it is with a plentiful supply of raw materials and uniquely self- sufficient in must demonstrate that the market can be employed to conserve resources and to develop new resources when prices are allowed to do their work. If prices rise sufficiently to encourage demand and new resources will be forthcoming. Deciding whether the free market system oe the response to the era of scarcity is probably the most important economic dfjision faced by the Western World If we take the wrong turn not only will our freedom be but we will be condemned to continuing shortages. The Lethbridge Herald 504 7th St. Alberta LETHBRIDGE HERALD CO. LTD. Proprietors and Publishers Second Class Mail Registration No 0012 CLEO MOWERS. Editor and Publisher DON H PILLING Managing Editor DONALD R. DORAM General Manager ROY F. MILES Advertising Manager DOUGLAS K. WALKER Editorial Page Editor ROBERT M. FENTON Circulation Manager KENNETH E BARNETT Business Manager HERALD SERVES THE ;