Does US need 'production board' to solve energy crisis?

The United States still is not prepared for an all-out energy crunch and desperately need an agency to coordinate decisionmaking, promote production, and control inflation.

That is the urgent word to Congress from four World war II economic coordinators -- John Kenneth Galbraith, David Ginsburg, Robert R. Nathan, and Gardner Ackley -- who helped bring America from Pearl Harbor to victory with a minimum of inflation and a maximum of production.

Seven years after the first Middle East oil embargo the US still has not achieved energy independence, Mr. Nathan warns, who served as chairman of the planning committee for President Roosevelt's War Production Board (WPB). "We seem looking in the confidence and the competence needed to manage the problems of the 1980s," he declares, speaking for his associates.

Will coal replace oil? Nathan, now a consulting economist, does not see "the ghost of a prospect" to meet production goals proposed by Presidents Ford and Carter. Deploring the "business as usual" atmosphere, he says: "We desperately need a top organization in the government, close to the president, which will be responsible for a wide range of activities. . . similar to the War Production Board of the Worls War II."

Economist Galbraith, deputy director of the Office of Price Administration (OPA) 40 years ago and later a Harvard University professor and author, wants a WPB, too. He notes 8.5 million unemployed, with estimates of 10 percent inflation next year.

"There can be no durable form of inflation control which doesn't involve an effective system of restraint on corporate prices and wages," he says. He urges establishment of some "overriding authority."

LAwyer David Ginsburg, who served as general counsel of the old OPA, also sounded the trumpet. Standby rationing controls are necessary, he said. And he lamented that "there is enough opposition to doing what is obviously sensible to preclude it from being done.

So we are wrestling with an inflation that we have failed to curb," he said. "This is the most ominous economic development that has occured in my lifetime. We have not yet been able to agree on an energy policy that effectively limits the use of foreign oil."

He urged President Carter "to serve as a pedagogue, to teach, to lead," but he said Congress shares responsibility. He added, "My guess is that an overwhelming majority of consumers would welcome price controls."

The Roosevelt veterans testified before the House banking Committee. The fourth witness, University of Michigan economist Gardner Ackley, who served with the WPB, urged voluntary rather than mandatory wage-price controls in the present inflation, implying that the other takes an actual war emergency to work.

"Today's inflation," Mr. Ackley asserted "reflects not an excessive demand for goods and services but, basically the effort of each group or sector to pass along to others the price increases that its members must pay. Controls won't alter this."

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.