Business: Competition Goes Global

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Taxing the Forecasters. Those who anticipate a dip in 1963 believe that auto sales can scarcely hold their current pace, argue that there is so much unused industrial capacity around that U.S. business is unlikely to step up significantly its spending on new plant and equipment. Optimists argue in rebuttal that inventories are lean and Government defense spending will rise by about $3 billion next year, that some builders look forward to building at least as many houses (1,400,000) in 1963 as in 1962, and that steelmakers expect their production to rise from this year's 98 million tons to just over 100 million tons.

How the economy performs in 1963 will depend largely on whether the President can persuade Congress to vote a sizable cut in income taxes. U.S. businessmen, enthusiastically on the President's side for a change, view the proposed tax cut much as a company might view a loan. Says influential Wall Streeter Sidney Weinberg, partner of the investment banking house of Goldman, Sachs & Co.: "It's just like when General Motors invests in a new plant—it gets its money back over a period of years."

Manhattan Economist J. Carvel Lange, who a year ago correctly foresaw that the stock market was "highly vulnerable to a sharp reaction before mid-1962" now predicted a bullish 1963 if a sizable tax cut comes in time. "For maximum effectiveness for growth," said Lange, "the reduction must come while the economy is still rising." If the tax cut is enacted by midyear, he predicted a "strong—perhaps booming—acceleration" that would last well into 1964.

Other businessmen, however, see no dynamic new force on the horizon likely to send the well-fed, well-housed, abundantly equipped U.S. into a new boom. Instead, some fear that the U.S. may have to rely for domestic growth chiefly on its normal population increase—which seems to expand the economy at a disappointingly modest 3% a year. Faced with this prospect, which the economists have dourly christened "high-level stagnation." U.S. businessmen in 1962 increasingly looked abroad to markets where millions for the first time had money to spend for much beyond the bare necessities. ''When the aluminum market went soft at home." says Kaiser Aluminum's Chairman Edgar Kaiser, "we almost made up for it by the volume of our business in England."

Berlitz & Button-Downs. Some U.S. businessmen, of course, have been looking abroad for quite some time: Coca-Cola, Caterpillar Tractor, National Cash Register and Colgate-Palmolive get 40% or more of their sales abroad, and their trademarks are as recognizable abroad as at home. The armies of American executives who became global commuters in 1962 helped to increase the volume of international air travel by 20%. From Scotland to Singapore, the button-down collar was as familiar a symbol of the footloose businessman as the carpetbag in the Reconstruction South. To welcome the new invaders, the Banco di Roma issued a fat catalogue of investment opportunities in English. Berlitz, which had only 300 U.S. executives studying on company time in its language schools in 1952, had 3,000 last year, even though most businessmen sit down overseas expecting to talk only English and the universal language of money.