The Economy: How the Glow Goes

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When it comes to criticizing the Johnson Administration, U.S. businessmen are careful not to shoot from the lip —in part because they fear Washington's great powers of retaliation. Yet more and more corporate executives are speaking up with increasingly candid criticism of the President's economic policies. They are not nearly so hostile to L.B.J. as they were years ago to F.D.R. or even to J.F.K. Their honeymoon with Lyndon Johnson is not quite over. But it has certainly lost a lot of that old glow.

The mood, which is self-critical as well as critical of the Administration, was perhaps best expressed last week by Bethlehem Steel Chairman Edmund F. Martin. "Government and business must be partners," he told the American Iron and Steel Institute. "To be blunt about it, we in business have not always been ready to accept our responsibility. This has given ambitious men in Government a readymade excuse to move into fields better dealt with by private effort. Worse still, it has reduced our influence in guiding social change."

Complaints of Controls. What is bothering the businessmen? Answers President Tilden Cummings of Chicago's Continental Illinois National Bank: "There's too much arm-twisting, too many controls, too little effort to curb domestic spending, and too many things being done all at once."

The prime complaint centers on what Chase Manhattan Chairman George Champion calls "government by guide line." Alcoa President John D. Harper and Inland Steel Chairman Joseph L. Block are just two of the many corporate chiefs who argue that the wage-price guides are unworkable and unfair in that they are applied unevenly and have not prevented wages from soaring in industries as varied as construction and textiles. Though he endorses many of Johnson's other policies, Gaylord A. Freeman Jr., vice chairman of the First National Bank of Chicago, criticizes the guideline policy because "it's not good substituting the rule of man for the rule of law." Adds Ford Motor Chairman Henry Ford II, usually a Johnson supporter: "In effect, we are moving toward a kind of informal and very spotty price and wage control."

Restraints & Spending. U.S. Steel Ad ministrative Vice President R. Heath Larry worries that Johnson is going ";beyond the law" and using Administrative fiat to impose his will not only in the field of wages and prices but also in foreign investments and capital spend ing. Complains Standard Oil (Indiana) Chairman John E. Swearingen: "If you deal with the law, you know the rules and penalties. But what we have now is like a game where they change the rules every quarter."

There is widespread unhappiness about Johnson's "voluntary" restraints on U.S. capital investments overseas and at home. Though their companies abide by them, both Jersey Standard Chairman Michael Haider and Gulf Oil Senior Vice President W. W. Adams have pointed out that the restraints on spending abroad will weaken the country's balance of payments in the future. Haider also urges cuts in the Government's nondefense spending, which, he notes, has widened the balance-of-payments deficit by increasing demand for imports and diverting some potential exports to domestic markets.