Seymour Harris Says U.S. Economy Caught in Mild Business Recession

The American economy is now experiencing a definite business recession, but there are hopeful signs for the nation's economic future, Seymour Harris '20, professor of Economics, told the Liberal Union Forum last night.

"There can be no doubt about it," Harris said. "We are in the midst of a recession." The current drop in industrial production from last year's levels, an unemployment total nearing four million, and an inventory decrease in American business are distinct evidences of a general business decline, he said.

Despite these weaknesses, a full-scale depression along 1929 lines appears highly unlikely, Harris continued. With government expenditures still at near-record high, a better pattern of consumption and spending spread throughout the economy, strong farm supports, and a more enlightened attitude toward economic problems on the part of the federal government, the American economy seems fundamentally sound, he explained.

Galbraith Predicts Squeeze

While sharing Harris' general optimism on the state of the economy, John K. Galbraith, professor of Economics, pointed to the continuous two-year decline in farm prices as a dangerous soft spot. "For some time to come, there is a reasonably strong prospect of a squeeze in the agricultural sector of the economy." he said.

Any serious rise in economic distress in the coming months is almost certain to give the Democrats control of Congress, Joseph C. Palamountain, assistant professor of Government, told the forum.

"The Democratic Party is still the majority party, but it is a tired majority," Palamountain said. "But the effect of a recession would be to bring the old majority back together again and solidity it," he continued.