Review

There has been renewed concern in recent months about purchases by foreign citizens of farmland in the United States. In addition to numerous newspaper and magazine articles on such purchases, the U.S. Congress and a number of state legislatures have become concerned with the subject. 

In the summer of 1977, yields on short-term U.S. Treasury bills rose above the maximum interest rates that commercial banks and most thrift institutions are legally permitted to pay on passbook savings deposits.

This report reviews the operations of the Federal Reserve Bank of St. Louis during calendar year 1978. The Federal Reserve Bank of St. Louis, together with state banking authorities, has responsibility for the supervision of 71 state-chartered banks in the Eighth District which have elected to become members of the Federal Reserve System.

This forward outlines the articles presented in this conference issue.

Waves of inflation that have swept over the U.S. since 1965 have been answered each time, by design or accident, with substantially lowered monetary growth. 

The solution to breaking the inflation-recession cycle with its ever-increasing peaks and valleys is conceptually simple: Conduct our nation’s financial affairs in a manner designed to increase total spending in line with the increase in total production. 

Tax-based incomes policy (TIP) is designed to levy an extra corporate penalty income tax on firms that exceed a governmentally determined average rate for wage and salary increases. 

The author supports President Carter’s inflation proposals except for the degree of harshness of the monetary restraints. He sees the tight money proposals as increasing the odds of a recession but doing little to reduce inflation. 

Most of the critics of the monetarist approach to fighting inflation are on the left, advocating various extensions of government power over private wage and price decisions. The author’s own inclination is to tilt to the right, and this critique is aimed from that end of the policy spectrum. 

From the perspective of social welfare maximization, we see the government doing all the wrong things. But what looks like failures from this perspective may not look like failures to the government itself. It may see successes because, if you think about it, economic instability expands the role of government. 

Charles Webster notes that Beryl M. Sprinkel sees as a primary cause of the current inflation the large and growing federal deficits that have made the job of limiting the growth of the money supply more difficult.

Denis S. Karnosky notes that Sidney Weintraub has presented a proposal that emphasizes Weintraub’s concern about the seriousness of the current inflation and the continuing failure of the national authorities to correct the situation.