Quick Ouotes on 1979

A wide ranging collection of theories and ideas about what 1979, the last year in this decade, holds for us all.

"The United States will face a deep, deep depression if inflation continues unchecked."

Alfred Kahn, chairman U.S. Council on Wage and Price Stability

"The probability of a mild recession next year is now 50-50. Housing starts will decline from 2.0 million this year to a trough of 1.4 million and will average only 1.5 million in 1979."

Michael K. Evans, president Chase Econometric Associates

"The causes which forced house prices up so high over the past l0 years will retard new home purchase and result in a decline in housing as an investment. The time is soon approaching when (loan) underwriting standards should be tightened and inflated appraisals discounted. "

"President Carter's dollar-defense measures will probably depress economic growth in the United States to 1-1/20/o or even less next year.

"I hope the measures won't force our economy into a real recession and that the possible slowdown can be of a relatively short duration."

David Rockefeller. chairman Chase Manhattan Bank

Mortgage interest rates will rise along with inflation in midyear 1979 but a steady homebuying pace will nevertheless make next year a good one for housing. Economists' consensus at the 65th Annual Convention Mortgage Bankers Association

"Mortgage rates could hit I l0loor even higherwithin a month or two and mortgage money could begin to dry up within two to three months."

Dr. Kenneth Thygerson, chief economist U.S. League of Savings and Loan Assns.

"There will be no recession in l979 if the voluntary wage-price guidelines receive 'wide acceptance'." (For the administration's game plan to succeed, it must lower inflationary expectations. Inflation, rather than growth or unemployment, is now considered to be the economy's No. I problem.)

Charles Schultze, chairman U.S. Council of Economic Advisers

"Banks are going to start rationing loans. The Federal Reserve Board's recent one-point increase in discount rate - the fee that the Fed charges on loans to member bankswas a clear signal that the Fed wants them to restrict credit.

Albert H. Cox, Jr., president Merrill Lynch Economics Division

"Construction spending will decline 606 next year, reflecting tighter credit conditions. "

U.S. Department of Commerce

Deregulation of the trucking industry as an anti-inflation measure has been cited as a goal of the Carter Administration.

"The trucking industry should be deregulated where regulation isn't useful for freight transportation. Regulating the industry is a governmental burden and its effectiveness is being questioned. The trucking industry is mature and more competition is needed."

Daniel O'Neal, chairman Interstate Commerce Commission

"Total new construction outlays will increase $16.5 bilf ion to a record $215 billion in 1979. Of this amount. the value of residential construction will advance $3.1 billion due to higher prices and a carry-over of housing starts from 1978, which will more than offset a moderate decline in the total number of new housing starts during 1979. Nonresidential construction activitiesboth private and publicwill increase $13.4 billion to a total of $120.7 billion."

Research & Planning Division United California Bank

"The desire for home ownership has never been greater than it is today. Ranking first in interests along with inflation and health care, the ownership of a home for young people is looked at as an investment as well as a place of shelter. Along with the desire for home ownership, there is a public tolerance for the current 100/o-plus home loan interest rate."

Albert E. Abrahams, executive National Association of Realtors

Recent Labor Department statistics show that 35.60h of the consumer price index is housing related, including rents and utilities. That's compared with 18.90/o for food and beverages and 180/o for transportation, the other two big segments of spending.

U.S. Department of Labor

(Please turn to page 57)