Businessmen remain very uncertain about President Carter's economic policies despite efforts during the first eight months of his administration to woo the business community and gain its confidence.
That is the main conclusion drawn from a series of interviews with business and financial leaders conducted by the Washington Post.
While Applauding some of President Carter's early moves in the economic area - particularly the decision to withdraw the $50 tax rebate proposal and the stand he has taken against wage and price controls notwithstanding campaign statements indicating support of some kind kind of incomes policy - businessmen are nervous about his energy and tax policies and see the overall economic direction as inconsistent and uncertain.
They attribute the disappointingly low level of business expansion plans to the uncertain policy outlook, which they also blame in part for the dive the stock market has taken since the start of the year.
"Clearly from our discussions with business customers throughout the country, the prevailing mood is one of uncertainty about the administration," said Chase Manhattan Bank president Willard C. Butcher. "Frankly, many companies just don't know whether to go forward with capital expansion plans because they've gotten no clear signals from Washington."
There is little concern, however, among those interviewed that the current slowdown in economic growth means another recession is brewing. The businessmen see the slowdown as a breather that will let the expansion continue longer, provided inflation does not accelerate.
But the Bert Lance affair has created further apprehension within the business community which viewed the budget director as sympathetic to its concerns, particularly liked his commitment to a balanced budget, and appreciated the personal clout he enjoyed as President Carter's No. 1 domestic adviser.
Business leaders do not defend Lance's past activities, but they are uneasy because if he leaves Washington as a result of disclosures about his banking record, they will lose the strongest advocate for pro-business policies within the administration.
"He has been something of a bridge to the business community and he certainly has been a fiscal conservative," commented Continental Illinois Bank chairman Roger E. Anderson. "And from the standpoint of following conservative policies, it is hard to see how the situation could be improved if he leaves," Anderson added.
FMC Corp. chairman Robert H. Malott said the Carter administration's goals of balancing the budget by 1981 and also bringing unemployment below 5 per cent and inflation down to 4 per cent by then may be "unrealistic" and "will become more unrealistic when Mr. Lance isn't there to help the President."
"There isn't any other top figure in this administration with the same rapport and understanding that many have felt from Lance," said John Whitehead, managing partner of Goldman Sachs and Co., a major investment banking firm. "And I do see a loss to the business community if he leaves."
Traditionally the Treasury Secretary has served as an administration's but, liaison to the business world but, according to Whithead. Treasury Secretary W. Michael Blumenthal "doesn't seem to have worked very hard on being accessible to business-feel particularly comfortable with him."
At the same time, there is the further complaint that Carter himself has shied from direct contacts with business leaders since he took office.
E. I. Du Pont de Nemours and Co. chairman Irving S. Shapiro, one of the businessmen closest to the administration, says this is "one fundamental mistake" Carter has made. "That's unfortunate, because it's useful for him to hear from the business community directly from time to time."
If Lance departs, "It will be absolutely necessary to replace him with someone of equivalent skills and ties, so at least there will be someone close to the President who can hear people with these views and transmit ideas" to Carter, Shapiro said.
But the most frequently stated complaint about the President's economic policies was that they appear to contradict - particularly in the energy and tax area - his stated goal of increasing business investment.
"There seem to be contradictions and a lack of coherence in policy that are breeding a considerable amount of uncertainty," said George L. Shinr chairman of First Boston, Inc., one a Wall Street's biggest investment banking houses.
General Motors Corp chairman Thomas A. Murphy, while giving Carter good marks for bolstering consumer confidence, said "the one thing that would cause a little concern it the minds of some businessmen is that within the administration a times there is a degree of inconsistency."
"They recognize on the one hand that we do need capital formation to create jobs and get the balance budget which Carter sets as his objective," said Murphy. "But then one of his advisers says we can increase Social Security taxes on business because they can take it out of their coffers. That's not a strong and steady signal. If we're going to have capital formation, we need business profits."
"It sounds to me like there are two different trains running down the same track," commented Shapiro of Du Pont on the energy bill that has been introduced and the tax legislation that has been floated.
"I'm not sure anybody is examin the two together," he added.
Shapiro said "Treasury Secretary Blumenthal is talking in terms of increasing the amount of capital that is left in the private sector. At the same time, the energy legislation is going to take an enormous amount of money out of the economy and going to redistribution it. In terms of capital formation, that has a profound impact. And I wish somebody would coordinate the two."
There appeared to be considerable trepidation on the part of the businessmen interviewed that the administration's tax overhaul plans that soon will be submitted to Congress in fact will decrease incentives for individual and business investment, rather than enhance them as has been trumpeted.
"I would say that in many things the business community recognizes that President Carter is trying," said Donald T. Regan, chairman of Merrill Lynch Inc., parent company of the country's largest brokerage firm. "But it's these inconsistencies that drive them wild."
The strongest opposition to the tax bill seems to be building against the proposal to eliminate the capital gains preference, putting in its place a 50 per cent cap on individual income tax rates and ending the double taxation of corporate dividends.
"Our own survey shows many of our clients are worried about losing capital gains," said Regan. "They're not all sure that losing this bird in the hand, they will gain much from the two in the two in the bush."
Regan cited this concern over lower-investment profits as well as fears about a slowing economy and rising inflation as reasons for the stock market's drop of 15 per cent since the beginning of the year.
"That's a clear indication that investors are saying so far economic performance has not been all that great," he said.
Gabriel Hauge, Manufacturers Hanover Trust Corp. Chairman, said that "in all fairness, one has to say that the President is confronted with a very perplexing series of problems," including the huge budget deficit, the record trade deficit, the unemployment rate and continued high inflation.
"But as to leadship on the whole economic side of the government, that's a little less defined than one might have hoped," Hauge added. And be complained that outsiders are a little perplexed at how economic policy is being made in the administration, "just where the focus is and to what extent long-range economic policies are under continuing and useful evolution.