This seems to be the season to slam President Carter. Although much of the criticism is just, it is a poor barometer by which to judge either the economic or political outlook.
The intense criticism may understate the Presidents political strength, overlook the underlying momentum of the economy and - at the same time - obscure the genuine weaknesses revealed in the administration's first nine months.
Consider this possibility. Even with a temporary slowdown next year or in early 1979, modest economic growth could push unemployment below 6 per cent by late 1979 or early 1980. With a little luck, mostly on food prices, inflation might subside to the 4.5 to 5.5 per range.
Though failing to match Carter's campaign pledges, these improvements could fortify his re-election prospects. Unemployment would have dropped nearly two percentage points since his election (already, there are more than two million more jobs than when Carter took office), and people would have acclimated themselves to a stable, slowly declining rate of inflation.
Moreover, the change would represent a psychological gain larger than the numbers imply. The unnerving aspect of the wild recession and inflation of the early 1970s was not only their intensity but also their unpredictablity. They spawned a quiet fear that things were slipping out of control.
If this recovery sequence is not inevitable - recession or stagnation remains a threat - it is plausible. It suggests that the economy is slowly unwinding from the high inflation trauma of the early 1970s - and that Carter could be a major beneficiary.
It is against this background that his early performances should be judged. Presidents are usually as much the prisoner as the masters of circumstances. They get blamed, or credited for most of what happens during their administration, whether they deserve it or not. Carter is now being victimized by this progress, but it events drift in his direction, he could just as easily profit from it.
None of this means that Carter hasn't made mistakes only that the news media often exaggerates the significance of those mistakes. For example, Carter is now being accused of creating business uncertainties and, in the process, maiming the economic recovery. But it is doubtful that the real impact of his alleged sins is so tangible. Instead, these charges simply reflect a general backlash against Carter's style and a rude attempt to link his inadequacies to some visible trouble.
For the moment, the link is contrived, but Carter has given ample cause for backlash. At times, he sounds like an aging Boy Scout striving to win a series of important merit badges - his energy, social security, welfare and tax reforms. He is not over ambitious so much as he is overhasty, attempting to do too much too quickly. In the process, he has compartmentalized these problems, treating them as separate issues and not realizing - or at any rate not acting as if he realized - that most are intimately connected. The result has been unnecessary confusion and inconsistency.
Carter's social security package is a prime example of this confusion. Here he is at his Oct. 27 press conference.
"When I am faced with the problem of whether to ignore a depleting reserve, for instance, on social security and letting the integrity of the social security system be threatened on the one hand, or proposing bold measures to correct the social security problems . . . I of course, propose these corrections to the Congress." TR for add 3
The trouble with this self-serving bit of analysis is, simply, that it is wrong, The social security system faced no imminent crisis in 1977. With existing tax rates, the trust fund for old age assistance would last until the early 1980s. While the disability fund faced possible exhaustion in 1979, that could have been remedied without a complex plan to solve all of social security's financial problems until the end of the century. But that is what Carter proposed.
The result: Congress is about to adopt new social security taxes precisely when the economy doesn't need a tax increase to sap consumer buying power. Although the actual increase in revenues in 1978 (about $4 billion under the House-passed legislation) isn't likely to have a major economic impact, the opposite impression is wide-spread. Moreover, the combination of higher social security taxes, high energy taxes and a slowing economy may compel the President to push for a quick income tax cut next year.
The prospect of the government raising one tax (the payroll tax) and lowering another (the income tax) is bound to be bewildering to the average taxpayer. Nor is this an isolated incident.
The payroll and income taxes often have worked at cross purposes in the past decade, requiring hasty and crude adjustments by Congress. The interaction of the two taxes - on economic growth, on income equality, on investment - need to be studied together, and the taxes need to be changed together.
Without violating, his principles Carter could have done this. He could have waited until 1978 and offered his social security tax proposal in tandem with his tax reform plan. Both address the same question: how citizens pay for government. But Carter simply put one problem in one box and the other in another.
Such patchwork policy making does the economy little good, but so far at least, it is now clear whether it does much harm either. Carter does not yet seem to have created the kind of uncertainties that are crippling economic growth and investment.
Whatever the ultimate shape of the social security taxes, most businessmen know that the law will apply universally. The energy package is a byzantine mess, but businesses still know that, over the next decade, natural gas will become more expensive oil may be in short supply and coal will be pushed.
The genuine uncertainties that corrode confidence are not of Carter's creation, and, at best, he could cure them only slowly, if at all: the persistence of inflation, fears of energy scarcities and higher prices, and the tortoise pace of economic expansion abroad.
Americans are prone to inflate the virtues and vices of their leaders, because we optimistically assume that man controls history and not vice versa. Actually, in all but the gravest crises, most leaders are given the opportunity to influence events only marginally. So far, Carter is handling his chance with only mediocre competence, but his fate, and ours, may rest as much with dumb luck as with anything else.