The immediate course of the Carter administration's economic policy will be little changed by the replacement of Treasury Secretary W. Michael Blumenthal by Federal Reserve Chairman G. William Miller.
The differences will be of style and of willingness to play the role of the administration's chief economic spokesman to the hilt. Miller drove many financial market participants to distraction with his openness when he first came to the Fed. Blumenthal always shield away from taking such a vigorous public role.
Each man would have been comfortable with the statements and speeches that the other was making shortly before last week's upheaval. Both men targeted inflation as still the nation's number one economic problem, and both argued that it is much too early to decide whether a tax cut or any other form of stimulus is needed to counter the deepening economic recession.
Similarly, both men long have been saying that the dollar's precarious position in foreign exchange markets sharply constrains domestic economic policy choices. And both also favor decontrol of oil prices in the United States, even though President Carter doesn't. Blumenthal vainly backed that option last spring when the president decided to free oil prices over the course of more than two years. Miller was calling for decontrol as late as last week.
Perhaps the most notable policy difference between the pair is Miller's greater enthusiasm for some type of incomes policy such as the administration's voluntary wage and price standards. Blumenthal in the beginning was at best lukewarm to the concept, but more recently has said that the program has worked better than anything else the administration had the option to try. Miller, on the other hand, pushed for such a policy from the moment he arrived in Washington.
But precisely because there is no immediate significance for economic policy in Blumenthal's exit, many observes were appalled at what Carter had done. Above all, it leaves the impression of a president either not in control or else governing by whim, several economic and financial market experts both in and out of government said.
"This borders on the obscene," complained one former government economist. "First he elevates Blumenthal to chief economic spokesman and then he fires the guy. It's change for change's sake, and it couldn't come at a worse time."
For one thing, Charles Schultze, Chairman of the Council of Economic Advisers, is hospitalized with an abdominal ailment for which doctors as yet has been unable to pinpoint the cause. And James McIntyre, director of the Office of Management and Budget - the third member of the economic policy troike - is much more a budget man than economist.
Onto this situation were piled the uncertainties created by Carterhs retreat to his Camp David montaintop for 10 days, and the disappointment abroad in his newly announced energy policy had caused the dollar to drop like a rock. On Friday, the Federal Reserve raised its discount rate - its charge to member banks when they borrow directly from the Fed - from 9 1/2 percent to 10 percent. There also were signs that the central bank had decided to push up market interest rates another notch.
It is hardly the usual practice to raise interest rates on the very day that the latest gross national product figures confirm that a recession began in the second quarter with output declining at a 3.3 percent annual rate. Although unexpectedly rapid growth in the money supply was one reason the Fed gave for its actions, the plight of the dollar took top billing in the announcement.
"It is not an overstatement to say that Carter's performance over the last two weeks led directly to this interest rate hike," said one private economist.
Carter also was criticized sharply for announcing the changes before chosing someone to succeed Miller as head of the Federal Reserve. "You just do not make this sort of move unless you can complete it immediately," exclaimed a former economic policymaker. "Why add that much more to the uncertainty?"
Foreign economic officials have been calling their counterparts in the Carter administration quietly for guidance to what it all means. "They see it in parliamentary terms, of course," said the recipient of several such calls here. "And they think it's a disaster. They are particularly concerned about who takes over at the Fed."
So is Henry Kaufman, the noted economist at Salomon Brothers in New York. Kaufman called appointing the chairman of the Federal Reserve to become Treasury secretary an "unprecedented decision" that raise questions about whether the Fed can continue its traditional role as an independent body able to withstand "political vissicitude" in making policy.
Miller has played a key role in picking several new members of the Fed's board of governors, the last of whom, Florida banker and politician Frederick Schultz, was confirmed only last week. Kaufman said he expects Miller will have have a major say in filling other vacancies there, including his own. "Unless a very independent and forceful individual is appointed chairman, monetary decision-making will become less autonomous" at the Fed, he declared.
Other administration officials are distressed because the changes in the Cabinet and the prospect that many sub-cabinet posts will be vacated, too, have turned everyone's attention away from the president's latest pronouncements on energy policy.
"He had built up a wad of momentum on energy," sighed one official with responsibilities in that area. "We desperately needed that focus, and he diverted it. I really worry whether we can up the momentum again. It seems like we have lost sight of the real problem."
As the new uncertainties fade with the passage of time, actual policies again will become more important than all the signs that, as one private economist put it, "Carter shows no awareness at all of the seriousness of policy symbols."
One of Miller's first tasks will be to reassure the rest of the world that, in fact, the administration hasn't changed policy, that it still cares about fighting inflation and supporting the dollar. His words to a San Francisco audience on Friday, prepared before he was offered his new job but delivered after he had accepted it, should be reassuring.
"We must stay on this path (of fiscal restraint) and achieve a balanced budget."
"We must and will continue our commitment to a strong and stable dollar."
"We must reduce our dependence on oil as an energy source; and we must reduce our dependence on imported oil."
And he might have added, "We must act to reduce the enormous uncertainties President Carter created this week." CAPTION: Picture, G William Miller: has a greater enthusiasm than Blumenthal for some type of income policy. By James K.W. Atherton - The Washington Post