Time and again President Carter has taken a compartmentalized approach to economic issues that has driven some of his advisers to distraction. This week, in an appearance on a radio talk show in Davenport, Iowa, he did it again.
"I hope that at the end of this year you'll see the inflation rate turning around and start going down again," the President told his listeners. "I believe we will see that happen."
Then on the same show, out of a concern for the continuing United States trade deficit, Carter urged his audience to buy American-made goods even if they cost more than imported goods.
"Sometimes you can buy something a little bit cheaper from a foreign country. But i think it's good for us to try to buy American when we can," the President declared.
If the American public were actually to follow that advice, inflation probably would go up, not down.
Certainly President Carter has had some difficult choices to make in the trade area, because giving added protection to domestic industries from imports often can add to inflation. Generally, he has chosen to give the protection to industries such as steel, textiles, television manufacturing, and footwear, but at a clear cost of higher inflation.
In some cases, the American makers have claimed that foreign producers were selling goods here below cost, an act known as "dumping," which is illegal. Dumping is widely regarded as being unfair, whatever its legality.
But President Carter this week was making no such distinction about fairness, illegalities or anything else. He was simply saying buy American. Since for many industries the principal price competition comes from imports, such a buying shift could only boost prices on a wide range of items.
Carter repeatedly has said that fighting inflation is his number one economic priority. He even sent around a memo earlier this month telling administration officials to stop their somewhat public discussion of the possibility of an anti-recession tax cut because it gave the impression that easing inflation was not the top priority.
Then he himself left the same impression, as he has on a wide variety of issues in the past, when he commented on the trade deficit.
In the first two years of his administration, inflationary impacts were often virtually ignored as policies were staked out on farm subsidies, cargo preference legislation, Social Security tax increases and the like.
Some administration economists complained privately as the choices were made that Carter's top aides at the White House did not understand the links between inflation and each of the decisions, none of which may have added much to the inflation rate while cumulatively they added a lot.
Administrative officials were quick to deny that Carter was in fact suggesting a step that could add to inflation.
"The president is not proposing trade restrictions. Such restrictions might, to the extent that they limit supply, contribute to inflation." said Robert Russell, acting director on Wage and Price Stability.
However, the president is simply appealing to Americans to buy domestically produced goods when they are 'reasonably competitive on price, and of high quality.' Citizen response to this appeal would only result in a shift in demand from imported products to those produced at home. This is not inflationary unless producers are operating to full capacity."
When the president returns from this week's boat trip down the Mississippi, he probably will be hearing more from his economic advisers about the niceties of "Buy American" policies.