Twice, during the debate last week, President Carter was asked what measures he would pursue to control inflation in a second term, and twice the president ducked the question, offering only vague generalities.
It is, of course, standard operating procedure for politicans to ignore the thrust of a question in press conferences and on TV panel shows and to say instead whatever they think will do them the most good. But Carter and Reagan clung to this time-honored tradition.
But whether Carter can or intends to improve his economic policies is perhaps the crucial question for any voter sitting on the fence, wondering whether Carter deserves a second crack at the White House. His biggest failures have been in economic policy-making, notably his inability to assess the underlying force of inflationary pressures.
From the beginning of the political campaign, Carter has blamed his economic woes almost wholly on OPEC's unquestionably greedy doubling of oil prices last year. He also has been willing to claim credit for a "lowering" of the rate of inflation when all that has happened is that the incredible pace of consumer price increases has subsided to one marginally more acceptable. But the rate is still too high and may well be moving higher.
Economic Council Chairman Charles L. Schultze, at a breakfast conference the morning after the debate, was pressed by reporters to answer the question that Carter had side-stepped: What would a second Carter term be like (referring, of course, to economic policy)? He outlined three elements that would typify a second Carter term:
First, there would be "a careful approach to getting the recovery on track. Let's not overdo it; let's not make it too big." Schultze doesn't expect or want a boom. This cautious tack, of course, is designed to avoid the danger of exacerbating inflationary potential of the economy.
Second, there would be the tax policy announced coincident with the industrialization program, "shifting resources toward the investment side." (As former Economic Council chairman Walter W. Heller noted in his newsletter the other day, Carter's stance on taxes "is that of the traditional conservative, while Reagan's stance is that of the traditional fiscal liberal.")
And third, "We are working on a tax-based income policy," Schultze said. Such a policy -- the acronym is TIP -- would rely on the tax system to provide either a penalty or a reward for businesses and workers adhering to preset wage or price guidelines.
The theory behind TIP is that with the assistance of such a program to hold back inflationary pressures, the government could move ahead a little more courageously to stimulate the economy, thus helping bring down the troublesome unemployment rate. This policy has been urged on the Carter administration before by friendly outsiders, but the administration has put it in the "too-hard" file, fearing it could not drum up the necessary political consensus for a TIP.
We have had several inflationary shocks in the past 15 years," Schultze said, " and a TIP might give us a couple of downward shocks." Only time will tell what a new Carter administration actually would do about a TIP if it is returned to office. Schultze did make clear that, if in the end Carter supports a TIP, it would be a temporary rather than a permanent addition to the tax system.
Basically, the Carter administration's approach will be conservative and gradualist -- one that recognizes, Schultze says, "that we are not going to get the inflation rate down dramatically." He expects a slack economy, with not a lot of progress on the unemployment rate. From the fourth quarter of 1980 to the fourth quarter of 1981, he predicted, the inflation rate will be 9 percent. It is all reminiscent of the steady-as-you-go policy that George Schultz tried to deliver in the final Nixon years.
One wonders, given this analysis by the administration's chief economic adviser, whether a second Carter term would be significantly different than the first -- and, if so, whether that will be enough to shake the nation out of its multiple economic troubles.
I tend to agree with Felix Rohatyn, who said last week in a speech in Houston that the nation is at "the edge of a crisis" and that the presidential campaign has shown no light at the end of the tunnel.
We need bold leadership, but we're not going to get it. Reagan or Carter -- we're condemned to mediocrity for another four years.
The only comfort I find is in a quote from Sen. Russell Long of Louisiana that my colleague Haynes Johnson picked up while assessing views in Wall Street last week:
"No matter how hard we in Washington try to screw the country, the country survives."