ROBERT LEKACHMAN DOES NOT mince his words. "The administration program is internally inconsistent, socially destabilizing, and politically divisive," he announces at the beginning of a chapter entitled "Will It Work?"
By that time the reader has already been given a swift but detailed tour of the Reagan economic program designed to point up the inconsistencies and inequities that Lekachman argues will be the downfall of "Reaganomics." His thesis is very serious: that most Americans, and many people in the rest of the world, will be worse off as a result of an economic and political program that is ill-conceived, unworkable, and aimed at helping those who are already well off at the expense of the poor and needy. His style is less serious than his theme. While the book is largely about the economy, Lekachman steers well clear of economists' jargon and writes with a verve and political edge that not many economists have.
With the economy now in the grips of a recession that has indeed lowered American living standards, there should be a ready audience for much of his basic message. The Reagan promises of better economic times for all are looking increasingly threadbare, and people who still support the president are beginning to wish he would change his program.
Lekachman's wit and passion will likely sweep some doubters along with him to condemn the president's program wholeheartedly. But the partisan tone, frequent sarcasm and occasional breathlessness of his book means that it is more likely to cheer disheartened Democrats than to sway Republicans from support of their president.
Greed Is Not Enough is a self-confessed "polemic" about the economic, political and social impact of Ronald Reagan and his supporters, and not a cool dissection of what is or may be wrong with Reaganomics. It is unlikely to endear itself to those who are in basic sympathy with the president and his goals.
However, Lekachman's account of how Reagan's plan cannot achieve its stated goals of more jobs, less inflation, and faster growth, echoes fears now being expressed, although with more cautious phrasing, by many in the president's own party. His description of the bias in the president's plan towards the rich and very rich, the new industries of the South and Southwest, and the military; and away from middle-income groups and the poor, the old industrialized areas of the North, and the civilian sector of the economy jibes with the growing perception in the country that Reagan's policies are "unfair." And many blacks and women will agree with Lekachman's warnings that they will suffer disproportionately from "Reaganomics."
Lekachman did not, of course, see Reagan's latest budget--widely condemned by both conservatives and liberals--before finishing his book. This means that the figures he uses are in many cases now out of date. However, this does not much upset his analysis.
Central to this is the forecast of a clash between supply-side tax cutters and monetarists. They both "know the truth. The trouble is that truth for the monetarists involves salvation by recession, unemployment, business bankruptcy. . . . A more cheerful lot, supply-siders promise to cure inflation by enlarging output, improving productivity, and encouraging saving. To succeed, the supply-side prescription needs the aid of low interest rates and generous quantities of credit," which the monetarist policy rules out.
The monetarists, in this case the Federal Reserve which runs money policy, are bound to win, Lekachman says, predicting that "supply-siders will get their chance only if the monetarists are expelled from the halls of the Federal Reserve." Some noted supply-side supporters of the president, such as Rep. Jack Kemp (R-N.Y.), are already voicing the same opinion. The present recession, combined with extraordinarily high interest rates, bears out Lekachman's prediction that "determined monetarism will always vanquish supply-side economics."
So far Reagan has not called for easier money, as Lekachman (along with many others) believes he will. "If Mr. Reagan behaves rationally, he is most likely to detach himself from this (monetarist) doctrine and let the Fed know that the monetarist experiment should be drawn to a decent halt."
But even if he does, the administration will still have problems. The title of the book expresses Lekachman's skepticism in a nutshell. Giving large tax cuts to those already well off, easing regulation on business and relying on the "free market" to solve economic problems will not work, he believes. "The Reagan vision is admirably simple. The world is sadly complicated. In politics and economics, sensible analysis tends to the complex, tentative, and ambiguous. Seldom if ever is it reducible to snappy one-liners."
Unfortunately, of course, the voters prefer snappy one-liners. Lekachman hopes that after Reagan they will be ready for a radical change, and outlines an "Agenda for the Left" in the last section of his book. But this is the weakest part of the book--perhaps because there is no easy way out of the sluggish growth and relatively high inflation that have dogged the economy in the last decade, or perhaps because Lekachman cannot describe one convincingly.
His earlier analysis of the causes of inflation was rather simplistic and indeed close to that given by conservatives: large budget deficits during the Vietnam war set the stage for an inflation which was worsened by oil price rises in the early 1970s. His cure is that advanced by most economists on the center or left: some sort of wage and price controls.
This, together with the massive involvement of the government in making investment decisions will lead to a sensible redirection of economic policy, he says. But can it happen?
This book is fun to read--for those who oppose Reaganomics--and exposes some of the problems inherent in Reagan's economic policy, including the key one that many of the people who voted for it will be hurt rather than helped by Reaganomics. But it does not give the sufferers, or those in the Democratic party who would help them, a practical guide to alternative policies.