EVERY FEW YEARS, something comes along in public affairs, an outburst of public anger or stupendous scandal or whatever, which provokes a chorus of premature obituaries. Liberalism is dead. The New Deal is over, finally. Government is too big, too powerful. The people have spoken.
We are in one of those seasons now, stimulated mainly by the genuine public rage at government and taxes.
Corporate propagandists are busy pro-claiming a new era of laissez-faire in which business is free at last, free at last from the heavy hand of medding bureaucrats.
The anvil chorus of political pundits has identified a "conservative tide" sweeping the land and boiled it down to simple-minded shorthand: The voters want less government, and that is what the smart politicians are promising them.
This fashionable chatter is not totally bilge. But it's mostly bilge.
The businessmen and political seers who think the nation is heading into an era of less government are setting themselves up for a severe case of whiplash, for the political necessities are headed in the opposite direction - toward greater government spending, toward much more serious government intervention in the private economy. If you're looking for a shorthand phrase, it might be more accurate to predict a period of "neo-liberalism."
Here is an alternative version of what to expect, a forecast which is prudently based upon the fundamental economic-political rhythms of modern American democracy:
Sometime in the next 15 months, the Carter administration, notwithstanding its previous rhetoric, will become strikingly more "liberal" - perhaps abruptly so. Congress, despite the usual carping and criticizing, will go along happily with this leftward turn.
This "liberal hour" for Jimmy Carter will be expressed in many ways. A plausible hunch list would include the following:
The Carter government will move to implement direct control over price increases, perhaps wage increases too, once all the voluntary measures have failed to control inflation. Simultaneously, it will begin to pump up the national economy, creating a government-induced boomlet, a temporary prosperity that will extend through 1980.
This will be accomplished by pulling the economic levers available to every president and usually used at election time: By loosening fiscal policies to step up economic growth, stimulating more production, more jobs. By delivering huge chunks of additional cash to voters through tax cuts and increased social-welfare programs. By leaning on federal agencies to step up their distribution of federal largesses, the billions of dollars in government grants which add jobs, construction projects and other tangible benefits to local economies.
If Jimmy Carter does all these things, if he does them wisely and well, his current low standings in the public opinion polls will become as irrelevant as last season's batting averages. By 1980, a grateful citizenry will reelect him to a second term.
If Carter rejects these economic imperatives or botches them or waits too long in his response, then he may well remembered as the first one-term president since Herbert Hoover. In politics, courageous principle translates as stubborn foolishness, after one loses the election.
Does all this sound far-fetched? This scenario for Carter is a precise description of what Richard Nixon did to win reelection in 1972, confronted with quite similar problems - soaring inflation and sagging popularity. In general terms, leaving aside the extreme "liberal" solution of wage-price controls, the scenario describes the leftward economic turn taken by every modern president, save one, as they approached national elections. The exception was Dwigght D. Eisenhower, who stuck with his conservative economic policies and won a landslide victory anyway (but Ike's policies lost Congress to the Democrats three times and lost the 1960 presidential election for Nixon.)
Jimmy Carter, in any case, is not Ike. At the moment, Carter's unpopularity is more comparable to Nixon's in the spring of 1971, when the pundits were likewise predicting that Nixon would be a one-term president.
What changed, among other things, was that Nixon suddenly imposed old-fashioned liberal remedies in the grossest manner. An awkward regulatory lid was clamped on all prices and wages. The spigots were opened for an awesome pump-priming of federal dollars. By the autumn of 1972, Americans were "feeling good." The GNP in the final quarter of that election year jumped upward by an extraordinary 11.5 percent - nearly three times the normal growth rate. Nixon, aided by the ineptness of his Democratic opposition, won by an historic landslide.
It is fatuous, of course, to predict flatly that his president will follow the exact behavior of that president or any other president.History doesn't repeat itself mindlessly. But history does offer us patterns and probabilities in public affairs, a strong cycle which reoccurs with such regularity that these patterns - not the short-term controversies and outbursts - are the true baseline for judging the shifts and turns of public policy.
No one, of course, would argue that Nixon's economic tricks were the only factor in this '72 landslide, that any president has omnipotent control over the economy, or that economics is the only issue in presidential elections. But the "liberal hour" is a fundamental rhythm in national politics, usually ignored and often misunderstood, yet crucial to most elections.
It was the late Adlai Stevenson, a man of ideas as well as wit, who coined that phrase. There is a brief period in American politics, he said, that moment just before national elections, when even the most obdurate conservatives bend themselves toward the liberal political ideas which serve the "greater good" and, of course, the greater number of voters. Every politician in national life knows this intuitively, the smart ones anyway, but it is hardly a fit subject for public debate. It just happens, year in and year out, without any headlines.
Fortunately, the political-economic cycle of the "liberal hour" now has been confirmed in an important new book, "Political Control of the Economy," by Yale Political scientist Edward R. Tufte. With persuasive evidence, Tufte describes the biennial economic surges which flows from politics in even-numbered years of federal elections, strongest in the years when incumbent presidents are seeking reelection, but also present in "off-year" election seasons like 1978 when Congress is on the ballot.
The rhythms are quantified by Tufte: With extraordinary consistency, the American economy prospers more in election seasons. Unemployment is lower. Inflation is more likely to be under control. The national economy grows at twice the normal rate. Real disposable income - the cash which people have to spend after taxes, after inflation - increases twice as fast when a president seeks reelection as it does in odd-numbered years.
Tufte also found that the Federal Reserve Board, notwithstanding its alleged independence from politics, usually cooperates with the political surge in the economy. Except for the Eisenhower years, the rate of growth in the money supply usually increases in the biennial periods prior to presidential elections, and decreases afterwards.
The techniques of political management which product these surges are also described, with great clarity, by Tufte. Some are obvious and well known: the government cuts taxes in election years but raises taxes in odd-numbered years. It increases the direct distribution of money to voters in election years: Social Security benefits, veterans' pensions and other social welfare programs.
Other techniques, revealed by Tufte's research, are not so obvious. Most government grant programs, he discovered, also go through a mysterious autumn surge of distributing cash in presidential election years. In the fall of 1972, for example, the quarterly flow of federal grants jumped by an extraordinary $12 billion, up by one-third. After the election, when Nixon began impounding every program in sight and turning off the spigots, the federal outlays shrunk dramatically.
Tufte assets - and te political memos from the Nixon White House confirm - that intense political pressure was exercised on federal agencies all over the town, pushing them to deliver the bucks faster. Most sensible bureaucrats will cooperate with their president when he tells them to spend more. Wide Public Support
REASONABLE CITIZENS will disagree about the propriety of the "liberal hour," based on their ideological preferences or their notions of how government is supposed to behave. Conservatives or good-government reformers, reading Tufte's account, might shrink in horror at this portrait of politicians "buying" votes with the taxpayers' own money.
Liberals (and probably the overwhelming majority of the populace) probably would look at it differently. They might argue that, for a few months of a year at most, the electoral season forces politicians to worry about the masses of people, the working stiffs and the poor and the ordinary folks. The rest of time, American politics is skewed toward serving more powerful and more conservative interests.
The strength of Tufte's analysis, the quality which sets him apart from so many purist theories of his academic colleagues, is that Tufte accepts the natural conflict between thses two viewpoints as an inherent tension of democracy. The distinctions are not subject to easy definition or goo-goo reforms. An elected government which responds to public need and desire can always be accused of pandering. That does not make unresponsive government more clean or more desirable.
But do the American people really want these "liberal" policies? The answer is clearly yes, though that may come as a shock to those who are promoting the conservative revolt. If we define "liberal" in the old-fashioned way, bequeathed by Roosevelt's New Deal, the activist government which intervenes in the market economy, controlling the behavior of private corporations, stimulating growth and curbing corporate excesses, the American people are still very "liberal."
This is not a new trend or a seasonal anxiety - it is a more or less permanent fact of public opinion.Poll after poll has shown that the general public, when asked about issues of government intervention to manage the economy, is permanently to the left of the political establishment, Republican and Democratic, which decides those questions.
For instance, if Carter does move to wage-price controls, however reluctantly, he will find that popular political support is there waiting for him. His friends in business will be furious. Labor leaders will scream, having been burned in 1972 by the Republican-administeref controls. But the public, according to Gallup, wants controls, 52 to 37 percent, as it always does when inflation becomes a severe problem.
In political terms, the hard choice for Carter would be how to impose controls. He could do it with a Republican bias, as Nixon did, or with a Democratic bias, holding down prices first and counting on that control to dampen wage inflation.
There are numerous other examples of the leftward tilt of public opinion. The public for years has endorsed the idea of government action to guarantee every American a job, yet that concept, embodied in the Humphrey-Hawkins bill, cannot win congressional passage.
The public favors the radical approach of rationing to conserve oil and gas - in preference to the conservative solution of price and rax increases proposed under Carter's energy plan.
The public wants more regulation, not less, to clean up pollution. Indeed, cleaning up air and water, even if it costs a lot more, is one goal on which the American people are unified. Aside from seasonal fluctuations, they do not want a retreat to laissez-faire.
The principal liberal idea which does not have majority support in popular opinion is the guaranteed annual income. A majority is against that, though the opposition is declining gradually, not increasing.
Why have these "liberal" ideas not become permanent government policy, if so many people want them? Again, the answer is a matter of political theology. A conservative might say that, mainly, they are bad ideas which would be ruinous to the national well-being. Therefore, Congresses and presidents embrace them reluctantly or not at all, and then only when political fortune requires it.
A left-leaning spectator night answer that these "liberal" goals are examples of how unrepresentative the American government is, how politicians are more sensitive to narrow, intense objections to change, not to a general progressive atmosphere.
Except for periods of great upheaval and stress, like the Depression which spawned the New Deal, American politics moves quite slowly toward new ideas. National health insurance, for example, has been on the agenda for 30 years, long supported by a majority of Americans. Yet it is not enacted. But if American politics moves slowly - at a conservative pace - it moves toward liberal goals. There are very few exceptions to that rule, especially since 1932.
The Neo-Liberal Congress
SKEPTICAL READERS can test Tufte's analysis in the present season, when so many politicians are preaching empty sermons about less government. It is certainly true that the the voters are angry about high taxes and slothful government, about programs that waste money or don't work (we can all say a-men to that). And it is also true that Congress has taken selected whacks at this and that program, demonstrating its dedication to lean and small.
But, meanwhile, Congress is behaving in this election year pretty much the way Tuft's thesis would predict. It is enacting a tax cut of approximately $17 billion. It is raising veterans' pensions $700 million to $1 billion. It has set up Social Security increases so that millions of grateful recipients received bigger checks this June, increases worth nearly $6 billion a year (the tax boost to pay for that increase won't hit wage earners hard until next year, after the election).
A new wrinkle now has been added to these "feel good" levers - the federal budget calender was shifted to begin on Oct. 1. This means the annual surge of new budget spending in all federal programs will occur at the best time for politicians - one month before the election.
If you listen closely to this season's political rhetoric, there is even a strong strain of neo-liberalism emanating from Republican conservatives. The Kemp-Roth tax cut proposal, embraced by the GOP, sounds like a pumped-up version of old liberal dogma - generous tax cuts reduce federal deficits by priming the economy.
Rep. Jack Kemp, who is the new Republican glamor stock, appears to have a sharp focus on these contradictions, judging from his press clippings. Kemp is an unorthodox conservative who wants an activist government in some areas, less in others. He rejects wholesale cuts in federal spending. He wants to spend more on defense, more on cleaning up air and water pollution. He praises John F. Kennedy and criticizes Herbert Hoover. Rep. Kemp, in short, has read a little history.
Back at the White House, Jimmy Carter on some days sounds very much like a Republican.
The other day, he praised the Federal Reserve Board for raising interest rates - liberal heresy. He struggles to reduce the federal deficits - conservative dogma. He proposes an energy plan designed to curb consumption by raising prices and taxes - a modified market approach which Carter asserts will help fight inflation. Whether he is right or not, individual voters are not likely to see it that way. Most consumers do not believe that higher prices at the gas pump or higher home heating bills will help them fight inflation. Political Dynamite
CARTER'S conservative economic policies have been variously attributed to hsi character or his Georgia origins or to different neo-conservative and Republican experts who advise him. But there is at least one additional explanation: Carter is a Democratic president confronted with an economic problem - inflation - that traditionally demands Republica remedies. Tufts puts it this way:
"To win reelection, Carter must solve the most salient problem and that seems to be inflation. The next most important thing for him to do is behave like a Democrat and there's a lot of tension between those two things."
If inflation could somehow be set aside, Carter's performance as an economic manager looks pretty good. Since his inaugural, the unemployment rate has been dropping, slowly but steadily. Real disposable income is growing at a healthy rate. The nation's economy is recovering steadily from the Nixon-Ford recession, jobs are increasing.
Yet people are angry - mad as hell, you might say - and none of these accomplishments will count for much if the inflation rate continues near or in double digits. The general aggravation may be summarized in the following:
In 1973, the mythical average worker portrayed in labor statistics earned $146.50. By this spring, five years later, his wages were up handsomely to $212. He deserved more money because his productivity increased steadily during that period. Yet everyone knows, from personal experience, that the wage increases are unreal. The average wage leel, when adjusted for inflation, have been sitting still for five years - no real increase from 1973 to 1978.
This is dynamite in American politics, a fact which threatens all the old rules, for all Americans have come to expect, especially since World War II, a steady improvement in their lives, what they buy and enjoy, the basic comforts and, yes, the luxuries too.
If this period of stagnation continues, millions of Americans will feel cheated, and then politics will continue to be angry. But history tells us that popular opinion moves toward government-imposed solutions in times of economic stress, not away from them.
Who is getting hurt the most? It is not so clear. The statistics tell us that, in general, everyone feels squeezeed, but at least half the wage earners are losing groung - earning more pay and taking home less real income. The victims apparently do not fall into neat categories of Republicans or Democrats, professional or blue collar. When Dr. Gallup asks people who is mad about inflation, there are minor variations between groups but the short answer is: Most people are mad, young and old, rich and poor.
The relevent political point for Carter, however, is that his natural constituency, the Democrats who elected him in 1976, are the votes most favorably disposed to government controls. In short, it would be politically plausible for him to move in that direction.
The president obviously has not chosen at this point, though his economic advisers are turning up the heat on their in anti-inflation warnings, promising together "guidelines" and other devices to cajole labor and business into restraint.
If one were cynical, it would make political sense in Tufte's cyclical terms for Carter to let unemployment rise a little in the next six months or so, dampening federal spending and the gross inflationary impulses in the economy. Then, as the election season approaches, assuming that inflation has abated, he can open up the spigots again and make everyone "feel good" for 1980.
President Carter does face one unique tactical problem, different from his predecessors. Carter's "liberal hour" must come earlier than most. He must aim his economic management not merely at 1980, but at next summer and fall when Democratic rivals like Gov. Jerry Brown will be deciding whether to challenge an incumbent president in the Democratic primaries. If Carter wants everyone "feel good" about him much earlier than the autumn of 1980. More Democracy, Not less
NONE OF THIS has really addressed the most important question about the "liberal hour." Is it bad for the country? Political experience tells us that the pre-election "liberal" tilt is good politics. In the short run, it helps to win elections. But, in the long run, do these policies distort the economy and produce a painful hangover?
Tufte, for one, is not prepared to condemn the political-economic cycle by itself. It represents democratic control of economic policies, and he does not relish the typical reform proposal - to "clean up" government decision-making by insulating it from dirty old politicians and turning it over to high-minded but non-elected technocrats. This remedy has been applied again and again by 20th century reformers, to problems of every variety, but it does not seem to have era-indicated political corruption.
Tufte'e solution to the sleazier political manipulation is more democracy, not less. The two modern examples of presidents who grossly damaged the economy by their political manipulation both depended upon deceit and secrecy.
Nixon's overheated economy in 1972 produced a boom-and-bust recession and aggravated the inflation which still haunts us. Lyndon Johnson deceived the nation and the Congress about the true cost of the war in Vietnam, a political trick which caught up with him eventually and set off a decade of high inflation.
In both cases, Tufte argues, a vigilant press and a full-blown political debate might have prevented these presidents from their damaging excesses. Tufte writes:
"The mistakes were not made because gluttonous voters were possessed with 'inflationary bias' or because of 'voter myopia' (except insofar as politicians failed to reveal their economic priorities), or because of an excess of democracy in economic policy-making. Quite the contrary. The operating assumption made by those who undertook and secretly pursued these mistaken policies was, I believe, absolutely correct: Sleazier efforts at manipulating economic policy for short-run advantage cannot survive public scrutiny."
That is a fancy was of saying that the American people aren't dumb, if someone will tell them the facts. Over time, they catch up with most charlatans. Over time, they support policies which are truely in their self-interest. That is another way of saying that democracy will work, if people will let it.