I leave the United States for another trip to Europe and the Middle East with a sense of black despair. Economic and foreign policy verge on collapse. A survey of the political field discloses no Lochinvar riding to the rescue.
The tightening of credit by the Federal Reserve Board is the important new element in the economic picture. It seems certain to drive the country into recession. Some major corporations and financial institutions are going to be hit very hard, and already the search is on for the weak link.
Chrysler has a federal loan guarantee for $1.5 billion. But what use is that if money has to be borrowed at close to 20 percent interest? Various savings-and-loan institutions, especially in California, are rapidly losing funds. A number of major cities -- including New York, Chicago, Philadelphia and Washington as well as Cleveland -- are in grave difficulty.
Even if the next month or two passes without a major bankruptcy, the steep recession that looms will play havoc with the federal budget. Heavy outlays for unemployment insurance, welfare and other social payments that rise when times are bad are a certainty. Revenues are likely to be cut by bond holders taking tax losses. Despite all the tough talk of cutting the budget, there is almost sure to be a big deficit in the fiscal year beginning next fall.
Combine the deficit with the subsequent measures that will be politically required to stimulate the economy, and the fight against inflation goes by the boards. The best guess is that by April or May a steep recession will be on. Before the end of the year, efforts to stimulate recovery will be under way. That means inflation will take off again -- from a level of about 8 or 9 percent annually.
In foreign policy, setback has followed setback. Afghanistan has already been conceded to the Russians. Pakistan has been obliged to settle for a neutral position. Iran has drowned itself in anarchy. It is by no means clear that the United States can secure the southwest coast of the Persian Gulf -- including Saudi Arabia.
For the Soviet Union has established itself as the paramount power in the area. American efforts to redress the balance are halting at best. This country's partners in Europe and Asia, far from supporting Washington, are taking their distances the better to go into business for themselves with Russia and the Arab oil-exporting countries. In consequence, it is not even clear that the Carter administration can push through with its one diplomatic triumph to date -- the Egyptian-Israeli peace treaty.
Political antibodies would normally be set up by such unhealth in economic and foreign policy. But in confusion, voters have turned to traditional concepts and private values as a means of measuring candidates. A couple of those best qualified as public servants -- John Connally and Howard Baker -- have already flunked the personality test. Two others -- George Bush and John Anderson -- look like failing soon. Though Sen. Kennedy won in New York and Connecticut, these victories seem to be only a reprieve. So President Carter and Ronald Reagan emerge. s
With respect to the president, there is no reason to believe a second term will show improved performance. He has learned little and forgotten nothing. He remains the outsider running against the powers. If anything, there will be added to his defects the one sure result of electoral success -- arrogance.
Reagan, thanks to his success in the primaries, now benefits from a second look on a large scale. Diligent analysts are discovering that he was not a bad governor of California (as if anyone could be) and that he has an appeal to the blue-collar voters (as if George Wallace didn't). But no one should let the rediscovery of Reagan obscure what is already well known: he is a man untrained in affairs of state, with a mind of ordinary powers at best, and the most limited vocabulary. He would not be equal to the presidency in tranquil times -- let alone those troubled by powerful forces difficult to understand and harder still to master.
There is no point in ceaseless complaints. The litany of woe must have an end, but it is hard not to cry on the inside.