The industrial executives of America, who find the bond market o atrocious that they must pay 17 percent to raise money, are unhappy -- and scared.
Small-business men who see the prime interest rate hovering at 20 percent know they face possible bankruptcy, and they are angry.
Automobile dealers and builders of housing watch the stock market plummet like a busted shuttlecock, while interest rates stay at prohibitive levels, and thousands more of their potential customers are laid off their jobs, and they are both distressed and furious.
A business community that voted over-whelmingly for Ronald Reagan does not yet believe in his Kemp-Roth, Laffer Curve supply-side economic program -- and, in fact, is on the verge of declaring "Reaganomics" a failure.
For them, as for myself, those first rosy, promises of "an American renaissance" seemed marvelously simple. Reagan would simply reduce spending on programs to aid the poor, cut sharply taxes on the rich, and Americans would be inspired to work harder, invest more and there would be an expansion of supplies that would devastate inflation. Then, voila? -- there would be a surplus in the federal budget, even after colossal increases in military spending. Almost all of us would have jobs and live happily ever after.
Well, unemployment is rising (up by 155,000 in one month), inflation remains woeful, and the deficit next year is likely to be 50 to 100 percent higher than the president projected. So Reagan's supply-siders have reconsulted their abacuses and concluded that they've got to cut some $30 billion out of the proposed defense budget that begins in October next year. They are saying that social programs will have to be whacked more, and that Social Security and Medicare programs surely will have to be cut. They are even arguing that, to avert fiscal disaster, the United States must go back to the gold standard.
Reagan is withint six months of the time when "personal charm" will not shield him from the public conclusion that he has sold us economic disaster under the label of economic revival. Even now, I cannot avoid the conclusion that the "supply-side" advocates of "Reaganomics" didn't know what they were talking about at the outset, and that they are fumbling in near-desperation now.