Things have not been going well for the president's economic program in these last weeks, and my purpose in this brief essay is not to express surprise or to assert any self-serving claim to higher past wisdom. And certainly it is not to support Sen. Howard Baker and Rep. Robert H. Michel in their demand that Wall Street be punished by some new and expressly damaging regulation for its lack of good, forthright supply-side enthusiasm. My purpose is to give a modicum of guidance to readers on the terminology by which poor official performance is neutralized, and even beneficiated in high-level public expression. This guidance will be much needed in the next weeks, and I hope that my effort will also be useful to journalists. Covering up on economic shortcoming involves an innocent conspiracy, if there is such a thing, between those who are offering the alibi and reporters who are too lazy, gullible, impressed or charmed to tell their readers what is really meant.
Understanding begins with an obvious asymmetry in all official economic explanation. When things have gone well -- when there has been a fall in the Producer Price Index, a durable rise in economic output or employment -- this is always attributed to wise and effective economic management. Things are going according to plan. Natural factors such as good rains on the Great Plains can be mentioned as having something to do with food prices. But the convention in such matters allows the president, the secretary of the Treasury, the Council of Economic ADvisers and even the secretary of commerce to take credit for the achievement. And since it is common ground for both Democrats and Republicans, liberals and conservatives, left and right that the government is responsible for the management of the economy, this is as it should be. Poor results, in contrast, are never the responsibility of those in charge. Someone or something else is to blame. This asymmetry is a wholly nonpartisan thing; my personal research on the subject extends well back into democratic administrations.
The etymology of the official alibi begins with the reference to recession. For any sustained increase in output in the economy, public officials, as noted, take credit. The converse of such good performance is a decline in production -- a recession. But economic policy-makers do not cause recession. It is said instead and so reported by the compliant journalists that the economy has moved into a recession. Men do the good thing; natural, supernatural or merely inevitable free-enterprise influences do the bad thing. There has recently been some effort to give inflation the same autonomous, untouched-by-human-hands character. We are said to have an underlying or natural rate of inflation; that is the cause of any bad news on prices. Accordingly, no one in public position can be held responsible. However this has had only a limited success. More important are the archaeological and postglacial explanations of inflation and, for that matter, of anything else that is going wrong.
The archaelogical escape traces whatever is currently inconvenient to the feebleness or feeble-mindedness of the past administration. Richard Nixon, when in office, blamed his troubles with prices on wartime inflation that got established under Lyndon Johnson. Jimmy Carter's economists attributed their failures to the economically retarded policies of Ford and Nixon. As things have turned a bit sour in Washington in these last weeks, we have heard increasingly of the bad legacy of Jimmy Carter. It was worse than anyone had expected. Those who hear such an explanation can safely assume that failure is being leavened in a minor way by fraud. The official is saying that we really screwed up, but, in accordance with established procedure, we are shifting the blame back on our predecessors. One notes that this excuse is only used by people who are safely elected and in office. Until then there is a full, even ostentatious ability to correct the mistakes of those predecessors.
The post-glacial alibi refers, of course, to the next ice age; it holds that everything will get better if only more time is allowed. The post-glacial resort is especially important for the monetarists; it is now widely observed in the United States and vividly in Britain that monetary constriction works on inflation only as it creates a painful amount on unemployment, idle plant capacity, small business failure, a housing slump and in our case of trouble for Ford, International Harvester and Pan Am, as well as the good old Chrysler Corp. So economic officials resort to the promise that things will some day get better. Patience is the thing; it should be great, even infinite. The superior feature of this escape is that after six months the promise can be renewed, more patience can be asked, and no journalist will remember from a half-year earlier. And again after another six months. In the interim, as I've often noted, officials will warn against expecting any "quick fix." The drug culture, of all things. The post-glacial alibi is absolutely ironclad. No one can really deny that if you wait long enough there is a chance that the ice will melt and all will be well. Time magazine has already produced a talented post-glacial defense of Reagan's economics that runs to several pages.
Should the president's economic program succeed -- should supply-side expansion combine brilliantly and benignly with monetary restriction to defeat inflation -- then the present guide to economic explanation and associatedLexicographical fraud will be unnecessary. Officials and policy-makers can take the credit, and no one should be so churlish as to deny it. But if there are internal contradictions in current policy -- contradictions that have less to do with ideology than with the difficulty in swimming upstream with restrictive monetary policy and downstream with Arthur Laffer -- then this guide will be invaluable. As the explanations pointout in the press and from television, everyone can make the right mental classification -- natural causes, supernatural causes, theoarchaeological escape, the fine post-glacial prospect -- and respond, one hopes, with vulgar sounds.