HAVE YOU SEEN the Charlie Brown poster in which Snoopy looks reproachfully at his tennis partner Woodstock as Lucy's shot passes squarely between them? The caption reads: "It doesn't matter whether you win or lose, it's how you place the blame!"
President Reagan blames our present economic problems on the "mess" government have gotten us into over the past 20 years. This must mean that he regards the 1950s as the standard of economic well-being. But the '60s and '70s were probably better for most people than the '50s, and they were certainly better than the '80s up to now.
In the '60s, both inflation rates and unemployment were somewhat higher than in the '50s, but total employment, real Gross National Product and real disposable income were all considerably better. While inflation soared in the much-maligned '70s, the rise in employment and real disposable per capita income were still higher than in the '50s, and the rise in real GNP was about the same.
Over the last year or two, while inflation has certainly come down, employment and real GNP have also declined, and per capita real disposable income has been virtually flat.
The real gains achieved in the '60s and '70s are clear from the accompanying table.
President Reagan is right, however, in saying that our poor economic performance today has its roots in the 60's and 70's. He finds these roots in the policies of previous administrations which he labels such a mess. But if he places the blame on prior administrations, fairness would require him to concede them some credit for the considerable economic growth we experienced while they were in power.
In truth, however, most governments probably deserve less credit and less blame than they or their critics have claimed. Happily and undeniably, this nation and the world as a whole have enjoyed three consecutive decades of sustained and unprecedented economic growth. Some part of that growth may have been attributable to the stimulative macroeconomic policies of governments -- especially the measures taken since World War II to expand international trade and investment and to build true world markets.
But most of the growth was probably due to unplanned causes -- the devastation and deprivation caused by World War II, the technological innovations that the war helped to stimulate, and the undulations of long-term economic cycles that we do not yet fully understand.
Unhappily but equally undeniably, we are now in a phase of deep economic malaise. This phase also is less the result of deliberate macroeconomic policies -- whether of the Reagan administration or its predecessors or both -- than it is the simple consequence of three consecutive decades of sustained economic growth. This growth, much as we wanted and enjoyed it, led to expectatons and demands that create the condition we call stagflation -- a disease of the world economic body about which our best economists still know very little, and for which they have not yet developed a practicable cure. The only remedy we have found so far is to take deliberate government measures to curb growth and increase unemployment -- a policy that no industrial democracy can long endure. And when a deliberately induced contraction lasts longer than we intended, the only governmental remedy we know to reverse it is the Keynesian method of expanding government deficits and the money supply -- a course that will sooner or later rekindle the inflationary fires we have been trying to dampen.
Economists, politicians and the rest of us have much better hindsight than foresight. In retrospect, we can now see that some of the economic fine-tuning practiced during the Ford, Carter and Reagan Administrations was too stimulative or too contractive, or so self-contradictory that it produced the opposite of the result intended. But we should also admit to ourselves that our fine-tuning instruments are still rather crude, and that as the world economy becomes increasingly interdependent, the art of fine-tuning becomes even harder for the government of any single nation to practice by itself.
It would be refresing if, like Paul Volcker, incumbents and candidates would recognize these limitations. But would we put our confidence in a man who admitted that neither he nor anyone else knows exactly how to return us to the path of sustaine economic growth, but offered to do the best he could? To date no postwar politician has been willing to take this risk. Meanwhile, so long as incumbents and their challengers continue to claim they know how to solve the problem, the public can hardly be blamed for turning against those who fail, and offering them as sacrifices to the implacable economic gods.
All over the world, elected governments are being turned out of office because they promised steady economic growth and could not deliver on that promise. Steady economic growth is probably indispensable to the viability of democratic societies, and to sustained world peace as well. How to restore and sustain it is the predominant challenge of our times. We will not meet it by alternating political power between purveyors of rival economic nostrums, but only by admitting the limitations of our present knowledge, and continuing a patient nonpartisan search for solutions we have not yet found.
If we can bring about a resumption of the steady growth of real disposable income and GNP that we expeienced in the 60's and 70's, and at the same time prevent this very growth from pushing us into another period of stagflation, we would be doing very well indeed.