THE PROSPECTS for Williamsburg are not altogether reassuring. Can anything serious come out of economic discussions that attract 6,000 journalists? The idea is to bring together once again the seven people who run the governments of the leading industrial countries. But the Europeans have been pressing anxiously for reassurance that President Reagan will not reopen the inflammatory subject of trade with the Soviets. The Americans fear that the Europeans will arrive quarreling among themselves and unwilling, as at the world trade talks last November, to support anything at all. Both Americans and Europeans suspect that the Japanese will lie low, saying little and conceding little. Welcome to Williamsburg.
The agenda will presumably begin with the need to support the economic recovery that is now slowly getting started. Anthony M. Solomon, the president of the New York Federal Reserve Bank, offered a few further suggestions in a recent speech in Geneva. The most useful American contribution to recovery would be to reduce the federal deficit and ease interest rates downward; the most useful German and Japanese contributions would be temporary tax cuts. There's a pretty wide consensus on that--with the possible exceptions of President Reagan, Chancellor Kohl and Prime Minister Nakasone, to whom these are matters of some sensitivity.
Beyond that, Mr. Solomon observes, the Williamsburg meeting needs to take up the Third World's debts and the lending practices of the First World's banks. His short list of proposed safeguards for the future begins with a requirement for greater disclosure of banks' foreign lending. But he adds a point that Congress ought to keep in mind: the banking system is now essentially international, and regulation will work only if all of the rich countries enforce it jointly. The International Monetary Fund is being built into the world's central source of information on lending. By using its resources, the seven governments' regulators will be able to check the kind of dangerous surges in lending that preceded the near- collapse last summer.
And then there are the exchange rates. When the rich countries finally abandoned fixed exchange rates just a decade ago, most people thought that the flows of trade would, generally speaking, determine currency values. But it turns out that a lot of other things affect them as well, distorting and destabilizing the trade patterns on which jobs depend. A great deal of the current friction between this country and Japan, for example, is less the result of the subsidies and targeting that you've been hearing about than of misaligned currencies. The dollar is too high, and the yen is too low. Mr. Solomon thinks that the seven might usefully discuss ways to moderate swings in currencies when they move so far out of line that they threaten to evoke the kind of protectionist reaction that is gathering force in this country now.
Those are the right questions. If the seven don't quite have time to think about them at Williamsburg, they are very much worth careful consideration on the plane home.