AS SIGNS of a recession appeared with increasing frequency over the past week, President Bush conferred at length with economists and business people. What's he going to do? If he's well advised, he'll express concern but do nothing more. As he says, it looks as though this recession will be neither very long nor very deep. At this point there's nothing that a president can do to make things better, and a high risk that any attempt to intervene would make them worse.
By the time a recession begins, public policy is generally on automatic pilot. That is particularly true in the present case, since last month's budget agreement has put the budget on a fixed track. In the good old days, presidents and congresses responded to recessions by ringing the alarm bells and passing huge public works bills. The public works spending usually began to have an impact about a year after the recession had ended, subsequently aggravating inflation during the recovery.
In theory, at least, the economy will shortly begin to be buoyed up by powerful stabilizers already built into the budget. But the economy has changed greatly in the eight years since the last recession, and it remains to be seen whether all of these stabilizers are still in good working order. Unemployment insurance coverage, for instance, has been shrinking, and by last year only one out of every three unemployed people was actually drawing benefits. There's concern about the credit and banking system. Nobody knows how an economy carrying the past decade's enormous accumulation of debt will react to even a mild recession. But the remedies here are going to have to be designed for the long haul. Emergency patching won't help.
There are several temptations that Mr. Bush should most explicitly resist. He should not press the Federal Reserve System, as he has occasionally done, to get interest rates down sharply. That would only renew anxieties about inflation and send rates up. Mr. Bush says that he's thinking about new tax breaks that would allegedly speed up the recovery. But any attempt to change the tax rules will create new uncertainties, delaying the investment that he wants to encourage. There has been talk at the White House about something splashy in the budget message next February to lift the country's spirits. But that budget won't go into effect until the recession -- if Mr. Bush and most other people are right -- is months past.
American political custom encourages dramatic action in times of even mild distress. But in this case it's going to be wiser to sit tight and see what happens.