TRYING TO DISCERN the main outlines of President Carter's economic strategy is like trying to pick out a landscape through a fog. You get a glimpse here and there, but then the wind shifts and obscurity settles back. Now the chairman of the Federal Reserve Board, Arthur Burns, has begun saying nice things about Mr. Carter's economics - a positive incitement to speculation about deals and further sweeping turns of course.
Our own guess is that Mr. Burns is only trying to nudge the President closer to his own position by lavishly praising certain selected administration statements and studiously ignoring others. He certainly has been given a wide range of recent White House utterances to choose from. The confusion here is deeper than the mere customary jostling among a Democratic President's mosaic of constituencies. In the past five years the American economy has changed a lot faster than people's ideas about it. The President is constantly being caught between his experts, who tell him that the old remedies won't work, and those good Democrats who retort, with outrage, that the old remedies are the party's moral principles and its heritage. The great example at the moment is the struggle over the forthcoming tax-reform plan.
Mr. Carter has repeatedly said that he wants the federal tax system to be more fair. By that, he has also said, he means a more progressive system, taking less from the poor and more from the rich. It further means, as he put it several weeks ago, "a reduction, at least, in the loopholes and tax credits." All of that is good standard Democratic tradition. But Mr. Carter has also said that another fundamental element in his tax program must be the encouragement of greater capital investment. That's where the tax issue gets interesting.
Most economists, regardless of party denomination, currently consider it genuinely important to improve the rate of business investment in this country in order to reduce unemployment. Unfortunately for the White House, that is also what most Republican congressmen, bankers, corporation presidents and coupon clippers think. The political challenge for Mr. Carter and the bright people around him is to find a way of pursuing this necessity without appearing to have sold out to the Republicans, bankers and so forth. How is the President to favor tax breaks for investment without seeming less than a good Democrat?
Mr. Carter is fiddling with the dilemna, But he evidently hasn't thought of a solution yet. In the meantime, he is trying to keep everyone placated by saying mutually contradictory things. He is right to begin talking about investment and tax changes to increase it. But there aren't many people who think that he can do much there while simultaneously making the income-tax system more progressive and reducing loopholes.
The Constitution does not require a President to be totally consistent - least of all on the subject of tax reform. But normal caution suggests the unwisdom of encouraging precisely those pretty tenets that, over the next couple of months, he may have to violate in some degree. The pattern is beginning to seem characteristic of this President. He sees the necessity for unorthodox policy long before he starts thinking about ways to bring his party, and his millions of contituents, along with him.