THE CURRENT recession marks a turning point, of sorts, in American economic policy. In the past, the federal government has done everything possible to stave off recessions. Often, you could argue, it has done too much. But this time, policy has been ambivalent. The Carter administration didn't engineer the recession, or invite it. But now that the recession is here, it is going to counteract several other kinds of harmful and persistent malfunction in the American economy.
Inflation is likely to slow down in the months ahead, as demand falls. The labor market was clearly overheating during the winter and into the spring. As unemployment goes up, the pressure on wages comes down.
The recession postpones the day of reckoning with the oil import quota that President Carter has set. The decline in business activity will cut the consumption of oil, and imports won't approach the quota until well after the recovery is under way. Enforcing that quota will rquire extremely unpopular measures, and the recession means that Mr. Carter won't have to impose them during the election campaign. In terms of the poll both, rising unemployment may well be much less of a threat to Mr. Carter's fortunes than a reappearance of the gasoline lines.
High interest rates are another issue for next year's campaign and, again, the recession is likely to lower them. Another urgent concern of the Carter administration has been the dollar's declining value against other currencies, and the enormous American trade deficits that have heavily contributed to the dollar's troubles. A recession will help to balance the foreign trade accounts. Americans will buy fewer imported goods while foreigners -- everyone hopes -- will continue to buy more from the United States. If the trade deficit can be diminished, the dollar will be stronger abroad.
There emerges a certain danger that many Americans -- including those in high office who make economic policy -- will come to think of recessions, not as failures, but as remedies. But severe unemployment, on the scale of the last recession, exacts a severe cost in suffering. Recessions are probably not entirely avoidable as stages in the growth cycle.But neither are they very useful as solutions to inflation and its associated evils. In present circumstances, the necessary response for public policy is to help the unemployed generously while accepting the inevitability of some rise in unemployment. If that brings a measure of relief from inflation, it will be -- as they say in the aspirin ads -- temporary relief.