AMERICAN ATTITUDES toward recession seem to have changed over the past five years. As the last recession touched bottom in early 1975, there was real fear in the air -- a fear that somehow the fundamental stabilizers of the economy had disastrously broken down. The recession was regarded as an emergency, and policy was single-mindedly devoted to ending the long slide and returning the country to solid growth.
Currently, in contrast, most Americans appear to accept a moderate recession as an unwelcome but unavoidable fact of life. The stabilizers -- the automatic benefit systems already in place -- will presumably level off the present recession around the turn of the year. Further action now won't affect the process much. The real questions of economic policy, for this presidential campaign, do not concern the recession but what comes afterward.
One reason for the different view of this recession is the aftermath of the last one. The Carter administration tried too hard to revive the economy too fast. The resulting inflation shortly reminded the country that there are other ills as corrosive as unemployment. Since nobody wants to repeat the 1977-1980 cycle of accelerating inflation, it's time for both the candidates and the voters to start thinking about post-recession strategy.
Take, for example, the automobile industry and its massive layoffs. A policy that's focused on the recession sees the layoffs and tries to get automobile employment back up. But a policy looking to the recovery period sees that employment in the automobile industry tends normally to be too high, and needs to be brought down. Economic growth means a shift of employment to other industries with better prospects for long-term expansion.
The American auto industry is losing its competitive edge, partly because it uses too much labor to produce a car. Productivity has to be raised, and that requires much more automation. American politicians this summer are talking about putting more people back to work in the auto plants, and selling more cars. But as the economy comes out of the recession, those two goals will be at war with each other. If the manufacturers can't reduce the labor needed to build cars, they are going to sell fewer and fewer of them.
That, incidentally, is why it would be wise to hold the applause for that joint labor-management-government committee the president inaugurated in Detroit this week. In other countries, this kind of operation has usually degenerated into an attempt by the government and the unions to press the companies to maintain jobs, regardless of the cost in efficiency and productivity. For the American auto industry, which is already slipping behind its Japanese competitors in productivity, that would be fatal.
By Inauguration Day, an economic recovery will probably have begun -- slowly, and not very strongly. The issue then will be how hard to push it, and at what risk of inflation.