Mr. Reagan's prospects

Like all new incoming governments the members of the Reagan team approach Washington with high steps, high hopes, and high expectations. They are a brisk bunch. They are sure they can do better, by far, than the dazed and dispirited Carterites now packing their bags and wondering what will happen to them.

What are the real possibilities for this new team of confident republicans? Actually, not bad.

The key to what is likely to happen over the next four years is the condition of the US economy.

I have a theory which cannot be proved. It's just one of those things one feels. If I am correct in this theory, then the Reagan bunch is going to look happy and successful when 1984 dawns. If I am mistaken, their condition then will be no better than that of the carterites today.

My theory is that the US economy is at the turn of the tide.

Mr. Carter had the misfortune to preside over the last phase of a great economic cycle which began in the Roosevelt era, reached its productive peak during World War II, and coasted downhill from there to the oil crises and the new competitions which marked the late '70s.

Mr. Reagan may have the good fortune to enter office at the beginning of a new cycle during which the vital and new elements in the American economy will begin to take over from the declining and obsolete elements.

The '70s were a poor time for anyone to be in charge in Washington. The oil crisis hit in 1973-74 just as the great industrial structure which carried the allied armies to victory in World War II was running down and becoming obsolete. And this happened at a time when the work force was growing rapidly, partly from increase in the adult population and partly from the increasing proportion of women entering the labor force.

Had the Carter team been more knowledgeable about the fundamental conditions affecting the economy, more intelligent in planning remedies, and more expert in applying them, it is possible that they could have mitigated the conditions troubling the economy. But what they could have done was marginal at best. The plain fact is that the work force was growing when the economy was slackening. And that sets up a problem which no government has yet learned to handle successfully.

It is not possible to be sure that the economy will regain growth in the next four years. But growth of the work force will slow down. Therefore, there is an excellent chance that unemployment will begin to decline, instead of climbing as it has been dooing during the last decade.

If the US is at the beginning of a period of economic growth coupled with a decline in rate of increase of the work force then the Reagan problem will be vastly easier than was the Carter problem. It will be the function of the federal government in Washington to encourage the trend, which is easier than trying to compensate for the downward trends of the '70s. Mr. Carter had to try to stem a decline. If my economic calculations are correct Mr. Reagan will be riding the incoming tide.

All of which is fundamental to political calculations.

We are undoubtedly seeing the last of the Carterites from Georgia. As one Washington veteran put it, "Mr. Carter came to town a stranger, and he is leaving it a stranger." He never mastered the federal bureaucracy, never learned how to make it work, never succeeded in becoming an essential part of the machinery of government. He will have no say in the rebuilding of the Democratic Party.

So, to calculate political prospects one must first know whether the economy will become buoyant. If it does, Mr. Reagan will approach the next presidential year with the happy choice of retirement amid popular plaudits and picking his successor or carrying on for a second term of sailing with a fair wind behind him.

As for the Democrats, there is really little for them to do but wait to see how the next few years work out. They should, of cuorse, get ready for a renewed opportunity in 1984 by refurbishing their organization and looking around for new leaders. But the state of the economy will tell whether they might come back in 1984, or face a long sojourn in the political wilderness.

At the present moment Vice-President Mondale is the obvious caretaker for the Democrats. Vice-President-elect Bush is the obvious heir apparent for the republicans. What we do not know is which one will be most favored by the economic trends of the Reagan incumbency.

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