USA's troubles: whose fault?

One of the easiest things in the world these days is to blame it all on President Carter in the White House. After all, what are president for? In time of trouble find a scapegoat, and unload it all on him. A president tends almost automatically to be the national scapegoat.

Many a citizen of the United States is worried about what is happening in and to his country during these days. A high proportion of these tend to blame all the troubles on the President. Many of these will express their discontent on election day by voting against Mr. Carter without necessarily voting for some other person.

Well, how much of it all is really Mr. Carter's fault?

Let's start with what we all call the "recession."

Sooner or later there was bound to be either a runaway inflation or a recession. That condition has been coming on for a long time. The causes are buried deep in the country's past, with a lot of blame available for a lot of people.

Probably the main cause of present economic trouble was a decision made by Lyndon Johnson in 1965. He had decided to increase the US involvement in Vietnam to a half million men. His economic advisers wanted him to increase the taxes in order to pay at least a sizable proportion of the extra costs of the war out of current revenue. President Johnson refused to raise taxes by enough to carry much of the cost of the war.

The decision, take 15 years ago, built an enormous amount of accumulating debt into the US economic system. The federal government had been living more or less within its income from the end of the Korean war until 1965. The Eisenhower and Kennedy years had been a time of stability, careful budgeting, living within income, as a result, a stable dollar. Nothing has been stable since 1965, either in the domestic economy or in foreign affairs.

The debt piled up during the Johnson years by the Vietnam war did not turn into inflation at once. It takes time for conditions like that to effect the whole pattern of a great nation's life. The inflation really started during the middle of Richard Nixon's first term as President when the realization gradually spread through the country that instead of being a traditional Republican budget-balancer, he was in fact a Keynsian.

The average person began to worry about inflation during the rest of the Nixon years, at least when not preoccupied by Mr. Nixon's other troubles. Inflation was widely considered to be the top national problem when Gerald Ford took over the White House. His first big public project was to "Whip Inflation Now." He wore a "WIN" button. So did some others, for a short while. But whipping inflation proved to be unpopular. A little taste of inflation tends to be habit forming. Once people get used to it, they hate to give it up.

So when Mr. Carter took over the White House he had not only a serious inflation underway but a national habit of accepting inflation. Everyone wanted him to stop the inflation, but few were willing to pay the price. Labor wanted no tampering with its habit of getting an annual round of wage increases, usually at rates higher than the inflation justified. Management wanted no tampering with its annual round of price rises, usually at rates well above anything justified by the inflation.

What does a President do is such circumstances? He looks around for ways and means of checking the inflation rate. He tried various methods, all of which broke down on popular and congressional opposition. Finally he found a new chairman of the Federal Reserve Board who decided that it was high time to check the supply of money. And if worked, remarkably well. It worked so well that it suddenly checked an orgy of consumer spending, which is a characteristic of inflation.

And so, almost overnight, inflation turned into "recession." The screams of pain heard loudest came no longer from consumers but from labor and management. Inflation was down sharply, but so too were some business activities. Down worst was the automobile industry -- which had no one but itself to blame for going on building obsolete cars after the 1974 oil embargo gave the industry fair warning. And that in turn hurt steel, which is a prime supplier of Detroit.

Any unemployment is bad socially. But obsolete plants and industries do die out in any healthy economy. And runaway inflation is worse than the unemployment which comes from changes in the economy. Unemployment is heavily cushioned now. April figures showed the US economy in recession, but grocery, clothing, and drug stores were all doing better business than ever. Grocery store sales were up 6.8 percent.

In other words, the American economy is going through a phase of readjustment which was overdue and inevitable. All economic changes cause pain to someone. Inflation hurst everyone. Recession hurts those in marginal or nonessential activities. It hurts particularly those in obsolete plants and industries.

No other man in the White House could have prevented major economic readjustment in the United States. Conceivably, some other man might have shaped it in slightly different ways. But either a recession (which we now have) or ultimately a runaway inflation was bound to happen. If what we are thinking about is the long-term health of the country then we ought to hope that Mr. Carter will not be driven away too soon from his antiinflation measures.

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