The Price of Delay

The capacity of the Eisenhower Administration for delay aften verges on the remarkable. Its current efforts to halt the recession, for instance, have been largely confined to attempts to predict its end. While these prognosticatory feats accord in general with the Administration's "confidence" line of economic thinking, they do not represent any serious attempts to analyze or cure the decline.

As the slump is, so far, not statistically catastrophic, the President's Fabian tactics may have some rationale. But the refusal to let the serious unemployment shake any of his economic convictions can have far more damaging effects. The recession, representing not a "loss of confidence," but a real and recurrent problem in an "affluent society," demands a reassessment of some of the President's cherished economic slogans.

Chief among these is the worship of the "balanced budget" and the almost emotional dread of "deficit spending." If the economy is so constituted (and here a careful analysis is needed) that it cannot rely on private consumption to keep it in a state of expansion, the role of government must be seriously re-evaluated. The Eisenhower Administration has so far shown itself unwilling even to probe the hypothesis.

Certainly it would seem over simple to maintain, as Commerce Secretary Weeks did, that the Sputniks produced a wave of hysteria hoarding. A more sophisticated analysis is obviously necessary. Such a redefinition may well show that America, rich in private goods, is characterized by relative poverty in public goods. Public spending is now so heavily directed towards defense industries that funds for other government services are curtailed. But defense spending is neither an appropriate anti-recession measure nor, hopefully, a permanent cushion for an over-produced economy. To raise the weapons budget in times of depression will constitute an excuse for axing it during a boom, and there is, of course, some hope that the arms race can be restricted sufficiently to prevent over-emphasis on defense spending.

It is obviously absurd to say that the United States has reached Utopia, that it has no further need for development. The overcrowded schools, the urban slums, the obsolescent highways, and the inadequate health facilities throughout the nation give a different picture. But correction of these conditions is generally beyond the scope or daring of private enterprise. It is not, however, outside the realm of government concern, Presidents Eisenhower and Hoover to the contrary notwithstanding.

Both have claimed repeatedly that the recession is not yet sufficiently serious to merit federal spending on socially useful projects. The depression constitutes an opportunity not only to ameliorate various social sore spots, but also to provide a solid foundation for an expanding economy. Injunctions from the White House about increasing both confidence and consumption only tend to obscure the problems of the recession and to postpone the eventual reassessment.

Moreover, the challenge of persistent unemployment may not yet be upon us, but barring an unnatural boom (like another war), it will arrive soon. Unless it is met with more intelligence and imagination than the Administration has shown in dealing with the less serious recession problem, the consequences will be severe indeed. The failure to adjust to affluence may bring the oft-heralded demise of capitalism.