Mum's the Word

President Kennedy had decided that mum was the word about the U.S. economy. He canceled his press conference for last week, made no major public pronouncements. But while he was convinced that silence would serve best for the moment, he was having some trouble getting the word to the Administration's troops.

Just when Kennedy was trying to calm the business community,* Solicitor General Archibald Cox betook himself back to Harvard for a speech calculated to make any businessman blanch with dismay. His message: a way must be found to bring Government into wage-and-price-making decisions on a regular basis and at ''a fairly early stage" in the process. It may be enough for now that the Government "make known, widely and forcefully, the general policies that it thinks would advance the public interest." said Cox, but "there are a number of reasons for thinking that in the long run some new procedural arrangement will be required." After all, "only the most cynical will scoff at the restraints imposed by reason and the desire to do the job right." Cox's clear implication was that Government is best able to judge the restraints imposed by reason, that Government is most highly motivated by a desire to do the job right.

Flaunting the Forbidden. The President was irritated by Cox's speech. But the Administration had had plenty of opportunity to block it. When Justice Department Press Secretary Ed Guthman showed an advance copy of the speech to Washington reporters, they immediately warned that it would raise a ruckus. With that advice in hand. Guthman took the speech to Cox's Justice Department boss. Bobby read it, approved it, and told Cox to go right ahead.

Even more disturbing to the White House, since it flaunted a forbidden word, was a speech by a faithful, discreet and nonpartisan public servant. Commissioner of Labor Statistics Ewan Clague. In Atlantic City to address the Interstate Conference on Labor Statistics, Clague became the first member of the Administration to admit that a recession might very well be in sight. If the postwar economic cycle repeats itself, said Clague, a recession is likely to occur in 1963. Noting that many economists have been expecting a recession, he said: "The only question has been exactly when it is coming." If the stock market continues to fall (see U.S. BUSINESS), added Clague, "I'd be worried about a recession early in 1963. instead of later."

Clague's speech hit the Administration hard. Labor Secretary Arthur Goldberg, Clague's superior, issued a swift, snappish rebuttal: "The economic facts do not bear out such an assumption." Clague was telephoned, bawled out, and told to pull back. He and Goldberg worked out an "amplification." "I wish to make it clear that I was not making a prediction," said Clague. "only analyzing historic economic movements."

On a Toboggan. After the Clague flap, the White House ordered that economic pronouncements were to be limited to the top men--Kennedy, Treasury Secretary Dillon, Commerce Secretary Hodges and Chief Economic Adviser Heller. Even then, they were to be made soaringly, and Heller, in Paris for a 20-nation economic meeting, kept a tight lip when questioned about the stock-market slump.

Kennedy's silence-is-the-best-policy stand is probably wise. For there is little question that much of the current economic unrest was caused by Administration words that spoke louder than deeds--beginning with Kennedy's abusive language toward the steel industry. Thus the Wall Street Journal last week reported that even furniture sales have slumped in recent weeks as a result of widespread economic uncertainty. Said Martin Lammert III, president of St. Louis' Lammert Furniture Co.: Business was great. Then Kennedy started feuding with business, the stock market slumped, and our sales have been on a toboggan ever since."

* Last week former President Eisenhower, in a sharp attack on the Administration's economic policies, said: "The Administration seems almost driven to alienate major elements of the business community. Indeed, the official Administration posture can be interpreted only as: 'Business, get friendly-or else!' "

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