THE name of this game is not predictions, although they can be the frosting on the cake," says Correspondent Lawrence Malkin, who did the principal reporting from Washington for this week's cover story on the U.S. economy. "The job is trying to explain to people what is happening to their livelihoods and why." This is what we set out to do in our major economic stories, but we are also happy to satisfy the universal taste for frosting. Thanks to Malkin's reporting and the analyses by Business Editor Marshall Loch's staff, the record has been reasonably good. Examples of some pertinent forecasts:

P: Economic recovery in 1971 would at best be slow and lagging (Oct. 12, 1970).

P:The Nixon Administration would set as its 1971 target a $1,060 billion G.N.P., to be achieved by means of a bootstrap operation to boost public confidence (Dec. 28, 1970). TIME said that it would not work, and so far it hasn't. We also predicted that the G.N.P. would fall between $1,045 and $1,055 billion, and it looks as if it will.

P: Contrary to reporting elsewhere, a steel strike this summer was by no means inevitable (May 24, 1971).

P: A split would develop in the Nixon camp over the Administration's economic policies (June 14, 1971). Malkin had previously reported that Federal Reserve Board Chairman Arthur Burns was becoming increasingly disenchanted with the classic economic theory espoused by the President's chief economic adviser, George Shultz.

Much of Malkin's experience in distinguishing fact from fiction on the economics beat is derived from covering the troubled British economy for seven years before joining TIME in 1969. In Washington, as he did in London, Malkin spends endless hours interviewing public officials and private experts. Then he devotes still more hours poring over statistics. Last week, before he sent his report to Loeb, who wrote the cover story, and Reporter-Researcher Nancy Jalet, Malkin met with Cover Subject Shultz, as well as with Treasury Secretary John Connally. He also recently interviewed Burns.

Doing his own pencil work can be just as productive for Malkin. Last summer TIME surprised White House officials when we reported that the President, during a closed-door session with top economic advisers, had set an original budget ceiling of $225 billion (TIME, Aug. 10, 1970). Some aides assumed that there had been a leak. Actually, says Malkin, "the figure was worked out on pads of yellow paper with fragmentary information on budget policy pieced together until there could be no other conclusion."

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