Losing the Inner Instincts

By Hugh Sidey

The White House admits that Jimmy Carter may have drifted out of touch with some economic realities by being cooped up in the Rose Garden because of the hostages in Iran. That was why his speech in Ohio about "turning the tide" seemed out of sync with the alarming slide into recession.

Had Carter talked to an ad salesman on the Los Angeles Times a few weeks ago, he might have known that there were fewer Help Wanted ads, a sure sign of economic stress. Had he stopped in Blair, Neb. (pop. 6,300), the people who live along the highway could have tipped him off that because of soaring gas prices, auto traffic was way down. Had his family stayed at the Holiday Inn outside New York's Kennedy Airport, he could have got the message from travelers having to pay $58.32 a night, a message that sounded slightly different when his official experts delivered it to him a few days ago.

When Presidents get isolated, they miss firsthand observations that sharpen the judgment. They begin to lose the inner instincts that warn when statistics may be deceptive, that suggest human responses that data do not reveal. In no field is it more important to have that internal receptivity than in economics.

Just a little while back, when Jimmy Carter began to prepare his latest assault on inflation, his advisers predicted that restraining consumer credit card privileges might have some symbolic value but little practical impact on the problem. Carter wondered a bit about the advice but put a paragraph about credit cards in his speech. The response from the public was beyond anything predicted. Some people mailed their cards to the White House, others ground them up, and a lot of folks began buying with cash. Carter's gut had been right.

The Brookings Institution's Joseph Pechman, who is a member of TIME's Board of Economists (see ECONOMY & BUSINESS) and has advised several Presidents, believes it is a good thing that the chief is not a formally educated economist. Economists are too narrow, says Pechman. "Political and social factors are needed in making policy." Every President comes to office with a lot of well-honed instincts about the people and little background in making economic policy. He must be tutored. "Most Presidents at first would really like economics to go away," says Pechman. No such luck. But no sooner is a President put in the economics classroom than he is warned not to get too involved in details lest he miss the forecast for the trees. Carter has been told he may be learning too many economic details.

In a time of stress, economic policy may need more psychological input than mathematical analysis. Our very economic success also makes it tougher to pick up the nation's economic tremors quickly. Treasury Spokesman Joseph Laitin points out that we do not have the foreclosures, soup lines, dispossessions and other instant aftershocks from economic swings that used to send signals racing through the political system. Letdowns are more gentle, often hard to detect in the salubrious environment of the Oval Office.

But feeling from his statistics the frustration of farmers who must plant crops while anticipating that they will lose money, or hearing in the charts the grumblings of businessmen as customers melt away, is what being President is all about.

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