Oh, Boy, How Did We Get Into This? : Bush Administration reels as economy falters even more

The American economy is in a deep pickle, and except for having leaned successfully again on the Federal Reserve Board to notch down the discount rate, the Bush Administration obviously doesn’t know what to do about it.

It would be a very partisan point indeed to suggest that anyone else does. After all, there are no magic bullets to be found on anyone’s gun belt these days.

But it’s a nonpartisan point to suggest that no one bears more responsibility for worrying about the economy than the President of the United States. The economic health of the nation is a top national security concern.

POLITICAL: From several perspectives the 1980s of Ronald Reagan was, for the most part, a decade of superficially unblemished economic sunshine. But the formulaic Republican doctrine that underpinned the Reagan economic policies appears to have come a cropper in the ‘90s and now threatens the presidency of George Bush.

His political future is not the prime concern, of course; America’s economic future is. That’s why this newspaper suggested last Dec. 19 that Bush convene a Camp David-type summit conference on the economy.

The suggestion was intended to enable the President to receive the widest possible range of even conflicting economic advice, in order to help him sort out what might be done to end the recession and restore basic buoyancy to the American economy.

The thought was that the country’s economic difficulties were not solely the consequence of a more or less normal downturn in the historical business cycle but were products of deeper changes with which the country had to come to terms. The nation was at an economic crossroads, and the President needed the very best advice from across the land to decide which way to go.

That suggestion was not taken up--perhaps the idea was never in the cards, given that it came on the eve of a presidential-election year, and given this President’s sensitive ego.

But the problem today seems worse than it was in December, and the Administration now looks to be at wit’s end over what to do politically: how to respond to Gov. Bill Clinton’s incomplete but useful and challenging economic proposal, and how to position itself when, or if, Ross Perot moves beyond generalities and plunks down his own serious economic-recovery vision.

PRESIDENTIAL: Politics aside, Bush must not lose sight of the fact that he is President and he still has a job to do as the economic commander in chief. All is not hopeless; useful measures can still be taken.

For instance, the Federal Reserve Board needs to be encouraged to keep going. Last week the discount rate was lowered to 3%, but there is no fundamental economic reason it can’t go lower.

Next, everything and anything that can be done, especially with tax relief, to shelter frightened and besieged small businesses from this stormy recession must be explicitly considered.

Finally, proactive federal programs--such as the recent House-approved urban aid package--can help, without appreciably adding to the level of federal debt.

The only thing we have to fear is inertia itself.