THE WASHINGTON POST, SUNDAY, OCTOBER 14, 1979
They laughed here in Washington the other day at a sarcastic scenario for making Paul Volcker, chairman of the Federal Reserve Board, president of the United States. Now the joke has turned serious.</br></br>For Volcker emerges from his bold move to tighten credit as the dominant figure in economic policy. Jimmy Carter and his advisers have missed an opportunity to develop a broad, comprehensive strategy for the most serious problem facing' the country.</br></br>Volcker, to be sure, has addressed a big part of a big problem. He has changed the way the Fed does business so as to increase interest rates, and make it uncertain as to how high they will eventually go. Those who borrow money to buy goods or finance inventories or speculate in commodities must now. reckon they can be wiped out. Hence the wild fluctuations that characterized markets last week.</br></br>The theory is that by talking very tough the Fed can create uncertainty and thus shatter the expectation of steadily rising prices, which has been at the heart of persistent inflation. It is possibleÛÓeven likelyÛÓthat the inflationary surge will taper off in the next few months. But even if the Volcker policy works, it does not pro-</br></br>One is the danger of deep recession. Consumer demand has been faltering for months now, and most economists believe that the latest shot virtually guarantees a prolonged slowdown with high unemployment. Many thoughtful officials inside the administration want to design a program of tax cuts for business that work against both recession and inflation.