Runaway Inflation Runaway Inflation  
A VEHEMENT and portentous dispute over inflation is now under way, quite openly, within the administration. The issue is being forced by AmericansÛª gradual comprehension of the enormous damage that prolonged inflation would inflict on our country. Over the past generation we have built strong and generally successful protections against high unemployment. But inflation, at the present extraordinary level, is an unfamiliar menace to Americans and in the highest councils of our government there is no agreement where it is going or how it can be controlled.</br></br>It is 'conspicuous that, within the administration, the most optimistic views belong to those people who are &iot economistsÛÓfor example, President Nixon and White House aide Ronald Ziegler. In the spectrum of official opinion, the degree of pessimism seems to rise in proportion to intellectual stature and professional standing. One of the best-qualified students of the current inflation, Dr. John Dunlop, the director of the Cost of Living Council, has concluded that after a midyear dip the inflation rate will actually be rising by the end of the year. The most eminent economist in Washington is the chairman of the Federal Reserve Board, Dr. Arthur Burns, who is now invoking dire and dramatic terms to describe the costs to our society that a long inflation promises. It is worth noting the precise words that these men are using.</br></br>The President sees, as usual, only sunshine ahead. Even before he came under the threat of impeachment, he had great difficulty delivering bad news and this failingÛÓa grave one in a national leaderÛÓis becoming more pronounced. ÛÏI am confident that we will experience further improvements in the economy during the remainder of this year.Û he said in his radio speech last weekend. ÛÏWe expect the inflation rate to be significantly lower than the rate we have experienced in the past 18 months.Û In contrast, the chairman of his Council of Economic Advisers, Dr. Herbert Stein, offers a far more cautious and somber forecast. The Council, in its midyear review published Tuesday, moved away from the precise numerical predictions of its Economic Report four months earlier, with its unqualified assurances of a decline in the inflation rate. Instead, the Council wrote, . a fall in the rate of inflation in the food and energy sectors will reduce the overall rate of inflation. significantly but will still leave a stubborn inflationary; process under way in the rest of the economy. ... The basic problem will be to prevent the slowing trend that does occur from being reversed . . Dr. Stein has been, over the years, a kind of cheerleader for the White House but he is, after all, a trained economist.</br></br>Where Dr. Stein foresees the inflationary process ÛÏunderway,Û Dr. Dunlop expects ÛÏan upturn in the general,rate of inflationÛ toward the end of the year. Dr. Burns, in a remarkable warning delivered a week ago, declared: ÛÏThe gravity of our current inflationary probleqi can hardly be overestimated ... I do not believe I exaggerate in saying that the ultimate consequence of inflation could well be a significant decline of economic and political freedom for the American people.Û</br></br>Since there is no agreement within the administration regarding the future course of the inflation, it is hardly surprising that there is also no agreement about the remedy. The President seems to think that we do not need much of a remedy, since he assumes that the food and oil shortages are over and things will get better by themselves. The number of people who believe that is getting steadily smaller. Suppose, instead, that we take the matter as seriously as Dr. Dunlop and Dr. Burns think we should. They do not have an easy good cheer to offer us. Both have been quite explicit about remedies, and their prescriptions all run to profound structural changes in the way that we regard money and spend itÛÓnot only as a government but as businesses and consumers. But structural reforms require a great deal of time.