r> atomics and the Recession: Recession Reagan's No. 1 Problem
For the moment, how to cope With recession is Ronald ReaganÛªs biggest problem. The slump this year has brought activity down to a point just, over the levels prevailing three years ago. ThatÛªs stagnationÛÓit started with Jimmy CarterÛªs endorsement of a tight monetary policyÛÓand represents millions of lost jobs and billions of dollars in lost output and federal revenue.</br></br>The housing industry, says Michael Sumichrast, economist for the home buildersÛª association, is ÛÏdecimated,Û with starts in October at the lowest level in 15 years. The spill-over effects of what amounts to a deep depression in the construction industry are widespread, including a devastating but little-noted impact on the lumber industry in the Northwest.</br></br>of the PresidentÛªs Council of Economic Advisers, now admits that the recession will be neither mild nor brief, but equal to at least the average contraction during the postwar period. Instead of a real growth rate of 4.2 percent in 1982 (a question- able forecast the administration used early in the gameÛÓremember the ÛÏRosy ScenarioÛ?), Weidenbaum now admits that the growth rAte will be only 1 percent next year.</br></br>And that rate assumes a smart recovery in the second half of 1982, with ÛÏthe worst of the recession . .</br></br>. hopefully behind us as 1982 unfolds.Û But the trouble is that once itÛªs under way, no one can predict