Carter: The First Two Years

...In a brilliant article, entitled "The Energy Debacle," in the August 1977 issue of Harper's, Lewis Lapham politely termed Freeman "a fervent advocate of environmental reform...

...Recall the hideous screams of the trade unionists, the civil-rights and poverty activists, and the liberal establishment generally when Carter proposed for FY 1979 "only" $8 billion in brand-new outlays and $30 billion in brand-new budget authority...

...One hardly knows where to look for a comparison...

...The point is not, of course, that a President must under no circumstances remove an unfit bureaucrat who happens to enjoy the support of an influential member of Congress...

...It is not a question of intelligence or character, for by all accounts he has plenty of the former and at least enough of the latter to qualify him for the company of most of his post-Wilson predecessors...

...And all this, let us recall, at a time of sharply declining unemployment...

...Carter well-wishers (I stubbornly among them) insisted that a bit of seasoning in the job would soon put it all aright...

...Humphrey and Nixon were exceptionally well-informed and had a sense of what they wanted to do differently from what was being done, even if it could not be said that it was their policy convictions that impelled them to seek the White House...

...Cyclical unemployment, by contrast—exemplified by the auto worker laid off in bad times—is practically nonexistent today...

...How then did the newly-elected Jimmy Carter set about to equip himself in these two vital respects...

...But Carter's mishandling of OMB is positively Paganinian compared to his approach to Congress...

...And that is precisely the point of the most damning indictment of Jimmy Carter's presidency...

...A. different, almost equally disturbing, measure of incompetence emerges from an analysis of Carter's budget-making...

...Freeman sent a copy to then Governor Jimmy Carter of Georgia who, Lapham reports, "carried it around with him as if it were as precious to him as the writings of Reinhold Niebuhr...

...You will search the record exhaustively but in vain for any policy ideas underlying the Carter quest for office other than the triviality of administrative reorganization and vague aspirations toward "human rights" and tax reform...

...But that only makes the plan stupid and dangerous...

...Predictably, his and his boss's grotesque misunderstanding of so complex an institution produced almost at once a shambles in presidential-congressional relations...

...Congress, of course, went happily along with the Carter requests for higher spending...

...He'll catch on to the President-Congress game in a hurry...

...Shreds and tatters of it have finally been enacted by Congress and it is likely to do neither harm nor good...

...To the directorship of the OMB he appointed a small-town, wheeler-dealer crony with a gift for gab, and when this curious appointee turned out to be morally, and perhaps even legally, unsuited to the job, Carter replaced him with still another Georgian with absolutely no pre-1977 experience in the federal government, one James T. McIntyre, Jr., an honest technician almost wholly lacking in the training and force of personality needed to dominate the tumultuous satraps in the bureaucracy...

...Recall that Carter en-trusted overall responsibility for producing the plan to his then energy advisor, James Schlesinger, who delegated most of the actual drafting to one S. David Freeman...

...If presidential success with Congress is measured by the number of vetoes he can keep from being overridden, Carter may well enjoy a marginally successful next two years...

...Nor is he especially culpable for having been, in his pre-presidential ignorance, favor-ably impressed by this Ford Foundation policy extravaganza...

...Even the Brookings Institution, the very Vatican of liberal political economy, finds the Carter unemployment policy difficult to fathom...

...And this book was the consciousness-raiser for Jimmy Carter in what might be the most vital field of domestic policy over which a President could have influence...

...Unfortunately, that truth has not yet penetrated the heavy walls of the White House...

...But if his ambitions extend to a rather more substantial statutory legacy than a weakened national defense and a litter of fractured water projects, he has already ensured for himself a bitterly unhappy retirement...

...A quick study...

...But it is to the next two years that we must turn our uneasy gaze...

...Why do men run for the presidency...

...In order to be at least minimally competent in any new job, one has to have some sense of what one doesn't know and then take steps to fill in the gaps...

...That is why any program designed to deal with structural unemployment must inevitably focus on providing job skills and motivation, enabling those who are presently "unemployable" to acquire a saleable commodity for the labor market...

...All in all, an ideal prescription for precisely the kind of shambles that the Carter presidency has been in its first two years...

...The former provides him with whatever slim hope he may have for exercising some control over the bureaucracy...

...Simply by firing an O'Neill protege as deputy administrator of the General Services Administration—less than a day after Frank Moore had personally assured O'Neill it wouldn't happen...

...An engineer's steel-trap mind...

...Only by under-standing this can we understand his siring of what became the Carter energy program, a program the only two certain results of which will be an enormous increase in federal tax revenues and a concomitant increase in the size and power of that segment of the federal bureaucracy headed by none other than James Schlesinger...

...Writing in the Brookings volume on the 1979 budget, economist John L. Palmer finds: a grossly disproportionate emphasis on public service employment as against job training for the private sector...

...Instead one is forced to posit an arrogance so massive as to be deranging—a hypothesis the evidence for which was only reinforced in mid-October, when Carter himself put the word about that his only mistake in dealing with Congress in the previous year was that he hadn't been tough enough—hadn't vetoed enough bills or can-celled enough water projects...

...It is that in order for a contemporary President to have any hope at all for a successful administration—that is, to be able to carry out a fair proportion of his policy goals and maximize his political influence—he must be institutionally strong in two key areas outside the White House: He has to have a tough, effective Office of Management and Budget to serve as his administrative right arm, and he has to have a good working relation-ship with Congress...

...In fact, Schlesinger is the worst kind of statist, an advocate of the most ruthless state intervention in the economy so long as he is running the bureaucratic machinery...

...THE AMERICAN SPECTATOR VOL...

...Consider, too, that this monumental blunder occurred, as I have said, not in Carter's (and Moore's) The American Spectator December 1978 5 first few weeks in office, but after more than a year and a half of the most intensive apprenticeship and painful experience of mistakes...

...To the contrary, consuming personal ambition seems to have been the principal motive for all but a handful of aspiring Presidents since George Washington...

...the latter offers him his only hope for influencing the broad sweep of domestic policy...

...Schultze wrote a stiff note of protest...

...Little wonder, then, that, as David Broder recently reported on the basis of conversations with former senior officials in OMB, the "professional cadre at OMB" is in the process of "disintegration...

...A more sinister aspect of the origins of the program has to do with the person and beliefs of its chief architect, S. David Freeman...

...Kennedy, as I have said, had no very clear ideas about what he wanted to accomplish in the presidency, but at least he had spent 14 years in Congress and had a pretty good idea of what games were afoot...

...There is a deeper meaning to these aspects of fiscal policy and it has little to do with Jimmy Carter's lack of competence...

...almost certainly it would have sharply increased the Ford requests if the election had gone the other way...

...Not even sheer congenital incompetence seems an adequate explanation...

...He was a Carter supporter on the 1976 Democratic Platform Committee...

...Now Schlesinger, so far as anyone can make out, is simply a power-seeker of surpassing arrogance, a man utterly lacking in philosophy but attractively anti-Soviet in pragrammatic terms, and therefore admired by that sort of litmus-test conservative who will forgive a man any enormity so long as he bawls a loud enough "never trust the Bolsheviks" line...

...But it is no exaggeration to say that, relative to the breadth and complexity of the problems facing a President in a given era, Jimmy Carter is the most ill-prepared man ever to win a major party nomination for the office in American history...

...And so it was that its author became a policy advisor to candidate Carter in 1976 and went on to serve as principal drafts-man of the Carter energy program...

...Both bespeak an appalling lack, not of knowledge, but of judgment...

...The paradigmatic case in our own era may well be John F. Kennedy...

...Jimmy's just so darn bright," they would say...

...What distinguishes Carter from his predecessors is his degree of ignorance about the office...

...But in fact he is a fanatical advocate of the small-is-beautiful, Club of Rome, limits-to-growth doctrine cherished by the New Class...

...Note, too, that Carter has lowered his anticipated budget deficit for FY 1979 by $10 billion from the $61 billion deficit he originally proposed last January...

...The case could be made, in fact, that Carter has succeeded in concealing a positively McGovernite expansion of the welfare state behind a fog-bank of limited-government rhetoric...

...But there is a larger problem with Carter's CETA than even its outrageous cost...

...The citizenry will have less...

...Carter himself was preoccupied with shuffling boxes on an organization chart, because that's what he had done in Georgia and it seemed to work all right...

...It is all too clear—and all too characteristic—that Carter and his advisors have interpreted their nearly unbroken string of failures as essentially a consequence of inadequate PR And so instead of firing Frank Moore they hire Gerald Rafshoon, The grotesqueness of it leaves one gasping for air...

...None of this is meant as a diatribe against ambition in politics, which is neither more nor less admirable than ambition in business, the professions, or love...

...It is a question of competence—the ability to per-form the basic tasks of the office...

...There are two possible explanations for this abject and expensive failure, but the Brookings people are too circumspect to suggest them...

...Characteristically, many in the news media have joined George Meany in complaining that the Carter budget isn't very different from Ford's...

...Consider the single largest departure he has made from the FY 1979 budget that Gerald Ford left behind—the big boost in spending on employment and training programs...

...Here, let me only say that Freeman's scenario would entail, inter alia, an end to suburban development, the prohibiting of private automobiles in cities, federal investment of uncalculated billions of dollars in construction of New Towns and rebuilding of railroads, a sharp cutback in air travel, a freeze on nuclear-plant construction, strict limitations on new coal production, and an "energy sales tax" rising to 15 percent by the end of the century...

...instead he compounds them...

...To start with, he chose as his chief of congressional liaison a minor Georgia bureaucrat, Frank Moore, who, to the best of anyone's knowledge, had never set foot in Washington except possibly on his high school senior class trip...

...Nor is Carter's FY 1979 budget encouraging, despite its accompanying rhetoric...

...From 1971 to 1974 he was head of the Ford Foundation's Energy Policy Project, which culminated in the publication of a book called A Time to Choose...

...This is not to say that Carter should have had any particular expertise in energy matters back in 1974...

...The American Spectator December 1978 7 This, then, was the program that Jimmy Carter seized upon soon after his inauguration as the chief weapon in his fight against unemployment...

...and a "lack of consistency and integration between the administration's two separate public service employment initiatives under CETA...

...Cyclical unemployment declines with a rise in aggregate demand (whether government-induced or not...

...The creation—by its proponents' own estimates—of 660,000 public service jobs, at a cost to the taxpayers of $9.4 million for each one of these low-paying positions...

...Carter attempted, with his vaunted engineer's cool intelligence, to analyze the causes of his signal lack of success after the first year in office, he would have come upon at least one important insight...

...Consider the following summary figures: 1978 (latest estimates) 1979 Carter proposals Budget authority $502.9 billions $568.2 billions Outlays $462.2 $500.2 To be sure, a good chunk of those proposed increases is due to inflation...

...But whether the Carter incompetence in this policy area is intellectual or political in origin, it is we who must pay for it...

...A word now about the last of these...

...and Jimmy Carter is going to have to call on all his fabled wit to figure out a way to exorcise that demon in order to avert either (a) a budgetary disaster of the first magnitude, or (b) a Kennedy challenge to his own renomination in 1980...

...And what makes his ignorance all the more dangerous are the related facts that he has no sense of how much he doesn't know, and that he has perfect confidence in his ability to unravel the greatest complexities with minimal outside assistance...

...Karl 0 'Lessker Carter: The First Two Years Is Jimmy Carter the "Dumb Ford" or the "Smart Harding "? Despite the Miracle at Camp David, there seems to be general agreement that Jimmy Carter is the most incompetent President since Benjamin Harrison and possibly since James Buchanan...

...Instead, as employers seek more and more workers to meet production targets, they choose to pay double and triple overtime in preference to hiring unskilled workers of uncertain work habits...

...Interested readers should consult Chapter Four of that work for details...

...Either explanation is horrifying to contemplate...

...And as if unsatisfied with his own shortcomings, he has recently begun to imitate those of his fallen predecessor, Richard Nixon...

...What is so dismaying is what all this reveals about the mind-set of the man, willing to accept as gospel truth an utterly one-sided interpretation of an extraordinarily complex set of problems, and apparently never imagining that he, as President, had any need or obligation to seek adversary views on any of it...

...But only bythat absurd measure can this budget be called "austere" or "restrained...

...Note, however, that the one really useful outcome of the first—civil service revisions allowing incompetents to be transferred or fired—was devised, not by Carter or any of his intimates, but by Alan Campbell, the new chairman of the Civil Service Commission...

...And state and local governments found it a modest bonanza in helping to cope with budget austerities caused by reduced revenues: They fired a number of employees on the regular payroll and rehired them immediately using CETA Title II and Title VI funds...

...How else are we to explain his newfound penchant for lugubrious self-congratulation on his own "courage," as when, in the purest Nixonian accents, he assures us that he will be taking great political risks by vetoing excessive spending bills coming out of Congress...

...Not even its most passionate advocates would argue that it has...

...In its first years (1974-1976) it served a useful—if exorbitantly expensive—countercyclical function, providing jobs for a small percentage of the people who were laid off during the sharp recession of those years...

...So the government will have just as much to spend on its pursuits...

...Surely not even the most untutored peanut farmer could fail to notice that there would be large economic consequences of a program that might impose as much as $80 billion in new taxes...

...And so it was that Ford's $2.8 billion for those titles in 1977 became Carter's $6.2 billion in 1979—with scarcely a dollar targeted on the structurally unemployed...

...A fast learner...

...In late October of this year, the President, having finally come to understand that inflation is a more pressing problem than unemployment, went on national television to unveil yet another in a series of grotesquely inappropriate plans to combat the erosion of the dollar...

...Just two weeks before the package was sent to Congress, the two were invited to sit down with the President and, in a four-hour session, managed to rein a few of the excesses of Energy Adviser Schlesinger's staff...

...A handful of minor triumphs, a sackful of minor defeats...

...The other is that he understands the problem, all right, but has caved in to organized labor's insistence on program designs that take little or no account of those who, if adequately trained, might become competitors to those who are already dues-paying union members...

...Far from proceeding along the essential (if we are ever to have a balanced budget) path of budget austerity laid down by the outgoing Ford administration, Carter requested a spending increase of almost $20 billion and an in-crease in budget authority (i.e., committed future spending) of almost $27 billion...

...The proper complaint, then, cf organized labor and its congressional and news media allies is that Carter has not proposed boosting federal spending fast enough to suit their champagne tastes...

...Surely something more than red-dirt stupidity is involved in a debacle of this magnitude...

...That not being possible, the predictable Carter-Rafshoon approach was to go on television with a statement of pious aspirations—and then blame everybody else when, as it must, inflation continues its inexorable upward climb...

...Do we even dare imagine what the decibel level of the response might have been if he had actually attempted to carry out his pledge to achieve a balanced budget by FY 1981, an attempt that necessarily would have entailed spending requests much closer to Ford's than to his own...

...Here, surely, is a degree of arrogance hardly paralleled in the history of the presidency...

...Even after his inauguration he continued to pledge a balanced budget by fiscal year 1981, and within three months of taking office he provided the nation with solid evidence of his intentions in the revisions he proposed (in April 1977) to his predecessor's budget requests for FY 1978...

...And where Ford had called for a total phaseout of public service employment by FY 1979, Carter requested (and Congress largely granted) an 8.2 percent increase over last year's allocation, bringing total CETA spending to $11.3 billion and outlays for just the public service employment titles of the act to $6.2 billion...

...The ludicrousness of this is obvious enough: Carter has asked for $33 billion more in actual outlays and almost $50 billion more in budget authority than the Ford administration projected for its FY 1979 targets...

...11, NO...

...All he knew about Congress was what he knew about the Georgia legislature—literally less than nothing, because he brought to his new job, not merely an absence of knowledge, but a truckful of gross misconceptions based on his Atlanta experience...

...Our severest difficulties lie in what is called structural unemployment— that is, people unable to find work because they have no skills to offer in the job market: the black teenage high school dropout is the clearest example...

...This one involved wage and price guidelines that were repudiated even before they were announced by most of labor and a large segment of industry...

...indeed there are severe shortages of skilled and semi-skilled labor in many parts of the country as 1978 draws to a close...

...Instead, this exercise in fiscal responsibility is to be accomplished by not cutting taxes as much as he had at first requested...

...By this measure he is an almost total, unredeemed failure...

...Nor could the response have been unexpected even in the White House...

...And so it was that after 20 months in office, in the late summer of 1978, Jimmy Carter finally succeeded in alienating his staunchest supporter in—and the most powerful member of—Congress, Speaker of the House Thomas P. O'Neill...

...That at least would be consistent with the Carter record of the first two years...

...What is more, he appears incapable of learning from his mistakes...

...But structural unemployment, in an age when the number of unskilled jobs has shrunk dramatically as a proportion of the total job market, is scarcely affected by a rise in aggregate demand...

...Karl O'Lessker, senior editor of The American Spectator, is professor of public and environmental affairs at Indiana University...

...The mortal problems of Carter's presidency are those of procedure and substance rather than public relations...

...Or is it possible that he had permitted himself to be persuaded by James Schlesinger that the economic impact wasn't really worth considering...

...But it is ludicrous to suppose that any of this constitutes rational motivation for seeking the presidency...

...It remains to be seen whether this blinding insight on Carter's part will lead to some more auspicious outcome than the open and active enmity of the Speaker of the House (as exemplified by his leading the fight to override the President's veto of the public works appropriations bill...

...Three great challenges, three great failures...

...The projected result...

...Thus, what Carter pro-posed last year was an increase in domestic spending commitments of nearly $30 billion—and all the while still prating about a balanced budget by FY 1981...

...One (again) is the President's appalling ignorance about matters he was elected to deal with and his apparent inability either to recognize his own ignorance or to seek wise counsel to help him through the darkness...

...Clearly, these are very different ills and require very different treatments...

...The Carters, Kennedys, Nixons, and Humphreys of this world are perfectly entitled to seek the highest prize in their chosen line of work and go after it by every available legal means...

...But even taking inflation into account and controlling for mandated increases in existing programs, the Carter budget still calls for almost $8 billion in brand-new outlays and almost $30 billion in brand-new budget authority, in just one year...

...But not only has Carter not acted in that fundamentally prudent fashion in energy and other major policy areas, he has refused even to con-template doing so...

...12 / DECEMBER 1978...

...Interalia...

...By reduced spending...

...The administration's version of the program (which Congress has clearly improved in its recently enacted reauthorization) is predicated upon a misconception of the nature of unemployment in America today...

...Has CETA done this...

...Has ever an American President compiled so dismal a record in his first two years in office...

...I have no idea whether he will succeed...

...But I can predict with a high degree of confidence that, if all he has learned from his first two years of combat with the Congress is that he has to "get tough" and veto more bills (always, of course, with Frank Moore as his point-man in the battle and with the deepening enmity of Speaker O'Neill), we can look forward to both a busted budget and a Kennedy on the ballot two years hence...

...8 The American Spectator December 1978...

...This means fatter pay envelopes for those who are already employed (and, incidentally, fuels inflation by raising the unit cost of production), but it does precious little for the young men and women in the ghetto...

...With a new Congress not markedly different in partisan character from the old, Jimmy Carter will once more have to figure out a way to win support for major, and very controversial, policy initiatives...

...Welfare reform and tax reform are carry-overs from the first biennium...

...For an object-lesson in how to turn a promising new presidency into a shambles, consider the ill-omened Carter energy plan...

...T he list of Carter failures in domestic policy could be greatly extended, but I have chosen to address only those three that, by common consent, transcend all others in importance: energy, unemployment, and inflation...

...Blumenthal and Mr...

...But the worst of it, in terms of policy process, is yet to be told...

...what makes it sinister is its role as a way-station on the road to S. David Freeman's "zero energy growth" society recounted in A Time to Choose...

...After running furiously for the office for almost four years prior to his 1960 election, Kennedy sat down with his advisors only after the election to figure out what his forthcoming administration ought to do...

...In Jimmy Carter's case, all accounts agree that the driving force behind his candidacy is best expressed in a phrase borrowed from a novel by Arthur Koestler: "After all, why not...

...We should like to think that it has something to do with strongly held policy or even philosophical views, but we find little warrant in history for thinking so...

...Because of the political imperatives: Carter had to do something, or at least had to go on record as having tried to do something,and the only thing that could have worked—a sharp reduction in the federal deficit—was simply not within the realm of the politically possible for a Democratic President confronting a Democratic Congress...

...And yet in that way, and only in that way, can this or any other administration hope to put a clamp on inflation (and, not coincidentally, stop the collapse of the dollar in foreign money markets...

...But it is important not to get sidetracked by questions of style...

...Rather, it is that there are well-established ways—for example, a quiet private meeting with the Speaker, explaining the situation and offering a less sensitive post to his client—of accomplishing the desired end that do not involve public humiliation of the President's most important ally in Congress...

...And this, let us note, in the context of a defense cut of almost $3 billion in budget authority...

...Hence the historic incompetence of his administration in its first two years...

...I am not being smart-alecky about this...

...Ford's $5.6 billion for CETA in FY 1977 became Carter's $9.6 billion in FY 1978...

...George and Joan Melloan, in their excellent book, The Carter Economy, offer a particularly revealing insight when they note that 6 The American Spectator December 1978 the energy package, which in reality was an enormous tax program, was not discussed with the [President's own] economic advisers until Mr...

...More ominous by far, the specter of national health insurance looms up on the legislative horizon, with the bloated, menacing figure of Senator Edward M. Kennedy enveloped in its shroud...

...program designs that "do not appear to be well targeted on the disadvantaged and structurally unemployed...

...Lacking these two institutional strengths, no presidency has even a prayer of winding up with a favorable balance sheet...

...Why then bother...

...And so it was that this program rejected energy development for energy conservation, rejected (contrary to Carter's explicit campaign pledge) a more free for a less free energy economy, and proposed extortionate new taxes and a huge new bureaucracy to tighten the government's strangle-hold on society...

...Yet it apparently never occurred to Carter to seek counsel from his top economic advisors...

...It is worth considering what that little tale tells us about Jimmy Carter's grasp of public policy and about his vaunted administrative talents...

...What is so appalling about it is the way it was put together—ignorance coupling with fanaticism in an act of conception as obscene as any-thing to be found in an adult book store...

...Had Mr...