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One of Miller's advantages in fighting inflation is that the battle has become Topic A for consumer and Cabinet officer alike. As recently as March 8, when Miller was sworn in, Government policy was still focused on stimulating the economy to faster growth in order to bring down unemployment. That goal has been achieved, at an inflationary price; the jobless rate in June fell to a four-year low of 5.7%. Now the talk in Washington and the country is all of tight budgets, spending hold-downs and the long effort needed to bring prices under control.
Miller himself has done enough to produce this switch to make businessmen and bankers look on him as the white hat in a kind of financial western: the new gun who arrived in Washington to rally the citizenry against the enemy, much as the Texas Rangers rode in to restore law-and-order in the Borger of his youth. He quickly put the Fed on a course of raising interest rates sharply, to hold back the inflationary growth of money supply and to keep dollars at home. In private debates and public remarks, Miller has pleaded with the White House, of which he is independent, to launch a determined anti-inflationary policy of its own. Neither his actions nor his words differed greatly from those of his predecessor, Arthur Burns. But while Burns' pontificating only annoyed the White House, Miller's unpretentious yet urgent advocacy has had a marked effect.
Shortly after taking office, Miller asserted openly that Carter should declare inflation to be the nation's No. 1 economic problem. The President did, a month later. Miller publicly advised Carter to delay the $25 billion tax cut that the President had proposed to take effect Oct. 1, and to shrink the budget deficit. Carter has agreed to make the tax reduction effective Jan. 1, and to squeeze it down to $15 billion. That and other actions, according to Administration forecasts announced last week, are supposed to lower the budget deficit for fiscal 1979 from the $60.6 billion that Carter had recommended in January to $48.5 billion, which is closely in line with Miller's goals.
In Washington, Miller is widely regarded as one of the best appointments that Carter has made. Private bankers commonly echo Milton W. Hudson, vice president of Manhattan's Morgan Guaranty Trust Co., who says Miller has put on "a virtuoso performance." Foreign leaders agree. Typically, West German Chancellor Helmut Schmidt, who has long railed at Washington for failing to appreciate the dangers of the dollar's slide, feels that he has at last found a firm ally in Miller.
This is not to say that Miller will succeed. He and Carter are engaged in the trickiest and riskiest of all economic maneuvers: an attempt to slow a surging but vulnerable economy just enough so that inflation gradually subsides, but not so much as to sink the nation into a recession. Administration officials refer to this as guiding the economy to a "soft landing" from its too-rapid pace in the quarter just ended. Estimates of production growth in the second quarter cluster around an annual rate of 9%. Miller prefers to talk of reaching a "sustainable path of growth" of about 4% that can be followed year in, year out without either accelerating inflation or raising joblessness. A 3% rate, he says, would mean more unemployment, a 5% growth bad inflation.