Maverick Economist Alfred Kahn has a penchant for candor that is both refreshing and dangerous in Washington. When he said that there is the possibility of a "deep, deep depression" if inflation continues to soar, the President was furious. Kahn responded by purging the word depression from his vocabulary and instead using "banana." So he now says: "We're in danger of having the worst banana in 45 years."
Kahn never lets an opportunity for a quip pass him by. Commenting on the success of his profession, he gibes: "The Pope is telling economist jokes." Asked why he accepted the thankless job of trying to throttle inflation, he replies: "I'm 61 years old. What am I saving it for?" He is brutally frank about his chances for success. Says he: "My prediction [on the growth of the economy] isn't worth the air it rides on."
Quite a few officials are finding Kahn's abrasive forthrightness more than a little unsettling. Like the circus elephant that favors the crowd with his antics, he needs a small army of men to come around after the performance and clean up the mess. Last week, under pressure from the White House, Kahn had to retract his airy statement that Arab oil producers are "shnooks."
His faux pas aside, many feel that Kahn has Achilles' heels on both feet. He lacks two major instruments of bureaucratic strength: an operational staff and a power base. When he went to Carter with a request for four assistants, he was initially refused permission to hire anyone. Last week the President approved the staffing request, but told Kahn to try to nab some spare bodies from other agencies. Enormously successful in piloting the airline deregulation drive while he was head of the Civil Aeronautics Board, Kahn finds his new job much tougher because he does not have the force of any tangible organization to back him up. Reports TIME Washington Economic Correspondent George Taber: "Economic policy under Carter has been very confused, and adding Kahn to the kitchen has made things worse. Kahn has a distinct disadvantage: he is not responsible for any single area, like the budget or regulation or economic projections. Everything that he wants to do will depend on the willingness of some other agency or department chief to go along."
The problems of little staff and no turf are compounded because Kahn does not want to serve as the Administration's major jawboner or supervise the day-to-day monitoring of wages and prices. He prefers to leave the handling of 7% wage guidelines and the figuring out of profit margins to Barry Bosworth, the Council on Wage and Price Stability director, another academic who is temperamentally unsuited for the job. Instead, Kahn sees his role as an inflation ombudsman. He says that he wants to restrain Government activities that foster inflation. Kahn plans on cutting regulation, loosening up building codes, freeing land use and promoting more competition among public utilities.