Business: Trying Anew to Bash Inflation

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As prices soar out of control Carter searches for new economic ideas

"It's really scary. This inflation thing is frightening because we do not know what causes it, or what to do about it. The economists go to their computers, plug in the data,' and out comes information that says that nothing like this should be happening. It's very, very scary stuff."

Rattled ruminations of an inflation-dazed economist? Hardly. The grim statement, a shockingly frank assessment of the price explosion that is menacing the U.S., comes from a senior official of Jimmy Carter's Administration. Moreover, it accurately reflects the drift and disarray that have characterized the Administration's economic policy over the past three years. As Federal Reserve Chairman Paul Volcker and Treasury Secretary G. William Miller fiddle with the depressing statistics, Carter seems able to do little more than cast his eyes heavenward. Meanwhile, a frantic search for another new anti-inflation program, which could be announced as early as this week, is under way.

Though he came to office with inflation at less than 5% and the economy growing briskly, Carter has presided over economic and financial turmoil that has nearly tripled the rise in consumer prices, flattened growth, ballooned the federal debt and pushed interest rates to their highest levels in the nation's history. Last week the rate banks charge their best corporate customers rose a quarter-point to 16.75%. The so-called leading economic indicators, which seek to portend future business trends, fell in January, the fourth consecutive monthly decline. Many economists regard this as a sign that the nation is near a recession.

The renewed upward thrust of inflation was pushing the topsy-turvy economy stage center as the public's biggest single concern. With the 1980 presidential campaign now in high gear, the question of what to do about the nation's worsening economic malaise is fast becoming the key election issue. Complains Houston Housewife Betsy Clark, 48: "I don't think there's a candidate running, including the President, who can handle inflation. My family is fighting high prices by putting off major house improvements and putting our money into art and antiques instead."

All across the land, the call has gone out to "do something, do anything" to slow runaway prices. Democratic Presidential Challenger Edward Kennedy continues taunting Carter to come out and debate the Massachusetts Senator's recommendation for mandatory wage and price controls. On Wall Street, respected Investment Banker Felix Rohatyn last week called for a yearlong wage and price freeze and other inflation-fighting measures to stop "a slide toward national bankruptcy." Even in normally free-spending Congress, cries went up to fight inflation by slashing budgets. A bipartisan group of 44 Senators signed a petition calling for $26 billion in spending cuts next year.

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