Finally! Economic Nirvana

Finally! Economic Nirvana

Finally! Economic Nirvana

Gossip, speculation, and scuttlebutt about politics.
Nov. 29 1998 3:07 PM

Finally! Economic Nirvana

Where are the ticker-tape parades, the patriotic speeches, the red-white-and-blue fireworks, and the photographs of beautiful women embracing exuberant economists in Times Square? It was bad enough that the tongue-tied Bush administration failed to celebrate the end of the Cold War. But Chatterbox is baffled by the near silence that has accompanied the achievement of domestic paradise. Only a stray item in Friday's Wall Street Journal notes that after 20 years America has finally achieved the pie-in-the-sky economic goals mandated by the Humphrey-Hawkins bill.

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It wasn't too long ago that Humphrey-Hawkins was a synonym for mushy-headed, ignorant-of-economic-laws liberalism. Passed in 1978, as a memorial tribute to the liberal icon whom Jimmy Carter once called "Hubert Horatio Hornblower," Humphrey-Hawkins decreed that the goal of economic policy was full employment (defined as a 4-percent jobless rate), a balanced budget, and minimal inflation. Like so many feel-good congressional resolutions, Humphrey-Hawkins had everything but a trigger mechanism. Long before Carter left office, he was fast retreating from this Pollyannaish policy mandate. Carter's 1981 budget, written at a time of 6.2 percent joblessness and 13.3 percent inflation, pushed the targets back to 1985 for full employment and 1988 for stable prices.

But even though it was toothless, Humphrey-Hawkins inspired splenetic Republican attacks. Ronald Reagan called it "a design for fascism." Orrin Hatch led an unsuccessful Senate filibuster against the bill. Business Week editorialized that the legislation, so watered down that even the AFL-CIO turned against it, still carried with it "the danger of leading people to expect more from government than government can deliver."

Chatterbox, who back in those days was a speechwriter for Labor Secretary Ray Marshall, recalls the derision that accompanied the symbolic platitudes of Humphrey-Hawkins. Among administration policy-makers, Marshall was virtually alone in his belief that full employment was attainable somewhere in the distant future. Twenty years later, Marshall, along with House sponsor Augustus Hawkins, can take belated comfort in the knowledge that they were right.

--Walter Shapiro