LETTER FROM WASHINGTON

As ’72 creeps closer, the economic issue refuses to fade away. The White House continues to drop pregnant little hints about wage and price “restraints,” but no one really believes the Administration is seriously considering controls. Controls are anathema to the Council of Economic Advisers, and a hands-off policy has long been one of the Administration’s credos. Furthermore, wage-price controls would be neither enforceable nor effective.

“There’s very little the President can do,” says one source close to the Council of Economic Advisers and the Treasury Department. “Either you have a stringently drawn-up set of restraints backed by Congress or you do nothing. The power of persuasion is much overrated.” The comparison to the “persuasive” wage-price policy of former British Prime Minister Harold Wilson is inescapable: Wilson failed to hold down inflation even with a blue-ribbon panel to vet wage and price hikes.

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As ’72 creeps closer, the economic issue refuses to fade away. The White House continues to drop pregnant little hints about wage and price “restraints,” but no one really believes the Administration is seriously considering controls. Controls are anathema to the Council of Economic Advisers, and a hands-off policy has long been one of the Administration’s credos. Furthermore, wage-price controls would be neither enforceable nor effective.

“There’s very little the President can do,” says one source close to the Council of Economic Advisers and the Treasury Department. “Either you have a stringently drawn-up set of restraints backed by Congress or you do nothing. The power of persuasion is much overrated.” The comparison to the “persuasive” wage-price policy of former British Prime Minister Harold Wilson is inescapable: Wilson failed to hold down inflation even with a blue-ribbon panel to vet wage and price hikes.