The Week

■ The current Administration has given a new meaning to the term “unimpeachable source.”

■ Unemployment averaged 5.64 per cent in the 16 months of Phases I & II, compared to 5.68 per cent in the 16 months before controls. In October, the unemployment rate finally dropped sharply to 4.5 per cent, though, for the purpose of excusing deficits, “full employment” is still defined as a 4 per cent rate. There is supposedly a tight relationship between rising inflation and declining unemployment (the “Phillips Curve”), yet the unemployment rate has dropped by only 1 per cent in the past year, while the annual rate of inflation of consumer prices rose from about 3.5 to 10 per cent. Inflation is no lasting cure for unemployment, since it works only by temporarily fooling people into accepting lower real wages and interest earnings, and by making alternatives to labor income (welfare, unemployment benefits) less attractive. The only lasting solution is to improve the relative attractiveness of work versus leisure, and to eliminate such institutional barriers to employment as minimum wage laws, union restrictions, and most occupational licensing.

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William F. Buckley Jr.

National Review

Ronald Reagan

■ The current Administration has given a new meaning to the term “unimpeachable source.”

■ Unemployment averaged 5.64 per cent in the 16 months of Phases I & II, compared to 5.68 per cent in the 16 months before controls. In October, the unemployment rate finally dropped sharply to 4.5 per cent, though, for the purpose of excusing deficits, “full employment” is still defined as a 4 per cent rate. There is supposedly a tight relationship between rising inflation and declining unemployment (the “Phillips Curve”), yet the unemployment rate has dropped by only 1 per cent in the past year, while the annual rate of inflation of consumer prices rose from about 3.5 to 10 per cent. Inflation is no lasting cure for unemployment, since it works only by temporarily fooling people into accepting lower real wages and interest earnings, and by making alternatives to labor income (welfare, unemployment benefits) less attractive. The only lasting solution is to improve the relative attractiveness of work versus leisure, and to eliminate such institutional barriers to employment as minimum wage laws, union restrictions, and most occupational licensing.