Fresh from vacation, Cato observes with Horace, Dulce est dissipare in loco. Ronald Reagan might wish to echo that view, since he had the perfect locus for his refreshment, namely, The Ranch, and is obviously relaxed from his stay there. Back in Washington, the President seems fundamentally at ease with his economic program, notwithstanding a few passing jitters occasioned, we hear, by the prophecies of a passel of Wall Street Cassandras who base their predictions on the high interest rates. They are probably wrong, but Ronald Reagan should be doing a better job of pointing that out. Instead of simply calling for patience during this period of waiting, the President should be centerpiecing and floodlighting his biggest proven economic feat thus far: the January 27 deregulation of crude oil, and what that action has accomplished. So say a number of Washington political cognoscenti.
Eight months ago, before the President deregulated crude, the doomsayers were baying their disapproval and warnings. Now that the results are coming in, they have uniformly flip-flopped, including the learned Otto Eckstein. In this period, Americans have drastically curbed their demand for petroleum, oil imports are down 20 per cent, oil production is up, and the U.S. trade balance has improved (which in turn strengthens the dollar, which in turn brakes the inflation spiral). Further results: worldwide oil inventories are at a near-record high (a glut), the output of OPEC has dropped an astonishing 7 per cent this year alone, and the decline in oil reserves has been stemmed. Last January’s Cassandras notwithstanding, consumer costs have not gone up: gasoline and heating oil prices have leveled off at about the same rate as general inflation.
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