The Establishment Shows its Hand

The more thoughtful leaders of the American establishment realize that serious economic problems will be inherited from the Reagan administration. These include enormous budget and balance-of-trade deficits; a banking structure weakened by deregulation and vast indebtedness not only of developing countries, but of such key economic sectors as agriculture, real estate, and petroleum; and the still unascertainable aftereffects of the stock market crash.

The foremost spokesman for the business establishment has been Paul Volcker, former chairman of the Federal Reserve Board, who in the early 1980s used his powers to reduce employment, income, and the nation’s productive potential in order to subdue inflation, which he largely i...