Reaganomics 'a gimmick'

With the newspapers stuffed and the telly jammed with last-minute surveys, polls, meditations and guesses about next Tuesday's congressional elections, I think this is a good time to remember a splendid postcard sent to me by an old English lady years ago in the autumn of a presidential election year. 'Instead of telling us who might win in November,' she wrote, 'would it not be better to wait and tell us who did win?' It would be better.

However, I must tell you about an incident which would have been red meat to Charles Dickens or Evelyn Waugh which would terrify everybody who has ever helped in boosting a political candidate and which will bring wicked joy to the rest of us who are finally exhausted by the trickery and the blatant simplifications of the 30-second political commercials with which every candidate, who can afford their shocking price, is peppering our television screens.

On the eve of an election, there comes a moment to every candidate and his advisers, a moment of fatigue tinged with anxiety, when they all pray for some last-minute revelation, scandal which will swing things their way. You don't have to be very old to remember or have read about the Zinoviev letter, a letter supposedly written by a Russian Bolshevik giving secret instructions to British Communists which was published in the British press before the election of 1924. The letter was a fake but nobody was sure of it till it was too late. It succeeded in throwing out the first Labour government.

This weekend, there will undoubtedly be a spate of planted rumours around the country accusing candidates of every sort of unrevealed shenanigan. The White House, we must believe, is above such knavery but it must have been a great moment in the White House last week when suddenly it was announced that the Nobel Prize for economics had been awarded to a professor at the University of Chicago, one George J. Stigler.

Now, consider what the president and his economic advisers must have been pondering when this word came in. Another 680,000 in one week signed up for unemployment benefits, a parade of economists before Congress's joint economic committee was testifying either that the economy is in stagnation or that it would get worse or that there'd be only the most excruciatingly slow recovery throughout 1983, maybe 1984 and 5. The president kept pointing with dizzy smiles to graphs showing inflation plummeting, interest rates dropping – now, even mortgages for private housing beginning to go down!

This last item, which affects so many millions of young people who would dearly like to own a home of their own, this was taken to be really positive proof that Mr Reagan's economics – Reaganomics – is working at last. Since the election is generally taken to be a referendum on Reaganomics, the White House wasted no time celebrating this news in a well-publicised ceremony. They called to the White House some leaders of small business. Bankruptcies of small businesses are running at a rate worse than anything known since the Great Depression of 50 years ago. These men and women shuffled obediently into the White House and presented the president with a doll's house marked 'Sold' and you may be sure that is was shown in triumphant close-up on the networks' evening television news.

Well, now to go back to the moment when the announcement of the Nobel Prize for economics appeared like a beacon amid the encircling gloom. Why? Well, Professor George Stigler is a conservative economist but not, somebody in the White House should have noticed, not an ideologue. Talking about Dr Milton Friedman, the last university of Chicago economist to win the Nobel Prize, Professor Stigler said, 'Milton has the answers to how the world ought to be, I'm interested in finding out how it is.'

Still, Professor Stigler has had, in the past, kind words for Reaganomics. He said openly that the war against inflation is a remarkable success. What a boon and a blessing to have the beloved Swedes, on the eve of the election, choose Professor Stigler to honour above all the world's economists! So the White House rushed an invitation to him to come and be congratulated by the president and to have the rare privilege of saying his say before the White House press corps, which was hastily assembled for this emergency injection of good hope.

There were several other things about the character, the whimsical character, of Mr Stigler which the White House had not checked on. He has a brand of offhand sarcasm and a waggish wit which makes him a popular teacher. He's unpredictable in answers to questions. He is, in fact – a friend paid him the best compliment – 'a freewheeling intelligence'. Now, if they'd known this, the White House staff would certainly have jerked at the reins of their enthusiasm. Freewheeling intelligence is just what the doctor ordered during a war, in a crisis when you can't see the way out and in fact, in day-to-day government, but it's a treacherous thing to let loose on the eve of an election where the freewheeler must go into the ideological gear that the party has prescribed.

Well, Mr Stigler came to the White House, was ushered before a lectern, the White House press correspondents gave him the rare tribute of a hand clap and the president's staff men, all smiles, retired to the wings.

'Now sir, how do you feel about the state of the economy?' 'Well,' he said, 'I want to see what's going to happen in the next two years. I think we're bumping along and we're on our way up.' The White House aides purred quietly. He hoped, he said, that sooner or later, but he didn't know when, we'd pull out of 'the depression' – panic in the wings, President Reagan writhes at any repetition of the word 'recession' but the word 'depression' is as unforgivable as the word 'cancer' at a Victorian tea party. But the professor had used the word. Did he really mean it, he was asked?

'Well,' he freewheeled, 'I think that's linguistics. I'm so old now that I remember depressions. I know they're not polite and I think they're not to be spoken about within the city limits of Washington DC...' – the press corps scribbled fast and the aides in the wings suppressed their groans – '... I don't mind changing words', the genial professor went on. But the reporters came back at him hoarsely crying, 'No, no! No! Depression is just fine!'

After this appalling opening, the White House aides started glaring at their watches and believing that the professor had a pressing appointment and had better be on his way. He was quite relaxed. 'How about Reaganomics, the president's supply-side economics, the theory with which Mr Reagan, in a final flurry of weekend campaigning, is begging everybody to stay the course?'

'As I understand it', said Professor Stigler, 'it's not an orthodox economic category. It's a gimmick, or if you wish, a slogan that was used to package certain ideas.' Before he could take it back, the reporters were scribbling 'gimmick, slogan'. Sensing their evil delight and catching the whiff of smelling salts from the wings, Professor Stigler felt indulgent, 'That's all right!' he said, 'I think sloganeering is one of the larger products of this town. Seriously though,' he said – always a word which suggests that you were kidding when you planted a stiletto between a man's shoulder blades – 'seriously, the supply-siders had put a crimp in unnecessary government regulation, they'd cut taxes BUT they'd gone too far in making bigger boasts of success.'

Well, by this time, the White House aides were fidgeting to get the man off the stage and back to Chicago before he performed any more disastrous freewheeling. All right! One more question! Some villain dared to ask if the current depression was the worst since the Great Depression.

'Er...', said the professor, 'I think in terms of magnitude it is. It bears the striking similarity of a high rate of unemployed and a low level of private investment in basic manufacturing.' Both these dread symptoms are ones which also the president hates to dwell on. There was nothing more to do than break in on the performance, the White House men came with arms outstretched, silently pleading with him to have done and say goodbye and be off to Chicago or any other place he could get lost. The press couldn't bear to have him leave, 'No, no! Come back little Sheba!' He laughed and waved.

'Do you enjoy visiting Washington?' somebody managed to get in. 'Oh, I love it!' he said. You can imagine that this astounding performance, like that of a turning worm in an old Frank Capra movie, is one that has been noted by every Democratic candidate in the country. There must have been some frantic rewriting of election-eve speeches. From coast to coast, I can hear Democrats, before huge audiences, saying, 'Don't take my word for it, the Nobel Prize winner in economics said it at the invitation of the White House, that we are in the worst depression since the Great Depression, that Reaganomics is a gimmick.'

It must be almost a relief for devote Republicans to turn from the election to the sinister, if non-political, story of Tylenol, the painkiller, which caused seven sudden deaths in Chicago, a week or two ago, in people who'd bought the drug, in its capsule form, in bottles whose seal had been tampered with. The capsules had been laced with cyanide. It's been a colossal blow to the manufacturer who pointed out that it's impossible to lace the tablet form with any foreign body but they've had to withdraw from the whole country every bottle containing the capsules.

As I talk, the police and – since this missing criminal could have crossed the state border – hundreds of FBI agents have been trying to track him or her down. No doubt, in the days before television, the horror would have stayed frozen in one place, with one drug but, as we've noticed before, mad men pick up shortcuts to fame or notoriety from the tube and soon there were rumours and reports of other tamperings with other drugs in other places, so much so that the United States Department of Health warned parents to check this Sunday night the treats, the candies, that small children might receive in lieu of performing a Halloween trick. There is the hazard of razor blades in apples, cookies laced with LSD, pins in candy bars.

Some towns have got out hasty ordinances forbidding door-to-door trick or treating. It's a mad, mad world, my masters, and, quite seriously, a cheerful, healthy child on Monday morning will come as a vast relief to millions of American parents.

This transcript was typed from a recording of the original BBC broadcast (© BBC) and not copied from an original script. Because of the risk of mishearing, the BBC cannot vouch for its complete accuracy.

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