A Blow to the Welfare State: Carter’s Policies and the “Political Business Cycle”

A Blow to the Welfare State: Carter’s Policies and the “Political Business Cycle”

The Carter administration, with the support of key congressional committees, has deliberately fostered recession and unemployment, and has steadily curtailed expenditures for human services. Thereby the pattern of “political business cycles,” previously associated with Republican administrations, continues. While the circumstances of the present cycle differ, in some respects radically, from earlier ones, what is new about the economic policy is mainly a difference in political coloration. The leading actors who formulate economic policy—the secretary of the Treasury, the chairman of the Federal Reserve Board, the head of the Office of Management and Budget—have in all Democratic administrations since 1960 been of the same stamp as their Republican confreres.

The Joint Economic Committee of Congress, with its perennial Democratic majority, has so decisively moved toward supporting the interest of capital—disguised as “supply economics”—that its Republican minority found it unnecessary, for the first time in some 20 years, to file a minority report in 1979 and 1980. Pressure to balance the budget manifests a “fundamental realignment,” a “major political shift,” the l...