Biting the Bullet


President Reagan has a clear opportunity to seize the initiative in his first 100 days in office. If he does so, he can turn this country around, restoring the vitality of its economy and the confidence of its people. If he temporizes, even for a few months, then "politics as usual" will take over and the opportunity will be gone. The nation's problems—soaring inflation, decaying industry, bloated bureaucracy—are so severe that the first course, however difficult, offers the only way out. Herewith, then, our suggestions for the first 100 days, some possible by direct executive action, some requiring firm pressure on Congress.

In energy, restore the free market now. This country is dangerously dependent on the whims of Middle Eastern dictators and fanatics because of our dependence on foreign oil and because of the vast array of federal controls that prevents the marketplace from allocating gasoline where it's needed during shortages and that actually forbids the substitution of domestic natural gas for imported oil. The whole business—oil and natural gas price controls and the entire petroleum allocation system—should be abolished at once. So should the federal Synthetic Fuels Corporation, before it becomes even more entrenched. That, in turn, would remove the "need" for the "windfall profits" tax, sure to be fought over later in the year. These moves would, over the next several years, substantially reduce our dependence on oil imports.

To reindustrialize, end the war on business. George Will told a monetary conference last fall that any government which subsidizes its Chryslers while breaking up its IBMs has serious problems. Just so. Letting Chrysler expire would send a vital message to American industry: there will be no more bailouts. At the same time, it is vital that our antitrust laws be vastly cut back or abolished; even left-wing economists like Lester Thurow can see the harm that these laws do to the competitiveness of US industry in the world arena. As a first step, President Reagan could drop the current cases aimed at breaking up IBM and AT&T. Like the Chrysler bankruptcy, the move would have great symbolic value, putting the world on notice that American productivity will once again be a force to be reckoned with.

The president should also make clear that there will be no more tariffs, quotas, or "orderly marketing agreements" and that he will work to phase out those that exist. If Chile and Argentina can come around to free trade, why can't we? At the same time, however, a plethora of regulatory burdens can be lifted, many by Reagan himself, so that industries can devote their attention to serving their customers. The auto industry, in particular, should be freed of "passive restraint" regulations and additional safety and emission requirements, which promise only marginal improvements at a high cost. Further, decontrolled gasoline prices would spur lagging sales of Detroit's new high-mileage cars.

On government spending, gore everyone's ox. There is simply no way to balance the federal budget, let alone cut back on government, if sacred cows are allowed to exist. A new form of log-rolling is required in Congress: "You support cuts in my program, and I'll support cuts in yours." Intelligent hit-lists abound. The Heritage Foundation's Agenda for Progress details $58.6 billion in domestic spending cuts; Libertarian Ed Clark's White Paper on Taxing and Spending Reduction offered a more drastic (but quite defensible) $150 billion agenda. Among the obvious targets for elimination are such pork barrels as the Export-Import Bank, the Space Shuttle (privatize it), EPA grants for sewage treatment plants, HUD and EDA economic development grants, Army Corps of Engineers waterway projects (try user charges), UMTA mass transit grants, Amtrak subsidies, and the CETA program. There would be weeping and wailing and gnashing of teeth, but if the sacred cows are all butchered at once, the special interests will lose their traditional clout, and for once the taxpayers can have a barbecue.

Finally, on defense, be willing to make tough choices. As we have said repeatedly in these pages, while many defense deficiencies must be repaired, that is no reason to give the Pentagon a blank check. Defense Secretary "Cap the Knife" Weinberger and OMB director David Stockman must insist on clear definition of strategic objectives and pursuit of cost effectiveness. Taxpayers cannot afford both a B-1 derivative and a Stealth bomber; accelerated MX and Trident II and Minuteman upgrading. (Our own choice would be to scrap MX, letting the Air Force have cruise missiles and its choice of bomber, while going all-out to develop laser ABM weapons.)

At the tactical level, a free-market energy policy cuts the props out from under any case for a Rapid Deployment Force to seize Middle East oil fields (which is what it's designed for). Scrapping the RDF would relieve the fears of Persian Gulf governments, and the money could be used to rebuild inventories of spare parts and ammunition and to increase military pay to the levels needed to ensure retention of skilled technical personnel. That would also enable Mr. Reagan to make good on his promise not to restore the draft.

The temptation to go slow, to get along, to be "realistic," will be immense. It is vital that Mr. Reagan resist it. If ever there was a time for strong, principled leadership, it is now. If this opportunity to cut back on government and revitalize the private sector is muffed, then the road to serfdom is all that lies ahead.