Economic Policy: Changing Direction
"AS WE CELEBRATE our Bicentennial and the success of our Revolution," Alan Greenspan wrote in a memorandum to some of his White House colleagues in November 1975, "we need to do more than merely revel in our accomplishments. We should use this period to take stock of where we stand as a people, how we got here, and what we can learn from our past to guide us in the years ahead."
Greenspan later felt that the fundamental stocktaking he recommended had not been fully carried out. But the desire he expressed for a return to neglected basic principles underlay much of what the Ford administration set out to accomplish--particularly in the crucial area of economic policy.
The Nixon administration had generally approached economic policy on the assumption that the mixed public and private economic system developed by and since the New Deal was basically sound, though liable to abuse when liberals controlled the governmental machinery. For Nixon and his economic advisers, the economic problem was essentially one of administration: through conservative management, they believed, a mixed system could be made to operate with reasonable efficiency for the public good. (Not all members of Nixon's economic team were so sanguine. But those who believed that more fundamental change was needed usually felt constrained, either by internal administration pressure or by their assessments of current political realities, to play down their misgivings.)
The Ford administration, by contrast, proceeded on the conviction that the mixed economic system in the form it had reached by the