One of the most abrupt changes ever taken by those who seek to direct the U.S. economy's course occurred about 15 years ago under circumstances somewhat similar to those of today.
It was during the Gerald Ford's tenure, and inflation was on everyone's mind. The popular slogan of the day was "Whip Inflation Now."The campaign had an ignominious ending when the facts were realized - that the nation was stumbling into recession and that recession far more than inflation was the big threat.
It was not the first time the economic ship of state had been nearly driven onto the shoals, and it wasn't the last either. Many of America's recent presidents, from Herbert Hoover to Ronald Reagan, have been accused of erratic or even irresponsible steering.
But nothing quite matches the abrupt realization in 1974 that the economy was headed to recession while all eyes were on inflation. And now, some critics contend there could be a repeat of the scenario in 1989.
These critics cannot as yet demonstrate their thesithe U.S. economy you never really know.
When you flip the control buttons or turn the wheel a few degrees, for example, nothing seems to happen. A big ship doesn't turn on a dime; it takes time to observe a change. And when change comes, you cannot reverse it quickly.
In effect, gloomy analysts are saying that maybe too many buttons have been pushed already, and that while we haven't seen the effect so far, it is bound to show up in the next few months. Therefore, they say, beware of recession.
Adding conviction to their fears, or vice versa, is the uncanny coincidence of the same man being in the control room.
In 1974, as chairman of the President's Council of Economic Advisers, Alan Greenspan led the inflation fight. Today, as chairman of the Federal Reserve Board, he has given inflation priority over recession.
Few economists doubt Greenspan's knowledge, or that he is capable of absorbing wisdom from experience, but one of them, Eric Heinemann of Ladenburg, Thalmann & Co., a securities firm, offers this typical cautionary view:
"In sum, we think the economy is vulnerable. A slowdown, if not worse, is in the cards. Alan Greenspan's zeal to Whip Inflation Now is commendable. But let's hope he doesn't give us a replay of the crunch of 1974."
The question, says Heinemann, is whether Greenspan will get the mild slowdown he wants, "or will we go through something more sinister?"
In short, will the economy scrape bottom and continue on its way? Or will it run aground, spring a leak and spill its energy like the Exxon Valdez?