The Economy: Avoiding Overcure

The U.S. economy is facing its most perplexing situation of the fabulous 1960s. Production, profits and personal income are at record highs and still rising. Yet last week the auto industry, at least temporarily, cut back production because of disappointing sales, and the stock market shuddered through its worst fall since 1962. Amid these conflicting currents, Lyndon Johnson continued to ponder one of the toughest decisions of his presidency: whether to raise taxes to forestall the kind of inflation that would inevitably lead to a downturn later or to avoid a tax hike for fear that it would...