STATE OF BUSINESS: The Great Question

The plateau position of the U.S. economy is a subject of discussion and debate not only in the U.S. but around the world. The big question: Will the U.S. slide into a recession or take off on another rise?

London's Economist led the field in concern for the health of the patient. In an article called "Recession Round the Corner?" it reported that "Government officials in Washington are beginning to ask themselves privately whether a recession is in the making. A number of businessmen and responsible economists think that a decline is already under way."

The Economist's view raised the ire of Raymond Saulnier, chief economic adviser to the President, who wondered whether any "Government economists" feel as the Economist reported. He, for one, sees no recession in the near future. Said Saulnier: "Bear in mind that the U.S. economy is operating at a very high level, whether measured by employment, by production or by the aggregate of income payments. Furthermore, there are strong forces at work that favor further advances : the greater availability and lower cost of credit, high and rising incomes, a high level of retail sales, and—by no means the least—stable prices."

"The Disappearing Boom." But the Economist was not alone in its concerned view from abroad. The French financial weekly, La Vie Française, lamented that "for more than a year, it has been evident that a real 'boom' in the American economy is impossible." The London Financial Times predicted that "this year seems fated to go down in history as the year of the disappearing boom." Giro Koike, senior managing director of Japan's Yamaichi Securities Co., said that many leaders of Japanese industry, who are watching the U.S. economy, feel that the U.S. has entered a definite plateau and may be in for a period of readjustment.

Along with their concern that the U.S. economy's performance is not up to par. many European businessmen also worried about economic conditions in their own front yard. Says Cristiano Garaguso, chief of the Rome office of 24 Hours, Italy's most authoritative financial daily: "There may be a light U.S. recession next year, but it won't be long or serious. I am much more worried about the overexpansion of capital and overoptimism in Europe."