Trying to Build Confidence

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by cutting their taxes. The President, who in October scared the wits out of many executives by thundering that Big Oil wanted to "rip off' the people, sprinkled his State of the Union message and economic report with flattering references to private business as the great provider of income and jobs. Blumenthal expounds on the point: "Business investment, which has been too low, is the key not only to keeping the economy going, but also the key to fighting inflation." His reasoning: if companies do not build, expand and modernize factories, production bottlenecks and shortages will develop as the economy expands, and price increases will speed up.

But convincing executives that the Administration now loves them and wants to help them will take a hard selling job by Carter. The Administration's priorities, while clear enough, are emphatically not those that businessmen would select. Most executives are frightened by inflation, fear that it may bring an end to the expansion in a year or two despite Carter's tax cuts, and think the President should crack down on it by cutting federal spending and the budget deficit more than he intends. Businessmen and economists, like Murray Weidenbaum, a member of the TIME Board of Economists, consider his anti-inflation program "a puffball," and fear that the Administration is not yet sufficiently aware of how damaging a further decline in the value of the dollar could be.

Initial reaction to the State of the Union speech—about the only pronouncement that businessmen had time to digest last week—indicates that Carter made a small start toward soothing business anxiety but has a very long way to go. Said John Wilson, an economist at California's Bank of America, the nation's largest: "I think he demonstrated he has a good grasp of short-term and long-term economic problems, and he presented a balanced package." J. Sidney Webb, executive vice president of TRW Electronics in Los Angeles, thought Carter sounded "more like a conservative Republican than a conservative Democrat. I'm not sure he can do all the things he says, but in general I liked the speech."

But the favorable responses were outweighed by skeptical or negative ones. Richard Peterson, senior vice president of Continental Illinois National Bank, complained that "there was nothing to help solve our rate of inflation." Joseph Lanterman, chairman of Chicago's Amsted Industries, manufacturers of railroad and industrial components, asserted that "Carter has not removed any of the uncertainties that plague the economy." Irving Seaman, chairman of Sears Bank and Trust in Chicago, called Carter's address "a bland, nothing speech. I'm even more apprehensive about the economy than before."

Throughout such comments runs a strange paradox: many executives profess faith in the strength of business in one breath, then voice grave worry about Carter's economic management in the next. Says John P. Thompson, chairman of Southland Corp., an operator and franchiser of convenience food stores that has its headquarters in Dallas: "I think 1978 will be a good year. It is starting off at a higher clip than 1977." Simultaneously, he grouses: "I think the business community to a man reflects the uncertainty he [Carter] has projected." A