The Report of the is of necessity a somewhat schizophrenic document. This is so because the Employment Act of 1946 (which called it into being) ordains that it seek to serve two purposes that are not entirely compatible. On the one hand, it is an apology for the President's economic program, prepared by the and a Council of Advisers appointed by him for no fixed term. In this role, it seeks to show that the economic policies of the and his party will be successful (and, if the incumbent president has already been in office for a year or more, have already begun to be successful) in solving the grievous problems created by the foolish mistakes made by the other party when it was last in power. On the other hand, it is a professional economic report on the American economy and related public policy, prepared by three leading professional economists. These three economic advisers are chosen from among those who have devoted their previous careers (and will in all likelihood devote their subsequent careers) primarily to teaching and/or research in economics. In this role, the Report seeks to present to the Congress and the public an analysis that is competent by the standards of the economics profession, describing and assessing the present state of the American economy, how it came to be the way it is, and how it can and cannot be changed by public policy especially at the federal level. I believe this schizophrenia is unavoidable, unless the rules are changed either so that the has no professional economists as advisers, or so that an independent body of professional economists is constituted and charged with issuing reports on the economy and public policy without being responsible to any elected official. Neither of these changes in the rules would be desirable. The first would deprive the President, the Congress, and the public of the competence and discipline offered by professional economic standards. The second would divorce the President's economic advice from the different but equally important discipline of the political arena. The 1973 Report, like its predecessors from 1949 onwards, consists of three very different components. The first is the Economic Report of the President proper, addressed to the Congress and signed by the President. Mr. Nixon's 1973 report, like his 1972 report, is just 5 pages long. The second is the Annual Report of the Council of Advisers, addressed to the and signed by the Council. The 1973 version, by Herbert Stein, chairman, Ezra Solomon, and Marina v.N. Whitman, is 174 pages long, including two appendices. It is in this second part that the schizophrenia is most evident. The third is a statistical Appendix, con* The Johns Hopkins University. I am indebted to my colleagues, Louis Maccini and Jurg Niehans, for valuable comments on an earlier draft, and to Mary Anne Matthews for drawing Figure 1.

T HE Report of the Commission on Money and Credit' makes many excellent recommendations, particularly in the area of banking and financial institutions and monetary and fiscal policy. It is weak in some areas, particularly in the international sphere. This review consists mainly of a summary of some of the most important recommendations of the CMC (Section III), and an evaluation of them (Section IV). The first two sections discuss, respectively, the background and general nature of the CMC Report, and the policy goals stated by the CMC.