It's high time someone said a good word for high interest rates. Every Friday night on ''Wall Street Week'' on PBS, the panelists look gloomy and bemoan the fact that the stock market can't make a real recovery until interest rates come down. And the less said about bonds the better.
An epidemic of bankruptcies across the land and unemployment in the automobile and housing industries are cited as the evil results of an elevated prime rate.
Nobody, as far as I can detect, has suggested that high interest rates are the immutable consequence of certain fundamental principles of justice, a tendency for things to even out over the long pull. You only need to have reached senior citizen status, or to be a student of history to see it.
Two years ago high interest on our T-bill accounts helped pay for a new coat of paint on the outside of our house; last year it provided us with a 40th wedding anniversary cruise through the Panama Canal on the Love Boat, and this October it will take us to the South Seas.
Just as anxiously as Wall Streeters chart the Dow, we await the weekly auction at the US Treasury to see whether the trend in our interest income will be up or down, and, when it is down at a time when the sixth-month term of a T-bill account is about to expire, we swallow hard and hope for a reversal.
The reason why I think some elementary form of justice is at work in all this is that so many of us who have T-Bill accounts are survivors of the depression of the 1930s, and if young people today think they have it tough because they can't buy a $100,000 home, we can feel sorry for them while recalling that at least they needn't concern themselves over scrounging 50 cents for a good meal. It is true that the dollars we had then were worth much more than the ones we have now, but they were much harder to come by.
So, those of us who survived those times and were ultimately cast up in retirement on measly company pensions and social security are having our day on the proceeds of the money we were able to set aside during our productive years - despite the escalating raids by the tax people who practically wiped out the balance in the checking account every three months when the payment on the estimate came due.
Somebody in Washington thinks we depression survivors have been cheating in reporting our Volcker bonuses to the IRS, so the new tax bill in Congress provides that 10 percent will be deducted at the source. That isn't going to hurt the majority of honest ones among us, since the interest payers are already reporting our jackpots to the tax collectors. We might even throw our hats in the air if some language were added to limit the government's take to that amount and no more.
In the meantime, let Wall Street remain weak until such time as the brokers can show us that the Dow industrials can reward us as richly as T-Bill accounts and the money market funds. And don't blame unemployment in the auto industry on high interest rates. When this correspondent bought a 1980 Buick Skylark a couple of years ago, the dealer was paying 22 percent on the money he borrowed to fund his inventory and was eager to make a deal. One suspects that the US auto industry's troubles relate more to the fact that the automatic transmission required two complete overhauls in the first 10,000 miles, the second one after the one-year warranty had expired.
Hang in there, Mr. Volcker. Our house needs an interior paint job and some new drapes. Congress will do its part in keeping federal spending and borrowing high, but, if you weaken, every red-blooded senior citizen's dream of getting 15 percent interest on his savings will be lost for a generation.