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Poor President Bush. The Federal Reserve apparently has decided to destroy his budget with high interest rates and slow growth and knock his presidency off a cliff, and Bush is bubbling over with apologies for the Fed.

To shield the Federal Reserve from the growing concern about rising interest rates, Bush recently pointed his finger at the deficit: "The best thing to do about interest rates is to get a budget agreement."Where are the president's economic advisers? There's not enough evidence that deficits cause high interest rates to clothe this theory in a G-string.

By blaming high interest rates on the deficit, the White House thinks it is putting pressure on Congress for a budget agreement. Perhaps it is, but it is also providing cover for Federal Reserve chairman Alan Greenspan in the event his tight monetary policy knocks the economy off course.

In a word, the White House is setting up the Bush administration for failure.

Thanks to its own timidity, the Republican Party has placed the Federal Reserve and its own future in the hands of a `Phillips curve' theorist who believes that employment and economic growth cause inflation. If Bush is to survive this mistake, he will need more than luck.

The Federal Reserve does not understand that by restoring incentives to the American economy, Ronald Reagan has dealt inflation a blow. Instead, the Federal Reserve is reacting as if it were a replay of the failed policies of the 1960s and 1970s, which pumped up consumer demand while killing production incentives with high tax rates and red tape.

The ongoing Reagan economic expansion, the longest in our history, has not been based on low interest rates and easy money. Indeed, the growth in the money supply has been low for the past two years.

The Federal Reserve's policy has been so tight that short-term interest rates are higher than interest rates on long-term bonds. In the past, this has often been a sign that the Federal Reserve was forcing the economy into recession.

There has simply been no monetary expansion to fuel a rise in inflation.

Moreover, none of the usually reliable inflation indicators point to higher inflation. The price of gold is down, commodity prices are off their peak, and the dollar and bond prices are up. If America is set for a new burst of inflation, how could it be possible that only Alan Greenspan knows it?

Generals are always fighting the last war, and Greenspan may be leading Republicans to political defeat. A recession would double the budget deficit and the cost of the S&L bailout and increase the strains on our financial system. It is irresponsible for the Federal Reserve to be implementing policies that risk recession.

The American political left sees in Greenspan an opportunity to derail the Reagan Revolution and throw capitalism on the defensive at home and abroad.

The social circles in which people move often indicate who is influencing them, and the signals Greenspan is sending are ominous. He has become a routine escort on the Washington social scene of notorious Reagan-basher and NBC White House correspondent Andrea Mitchell. As Greenspan turns the screws on the economy, Reagan's enemies will subtly support him with their social and political approval.

If in pursuit of lower inflation Greenspan happens to wreck the economy, thankful pundits will shift the blame to Ronald Reagan. Much of the media will report that, despite his best effort, Greenspan was unable to save the economy from Reagan's mistakes. In an effort to save its own hide, the Bush administration would likely go along with this interpretation and adapt to the "new realities."

With the revival of capitalism in the United States and Britain and with socialist and communist countries in full retreat from their failed policies, only the misuse of Federal Reserve power can revive the political left.

Greenspan is the left's last great hope.