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ECONOMY ISN'T SINKING, 2 EXPERTS SAY

Consumer confidence is in the Dumpster, General Motors' layoffs have panicked workers across America and Wall Street's nerves are shaken. Is it time to throw in the towel for the American economy?

Interestingly, a resounding "No!" came to me from both sides of the economic spectrum when I conducted a historic chat with the two most eminent living American economists, Milton Friedman and Paul Samuelson.On the surface, these septuagenarian seers - Nobel Prize winners, both - could scarcely offer more differing perspectives. Friedman is a staunch and unrepentant Reaganite, Samuelson a steadfast liberal who wants to expand government and raise taxes. Yet when I questioned them together on the pressing issues of the 1992 economy, as perceived by the American people and as debated by the presidential candidates in both parties, a surprisingly broad area of agreement quickly emerged. For example:

- The economy is not sinking and is likely to be improving later this year, even if no politician lifts another finger to assist.

Samuelson calls the present situation "flat" - rather than "in free fall," as Bush so foolishly described it in New Hampshire - and thinks there's a better-than-even chance that we will be in so obvious a recovery by Labor Day that people will wonder why they got so frightened now.

Friedman agrees that "by past standards, this recession is relatively mild, despite the contrary public perception," and believes that we are "probably already in the early stages of recovery."

- Overly tight monetary policies at the Federal Reserve made things worse than they otherwise would have been.

Samuelson blames what he sees as 25 months of "too little, too late" by chairman Alan Greenspan and his minions, and thinks "we should be leaning on the Federal Reserve" to loosen further. Friedman differs only on the action to be taken now. He is particularly critical of the Fed's stinginess in early 1991, when for about five months there was essentially no growth in the broad M-2 measurement of money supply. But he notes that since early fall M-2 has been growing at a husky annual rate of close to 6 percent, and he opposes stronger stimulus at this point because "two wrongs don't make a right."

- The trendy talk in both parties about a "middle-class" tax cut, while continuing or even accelerating "soaking the rich," is missing the point on taxes.

Samuelson, whose impeccable Democratic credentials include having been the chief economic spokesman for George McGovern in 1972, says a consumption-stimulating, deficit-enlarging middle-class tax cut would be "precisely bad medicine for the long run." And he warns his fellow Democrats bluntly: "I don't think that to be a Democrat, you should be automatically anti-business."

Moreover, the Nobel laureates agree on one tax cut that they feel would indeed be helpful now: the indexing of capital gains. That simply means that the original purchase price of an investment would be adjusted upward by whatever inflation has occurred since then, before calculating the tax. Fair, sensible and pro-investment - from the left and from the right.

- Protectionism may stir the crowds, but it doesn't help the American worker.

Friedman, the Republican, was explicitly critical of Pat Buchanan for acting as if the economic problems of this country could be solved by somehow institutionalizing xenophobia. And Samuelson, whose party has produced similar sloganizing from Dick Gephardt, Tom Harkin and others, heartily joined Friedman's condemnation of such thinking.

As Friedman put it, "In terms of differences among economists, you will poll all economists around the world and have a great difficulty finding any who believe in protectionism as a principle. Almost all of them believe in free trade. Paul and I certainly oppose the protectionists."

An abiding myth among us Americans, who take such pride in being a "practical" people, is that those darned pointy-headed economists, however eminent, are never able to agree. As the wide range of consensus between these two superstars demonstrates, this is less true than we sometimes want to believe. Friedman and Samuelson, through long experience, know that instant-satisfaction quick fixes, however attractive to the impatient in an election year, are often dangerous illusions. When these two guys are in rare accord, we all ought to be listening.