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PHANTOM OF INFLATION SCARES CLINTON INTO ELIMINATING JOBS

SHARE PHANTOM OF INFLATION SCARES CLINTON INTO ELIMINATING JOBS

To anyone who has grown up with the deeply American belief that the best way to get ahead is to roll up your sleeves and get to work, it must seem peculiar that the Clinton administration has adopted a policy that deliberately puts a brake on the economy, and thus on the number of Americans who CAN work.

The administration, genuflecting before the Federal Reserve, is now more concerned with inflation than with the chronically high unemployment that is eroding the promise of the American dream for millions of men and women.But what inflation? Nobody can find the inflation. Having run from so many other battles, the administration is now engaged in a fight to the death with a phantom. It's a fight that pleases the wealthy but has painful consequences for ordinary working men and women, and for the poor.

The decision to sacrifice the livelihoods of real people to placate the evil spirit of inflation has enormous consequences, most of them bad. A lack of meaningful work is at the core of nearly all the social problems plaguing the country.

You cannot gather up the pieces and begin to repair the damage we have done to families without finding a way to create many more jobs. You cannot achieve meaningful welfare reform, or universal health coverage, without a growing market for labor. And you sure can't make any real headway on crime without putting vast numbers of young people to work.

But we are not moving in that direction. The outplacement firm Challenger, Gray & Christmas reported Tuesday that work-force reductions through May were running 18 percent ahead of the first five months of 1993.

While there are jobs being created (many of them temporary or part time), corporate downsizing continues at a rapid, perhaps record-breaking rate. There are vast regions of the work force that have yet to be reached by the economic recovery, and they won't be reached as long as the brakes are kept on expansion.

If the country is not yet strong enough economically to have nearly full employment for the middle class, how will it be possible to get decent jobs to the working poor, and beyond them to the hard-core unemployed?

"You can't at this level of growth in the economy," said Jeff Faux, president of the Economic Policy Institute in Washington. In Faux's view, the argument that you have to sacrifice jobs to keep inflation under control is a specious one, given current economic conditions.

Faux noted that over the past 80 years, the period for which price indices are available, the United States has never experienced runaway inflation that resulted from a peacetime economy surging out of control.

"In our actual experience," he said, "the dreaded wage-price spiral has only occurred when markets have been suddenly jolted by war or supply shocks, such as occurred with the oil embargoes."

The inflation rate is a shade under 3 percent, yet the Federal Reserve remains mesmerized. As for out-of-work Americans - well, too bad about them.