Another term for Greenspan Fed chairman: Republican monetary policy czar a constant help to Democrat Clinton.

February 22, 1996

PRESIDENT CLINTON owes more to Alan Greenspan than to any other Republican, inside or outside the Washington Beltway. Thus it is only right that he should appoint the Federal Reserve Board chairman to another term and only fair that the Republican-controlled Congress should let the president name at least one new board member responsive to traditional Democratic economic ideas.

As Mr. Clinton braces for his re-election campaign, the U.S. economy is basically "on track" (in Mr. Greenspan's phrase) despite current softness and widespread worker insecurity due to revolutionary changes in the global marketplace. Inflation is under tight control. Interest rates are down. Unemployment is holding steady at 5.5 percent. Growth is moderate and steady, thus prolonging the second-longest expansion in half a century.

Much of this good record is due to Mr. Greenspan's cautious monetary policy, which saw short-term interest rates rise until last July, when a series of cuts were ordered to prevent a slide into recession. But much more may be due to the president's wisdom in not resisting the Greenspan plan of action, despite loud complaints from Democratic liberals.

The Fed chairman's insistence that Congress should reverse its profligate fiscal policy by cutting federal deficits also has been a plus for the Clinton administration. It has helped the president resist the big-spenders in his party and has emboldened lawmakers in both parties working toward a balanced budget.

Getting into an election-year mode, Mr. Clinton last week said because of technological advances, the Fed should be more concerned with encouraging growth and less worried about inflation. Mr. Greenspan replied this week that it may take "quite a few years" before such changes take effect. The president would be wise to accept such guidance as long as he is in the White House.

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