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player ready...Paul Volcker, a nominal Democrat, frequently frustrated the Reagan White House by rebuffing whatever monetary sleight-of-hand the President`s men dreamed up. The suspicion in Washington is that Alan Greenspan, the gung-ho Republican who is Volcker`s successor as Federal Reserve chairman, will bend more easily to presidential pressure to inflate the economy as the 1988 election nears.
To paraphrase Mr. Dooley, the Fed, like the Supreme Court, watches the election returns. But the guess here is that Republican Greenspan is no more likely than Democrat Volcker to play games with the money supply and the economy just to keep the GOP in office.
The reason is summed up in Business Week magazine`s description of Greenspan as ”the consummate economic conservative.” In truth, both Volcker and Greenspan are classic conservatives, in that both believe in balance, order, tradition and paying your own way.
In this, neither could be more at odds philosophically with Ronald Reagan and his economic demolition crew than if they were so many Bolsheviki.
Webster defines conservatism as ”a disposition to preserve what is established: a political philosophy based on tradition and social stability, stressing established institutions and preferring gradual development to abrupt change.” The party labels on Volcker and Greenspan are far less important than the fact that they share this conservative belief in the American system and economy as it has developed over the years, and seek to preserve and strengthen it.
It is the height of irony that Reagan calls himself a conservative. In fact, he arrived in Washington determined not to build on the past but to uproot the achievements of the previous half-century. His motto was not preservation but rapid, disorienting change. Although radicals of the left detest the comparison, the Reaganites are not conservatives at all, but radicals of the right.
Again, Dr. Webster provides a text: Radicalism, he says, is ”extreme, tending or disposed to make extreme changes in existing views, habits, conditions or institutions.”
Well, you can`t tell the players these days, even with a scorecard. Liberal, like gay, doesn`t mean what it used to. Even communists are talking like capitalists. Still, we used to know what a conservative was and, if men like Volcker and Greenspan keep the faith, the label might survive the economic anarchists who have kidnaped it for the last six years.
Reagan hit Washington when inflation was sky-high and proceeded, through tax cuts and military spending, to write the most inflationary budget in history. Poor Volcker, who certainly was not hired to midwife the Reagan Recession, had to tighten money. The alternative was hyperinflation, which would have destroyed the American system as surely as the German inflation of the 1920s undid that civilization.
This, then, has been the struggle of the last six years. The President and his men were determined to reverse every advance of the last 50 years: To do this, they have been willing to risk the nation`s economy, currency and credit rating.
Volcker, swaddled in independence and cigar smoke, fought to keep our economy, currency and credit rating intact. In the process, he has become a national nanny, scolding us about deficits and debts, refusing easy money just because it feels good, and telling us it`s all for our own good.
He was right, of course, but his medicine–a recession followed by slow growth–often hurt. There are no good solutions to bad problems–only bad ones and less bad ones. It was Paul Volcker`s fate to rule the Fed at a time when the less bad solutions were the best.
Greenspan is a Republican, but his task is not to re-elect a GOP administration. Instead, it is to finish Volcker`s work by preserving the economy until the Reagan aberration ends and a new administration, Republican or Democrat but assuredly more truly conservative than the present one, can take over.