Search for an Economic Villain : White House would like Greenspan to take the fall for the bad economy

Nobody knows when the next official recession will show up, but Washington is already picking out scapegoats. In the face of a very serious economic crisis, it’s sad that the politicians can’t rise to the occasion by rising above their profession.

The White House has its gun sights on Alan Greenspan, chairman of the Federal Reserve’s board of governors. It is an ancient custom at the White House at the first sign of softness in the economy to mention that the Fed could be doing more to make money cheaper and the rate of economic growth more vigorous by expanding the nation’s money supply to drive down interest rates.

Iraq’s Saddam Hussein was briefly a candidate because hijacking Kuwait’s oil and gold could kindle higher inflation and make it harder to cut the federal deficit. Ironically, the Fed itself took him out of the running Wednesday, reporting that the economy was sagging long before Hussein’s troops roared into Kuwait.

But that does not leave Greenspan the only suspect, or even the leading suspect. President Reagan cut taxes and borrowed so heavily that the federal debt doubled while he was in the White House. And President Bush contributed by standing too long behind his 1988 campaign pledge not to raise taxes.

In fact, practically everyone belongs on the list who went through the 1980s running up debts that seemed never to come due.

One known cure for consumer nerves and slow business investment is low interest rates, and Greenspan could prescribe those. But cutting interest rates could provoke levels of inflation the country has not seen in a decade.

Then, some economists argue for lower interest rates on the grounds that the country will be better off with a growing economy as long as the budget deficits are huge and growing. Would that touch off inflation? Nobody knows.

There is no good or easy way out. The White House and Congress will have to live with what they created. Hollering at Alan Greenspan will not help a nickel’s worth.