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COLUMN RIGHT/ RICHARD VIGILANTE : There’s Reason to Brag About Bush’s Record : Inflation is low, interest rates are down and we’ve avoided a trade war because of him.

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<i> Richard Vigilante writes about politics for a number of national publications and is working on a book about the future of American labor. </i>

George Bush should run on his record--his domestic record. I know, I know, every political commentator in the country and most of Bush’s political advisers seem to believe that his only chance is to run away from that record. Yet Bush’s handling of the economy will probably be remembered by history as one of the best by a President in this century.

The United States and the world are almost certainly headed for a great turn-of-the-century economic boom. The three great engines of the boom will be the final defeat of the Great Inflation of the 1970s, the relatively orderly collapse of communism and the expansion of free trade. Much of the credit for all three goes to Bush.

Bush is criticized for doing little about the recession, but his policy has been just right. The current slump is worldwide, and the United States is doing better than most other trading partners. Many of the causes, such as the vast investment in Eastern Europe, which is contributing to a worldwide rise in real interest rates, will be positive in the long run.

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The last thing we need under these circumstances is a President who would panic and start pulling out all the stimulative stops to fake a recovery before the election.

Bush has risked his reelection to do the right thing. The Great Inflation, brought on by the abandonment of the dollar-gold standard in the 1970s and only partly tamed by Ronald Reagan, has been fatally wounded by Bush and current Fed Chairman Alan Greenspan. If we stay on course, inflation, now hovering around 3%, will probably begin the final descent to 2%, which economists count as roughly zero.

As a result, both short- and long-term nominal interest rates are at roughly 20-year lows or better, and the market seems to be surrendering its anticipated inflation premium for long-term rates. Already, as Bear Stearns chief economist Lawrence Kudlow points out, low inflation and interest rates are providing a sizable “monetary tax cut,” lowering the cost of doing business, boosting assets, shrinking debt, encouraging both consumer and capital purchases and long-term investment. The drop in mortgage interest rates alone has given homeowners a “tax cut” of nearly $30 billion a year.

Much of the credit goes to Greenspan. But presidents can either protect the Fed or frustrate it. Jimmy Carter packed Fed Chairman Arthur Burns off to Germany and replaced him with pliable G. William Miller, who revved the economy up to double-digit inflation. Bush, by contrast, reappointed Greenspan to another term even after the chairman made it excruciatingly clear that he was not going to sacrifice the fight against inflation to Bush’s reelection. Senior Fed officials say that Bush has been more supportive of their austere policy than any President in memory.

On trade, Bush has been brilliant and brave, resisting demagogues who would ignite a trade war to pick up a few votes; successfully using the Uruguay round of the GATT (General Agreement on Tariffs and Trade) negotiations to reduce world agricultural subsidies, opening markets for American food products, and saving consumers billions of dollars in annual food costs; and bringing Mexico into the North American Free Trade Agreement, which, despite the dangerous nonsense spouted at the Democratic convention, will mean more high-paying industrial jobs for Americans. Since Mexico joined GATT in 1986 and sharply reduced its trade barriers, U.S. exports to Mexico have doubled. U.S. factories in Mexico use American capital goods, American parts, American steel. For every dollar increase in Mexican GNP, 15 cents is spent on U.S. goods.

As for the collapse of communism, however chaotic the Eastern economies look now, the liberation of individual enterprise will inevitably create a human tidal wave of productivity, a dramatic increase in world GNP and a huge expansion in the markets for American goods. Unfortunately, until Bush’s fiery acceptance speech in Houston, the Administration had not seriously tried to explain why the President deserves credit for the Evil Empire’s orderly demise.

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Mesmerized by voter anger over the economy’s current difficulties, the Bush people seem afraid to brag about their very real domestic achievements. But taking the fifth is no way to win an election. Since most voters are already angry about the recession, not much can be lost by saying out loud that caution was just what was called for, that meddling might have blown the fight against inflation, that Americans are already reaping some of the benefits from the President’s self-control and that a much bigger pay off is on the way.

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