The Second-Most-Powerful Foot

ANTHROPOLOGISTS stumbling on America might be puzzled by our tribal penchant for paying virtually nonstop attention to picking our chief but showing only a flicker of interest in the selection of ''the second most powerful leader in Washington.''

That's the Fed chairman, of course.

Sometime in the next few days President Clinton is expected to name Alan Greenspan to a further term as head of the economy-steering Federal Reserve Board. Every American (not just wandering anthropologists) ought to be vitally interested. Why?

First, the Fed boss has major impact on jobs, prosperity, young Americans' ability to buy a nest and car, and older Americans' ability to live on their retirement income.

Second, the Fed chairman often has some degree of impact on presidential reelection prospects.

Third, he (someday, she) carries considerable weight with other central bankers, and thus the world economy.

None of this implies omnipotence. The Fed can't single-handedly control long-term interest rates. It can't fully counteract the bad effects of a profligate, debt-ballooning Congress or president. But its accelerating and braking via short-term interest rates do matter, a lot. The chairman has the second-most-powerful foot in the land.

The expected reappointment of Mr. Greenspan is a safe move by Mr. Clinton. It buys cautious, perhaps over-cautious, driving of the economy through the end of the century. In the last full business cycle the Fed braked (raised rates) too long before easing. With very slow growth, only slightly rising wages, low inflation, and low unemployment, Greenspan's immediate task is clear. He should step decisively (but not brashly) on the accelerator. That means a larger interest- rate cut than the last one.

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