THE immigration story out of the White House was a two-day wonder. Less than 24 hours after the Council of Economic Advisers assailed the immigration reform bill now working its way through Congress as bad for business, deputy press secretary Larry Speakes reaffirmed President Reagan's support for the legislation. But the damage had been done -- opponents of the measure had a potent new weapon. And the episode isn't just a matter of mixed administration signals. It illustrates how private-enterprise morality is, more and more, becoming the overriding morality of the Reagan administration.
In Washington, legislators on both sides of the political aisle have been struggling to draft a law to deal fairly and sensibly with the flood of illegal immigrants. The idea is to extend legal rights to those who have been in this country for years, while clamping down on newcomers.
But trying to reconcile the interests of farmers who rely on alien workers, unions worried about losing jobs, and Hispanic groups upset about discrimination is a tough job.
Trying to sell such a policy to Congress is tougher yet.
The law that is now on the books is an invitation to hypocrisy. Undocumented aliens aren't allowed to work here, but employers are free to hire them. By penalizing employers who put workers on their payroll, the proposed new law would discourage aliens from slipping across the borders.
This is where the Council of Economic Advisers comes in. In its draft report, it attacked the proposed sanctions as a ``labor market tax'' that hurts the economy.
The reasoning is pure Chicago School economics, the economics of a world where efficiency counts for everything and fairness is irrelevant. If employers have to screen job seekers to determine who is an illegal alien, the council contends the recordkeeping will cost American farmers and businesses pots of money -- an estimated $1.6 billion to $2.6 billion annually, according to the council's out-of-thin-air estimates.
Moreover, the council says, aliens grease the wheels of the economy. They wash the test tubes of busy scientists and change the diapers of children in busy households. If fewer aliens are available to do the dirty work, then America will be worse off.
These aren't the off-the-wall thoughts of some independent-minded economist. The last independent-minded economist to chair the council, Martin Feldstein, is safely back at Harvard. His successor, Beryl Sprinkel, was picked because he is a loyal company man. Despite the ritual disclaimer, the council's position represents the administration's thinking.
And what an odd view of the world it is. What is the logic of a government that aggressively prosecutes those whose crime is sheltering a handful of aliens who have fled from Central America, fearful for their lives, while at the same time blithely asserting that millions of illegal immigrants are an economic boon?
It's not just the logic of the White House economists' position that's faulty; it's the position itself. This is a cartoonists' exaggeration of ``what's good for General Motors is good for the country.'' Boiled down to its un-pretty essentials, the argument is that paper work is costly and illegal aliens are a cheap labor source.
Certainly it will cost employers money if they have to check on the status of prospective employees. But a great many things that the nation aspires to -- including a marketplace where companies aren't free to discriminate against monorities or pollute the environment or maintain hazardous working conditions -- cost employers money, too. They all amount to a ``labor market tax,'' as the council puts it. It might well be cheaper if Washington let business go its own way, importing planeloads of Koreans willing to work at 50 cents an hour, but it would hardly be better.
Although the evidence is ambiguous, the illegal aliens may boost this country's economy, as the economists claim. They may make it easier for American farmers to compete on the international market. But whatever the economic calculus, keeping millions of people in a kind of suspended animation, with no claim to even the basics of a decent life, isn't good for the nation's moral health.
Until President Reagan makes the immigration reform bill his cause -- until he acknowledges that, in the long term, it is at least as important as the tax law changes he has been working for -- there won't be an immigration bill. Washington insiders will continue to believe, and not without cause, that the only morality that counts in the White House these days is the morality of the bottom line. In the name of economic freedom, this crowd is taking enormous liberties.
David L. Kirp is a professor of law and public policy at the University of California, Berkeley.