ROBERT REICH didn't actually speak at a Boston College conference this week. Because of illness, the Labor secretary couldn't deliver the ``keynote speech.'' But the text of his talk was distributed, and it contained words that sounded suspiciously like a plea to the Federal Reserve to take it easy on monetary policy.
For the Clinton administration, criticizing the Fed has been something of a taboo. And Mr. Reich was careful to address his comments to ``policymakers with the task of constantly balancing interests, constantly making trade-offs'' - nobody specific, just the ``experts.'' One, Federal Reserve chairman Alan Greenspan, showed up to advocate further banking-industry deregulation.
``Let me raise a gentle caution,'' Reich's text said. ``The decisions you make on macroeconomic policy [monetary and fiscal issues] have uneven distributional consequences. When we decide to battle inflation, the first people drafted into the inflation fight are those who are often least able to afford it, whose real incomes have been falling for years, or who are still seeking jobs.
``Higher interest rates may be good news for bond buyers and lenders,'' his speech went on. ``But they can be trouble for people struggling to finance homes or repay student loans. The delicate manipulations and elegant abstractions of macroeconomic policy have their ultimate effect - sometimes heartbreakingly - on individual workers. Needless pain, idleness, and stress are the real costs of [policy] error.''
It is traditional for the Labor secretary to be the voice of the worker in Washington. But Reich does it with such feeling and knowledge of the economic difficulties of so many Americans that his speeches are getting considerable attention in the press.
By comparison, Reich's predecessors during the Bush and Reagan administrations sounded cold. And his more politically minded colleagues are busy in this election period pointing to the economic ``achievements'' of the Clinton administration.
Reich referred to the 8 million unemployed, the 4 million working part time who want full-time jobs, and the 12 percent unemployment rate for those without a high school degree. ``How can it be that some fear that inflation looms when there's so much slack in the labor market?'' he asked. He lamented the ``wasted work force ... walled off from emerging jobs by skill barriers.''
By contrast, Laura Tyson, chairman of President Clinton's Council of Economic Advisers, told the conference that the economy looks, in many ways, stronger than it has for 30 years. She noted the declining federal deficit (the lowest ratio to national output in 15 years in the current fiscal year), the 2.3 percent rate of productivity increase in the economy for the past four quarters, the 3 percent expansion in real gross domestic product this year, and manufacturing running at 84 percent of capacity.
At lunch, Robert Rubin, the president's assistant for economic policy, spoke of the economic mess Mr. Clinton had inherited and the better scene now: 4.3 million new jobs in the past 19 months, compared with 2.4 million in the Bush years; 3 percent inflation, down from 4 percent; and 6.1 percent unemployment, down from a peak of 7.7 percent under President Bush.
True, interest on long-term bonds has bounced back to the 7.7 percent rate in place when Clinton came into office, Mr. Rubin admitted. But the economy is ``very different,'' with the 7.7 percent rate explained by the ``solid'' economic growth of today.
But Reich was looking at financial markets from the standpoint of workers. ``American companies would not be restructuring at such a rapid pace - investing in new technologies while cutting payrolls - were it not for the relentless efficiency of financial markets, which have been demanding results.''
The global financial market, though responding to economic fundamentals, ``also responds instantly and hugely to rumor, gossip, innuendo, mood swings, the coughs and sneezes of heads of state, the smiles or frowns of central bankers to any remote hint of what may happen to interest rates or currencies within the next week or hour or minute....,'' Reich asserted. But ``in a skill-based economy, deploying financial capital effectively depends on developing the human capital to put it to good use.''
Reich was making a plea for the worker - not Wall Street.