BUSINESS PORTFOLIO

What's a bank to do? The financial industry is the Gulf war of the American economy. In a high-stakes, long-running war, securities firms and non-financial companies like Sears, Roebuck & Co. have moved into bankers' territory. More recently, bankers have begun to make inroads into investment banking, and they covet real estate and insurance activities as well. Many people, remembering the depression, worry that giving banks new powers would encourage them to get into riskier ventures and thus jeopardize people's money.

``What Should Banks Do?,'' by banking expert Robert Litan at the Brookings Institution, offers a novel, if controversial, solution to the banking war. Dr. Litan, whose book will be published next week, suggests a ``narrow banking'' system that, he says, would protect depositors but let banks compete in areas until now off limits. A narrow bank would be a ``depository appendage'' of any commercial company, like Sears or IBM Corporation as well as Citicorp, and could take deposits, but not make loans. It could invest depositors' money only in safe, liquid assets like United States Treasury bills and securities guaranteed by the government or quasi-government organizations (e.g., Fannie Mae).

To make loans, banks would operate a separate entity, which would raise money through, say, selling commercial paper, as do firms like Household Finance. This entity could also sell insurance and real estate, trade stocks and bonds, and underwrite securities. It could take greater risks than banks can now take, ``but as a price for doing all these activities, they've got to wall up deposits,'' Litan says.

Litan's book is especially timely, coming during a soon-to-end lull in the banking battle. A bill passed last month stops bankers from getting new powers until next March, but promises to explore restructuring the financial services industry in the meantime. Moreover, the new Federal Reserve chairman is philosophically favorable to expanding bankers' powers, something Paul Volcker was not.

The new math in trade

Foreign trade is not an equal-opportunity employer.

The more the US increases its exports and imports, the more blue-collar workers are hurt and white-collar and service workers are helped.

Who wins and who loses is uppermost in the minds of legislators as they try to wrestle down the trade deficit and craft a trade bill this fall. ``Ninety-five percent of the [Capitol] Hill discussion is fear over jobs,'' says labor economist Richard Belous, ``but there's very little information on what trade really does for jobs.''

Dr. Belous at the Conference Board and Andrew Wyckoff at the US Office of Technology Assessment tried to sift out the effects of increased international trade by looking at the following scenario: Say Americans buy $10 billion more in imports cars from Japan or shoes from Korea. At the same time, say Americans sell $10 billion more in exports of computers from IBM or wheat from Kansas.

That would have no effect on the trade deficit. But it would have an effect on jobs. According to the economists' analysis, the influx of imports would squeeze 179,000 people out of jobs, while the extra exports would create 193,000 new jobs. That's a net gain of 14,000 jobs.

But the spoils would not be evenly divided. Companies hit by imports have more blue-collar workers in the manufacturing sector; companies in expanding export markets are more service-oriented, and thus more likely to add white-collar workers (professional, marketing, managerial, and clerical workers).

This runs against the popular notion that increased trade sacrifices high-paying manufacturing jobs for menial service-sector jobs. ``It's not the hamburger-flipper story,'' Belous says.

According to Belous and Wyckoff, the message to legislators is clear: Increased trade wipes out blue-collar jobs, and legislation is unlikely to shield them. Rather, legislators should focus on training employees in industries harmed by imports to jump into the expanding export market. And that means training in service jobs.

How not to win a job

What does it take to recruit an employee? Robert Half Inc. surveyed some 100 companies to find out what perks employees wanted. Here are some of the responses:

Parking space for motorcycle - in employee's office.

Contribution (50 percent) to ex-wife's alimony. Payment (100 percent) of current wife's law school tuition.

Office equipped with a refrigerator, projection TV set, VCR, and microwave oven. Office situated within walking distance of both Chinese and Italian restaurant.

Large office with no windows; interesting views are too distracting.

Payment for any time spent thinking about work on weekends and evenings.