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Has the government figured out a way to rid the stock market of "irrational exuberance" without raising interest rates?

It looks that way to me. President Clinton and his advisers realize that a stock market that marches forever forward is not necessarily the best thing for the economy.

The higher it gets, the more likely the possibility of a major bust, or series of busts, that could have negative impact on the economy.

So how to bring down the stock market more slowly without having the Federal Reserve Board raise interest rates? After all, with turmoil in Asia, with no U.S. inflation anywhere on the horizon, there's really no good reason to raise interest rates except to put a brake on the stock market and some of the excess spending caused by the market's big gains.

But the problem is an interest rate hike might cool off the economy to a dangerous level, especially with the uncertainties in Asia and U.S. company profits beginning to falter.

Enter the Justice Department and the Federal Trade Commission. I submit Justice's move against Microsoft Corp., and FTC's antitrust charges against Intel Corp., have had the effect of dampening traders' exuberance, irrational or not, toward the stock market. May was the worst month for the market since the big downturn in October, and I am of the opinion that the antitrust card had just as big an effect on stocks as an interest rate hike would have, without the politically negative implications. Another advantage of having Justice and the FTC do the dirty work is that it ratchets down the market more slowly so investors aren't sure what hit them.

I got the impression that the FTC, at least, had a newly enlightened attitude on antitrust matters. "This is an astonishing merger wave," Robert Pitofsky, FTC chairman, was quoted in The New York Times. "More and more deals we see really should be judged on a global scale, not just on national or local markets. Mergers go through now that would have been challenged just 10 years ago because competition comes from all corners of the world."

And I still think that notion prevails. I'm sure both the FTC and Justice Department realize that Microsoft and Intel have done an effective job of keeping foreign competitors at bay, and they don't want to be responsible for causing any uncertainty and giving foreigners a chance to regroup and move onto our turf.

So I boldly predict after Microsoft and Intel make a few concessions -- as Microsoft is already doing -- there will be relatively quick and painless settlements. After all, now that Gateway is offering to build computers with other software companies' Web browsers, it's harder to say Microsoft has a complete lock on the market.

It took me a long time to arrive at the conclusion that no matter how government decides to keep down inflation, such action is the most important ingredient in monetary policy. Low inflation leads to lower interest rates, and lower interest rates are better than a tax cut in putting money into people's pockets -- and do so much more equitably.

The problem with tax cuts is they cause higher deficits (at least initially), which triggers higher inflation, which results in higher interest rates, which could bring on a recession and put a crimp in the stock market.

When I was working in Washington right out of college, I came dangerously close to voting for a Democrat -- John Kennedy -- for president. Only phone calls back to the Midwest and bedrock Republican philosophy from my Dad straightened me out. Now, 38 years later, I am warming to the appeal of a balanced budget over tax cuts to keep the economy going strong.

There's no one back in the Midwest I can call these days for a booster shot of Republicanism. See what happens when I'm left to my own devices?

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