INDUSTRIAL POLICY IS HERE TO STAY

The President gleamed and the McDonnell Douglas people gleaned as the sale of the F-15s to Saudi Arabia was presidentially blessed. It meant a lot.

It meant that President Bush, like many presidents before him, would use the levers of presidential pork power to spend himself into the minds and hearts of the American people. Indeed, the White House press office issued a "tally sheet" extolling the fact that the president had given out $23 billion in one week in federal subsidies, foreign arms sales, disaster relief, farm price supports and other goodies.

The New York Post headlined it: "BUSH DOES IT AGAIN." The White House later issued the president's speech on the need to balance the federal budget, apparently without irony.

It also meant that this president, like many of those before him, had given up on any notion of controlling the sale and distribution of conventional weaponry. There's too much money and too many jobs at stake in the conventional weapons business. In fact, it's the best merchandise that America produces by its best-paid engineers and blue-collar workers. We're hooked on weapons; no cure in sight.

It meant that McDonnell Douglas could live to build planes for another day. We know that sometime, in the post Cold War world of reduced defense budgets, some major arms manufacturers are going to be hard pressed to continue. Peace brings a nasty price to the arms industry. Peace in the Middle East would be yet another blow to the weapons makers.

Finally, it meant that George Bush realizes that there is a necessary role for the government to play in the day-to-day economic decision making of our capitalist system.

It's called "industrial policy," although the Adam Smith Marching and Chowder Society bristles at the mere mention of the words.

The F-15 sale demonstrated that George Bush was not going to stand idly by and let thousands of skilled workers hit the streets. It's one thing to talk about "economic conversion." It's one thing to talk about "retraining."

But when you have industries that have been proven failures in attempting to convert to civilian products and retraining programs that don't exist, you are faced with the stark choice of maintaining thousands of the best paying industrial jobs in America vs. no jobs at all.

President Bush intervened to save the F-15 in Missouri, as he earlier had done with the F-16 in Texas. Bill Clinton would have done the same. It will not be the last presidential salvage job in the `90s. Penn Central, Lockheed and Chrysler stand as historical precedents.

Industrial policy is alive, but perhaps not so well. The question is not do we have one. The question is do we have a good one? We don't. What we have is an industrial policy by default a slapdash combination of tax breaks, the Ex-Im Bank, quotas, subsidies and case-by-case bailouts. We avoid looking at the "big picture" because that would smack of imitating Japan and Germany and, heaven knows we don't want to be like them.

So be it. Call it what you like. Industrial policy is here to stay. We just won't tell anybody about it.