Officials of the Bush administration who have publicly attacked the recent tightening of monetary policy by Alan Greenspan and his colleagues at the Federal Reserve are serving the president badly. By arguing for an expansionary monetary policy in the face of overwhelming evidence of accelerating inflation, they are violating the first rule for a president's first term: squeeze the inflation out of the economy during the first two years, even at the cost of a recession, in order to make more expansionary policies and rapid output growth possible in the two years before a reelection effort. To do the opposite, by overheating the economy early in a four-year term, is to invite trouble later and a disaster at the polls. There is no longer any question that the U.S. economy faces serious inflationary pressures. The recent unemployment figure of 5 percent is the lowest since 1973, and there are shortages of workers across many sectors of the economy. As a result wage increases are accelerating, and the rate of increase in unit labor costs during the fourth quarter of 1988 was almost twice that of a year earlier. Consumer prices increased at an annual rate of 5.5 percent in January-February, and wholesale prices are rising sharply and broadly across sectors of the economy. Many U.S. industries are now operating at very close to full capacity. One would have to be kidding himself to conclude that this economy does not face serious inflationary problems. The U.S. economy cannot continue to grow rapidly for another four years. The excess capacity that would make such growth possible simply does not exist. The question is no longer whether there will be a slowdown, but instead when it will occur. This economy now faces two possible short-term scenarios. One option is that sufficient monetary stimulus is provided to maintain economic growth for another year or so, at the cost of rapidly accelerating inflation. This would virtually guarantee a severe tightening of monetary policy and a serious recession in 1991-92. Alternatively, a more moderate tightening of monetary policy can be pursued now, before inflation and expectations of more rapid price increases become entrenched. This would produce a slowdown in growth, and perhaps a mild recession in 1989-90, but inflation would recede, and rapid growth would be possible in 1991-92. The first scenario, of rapid growth early and trouble later, occurred in 1977-80, and resulted in the return of Jimmy Carter to Georgia. Economic growth averaged 5 percent in 1977-78, but inflation accelerated to 13.3 percent in 1979, necessitating a tightening of monetary policy and a recession just before the 1980 election. The second option can be seen in the 1981-84 period, and produced the landslide reelection of Ronald Reagan. Tight money early in his first term caused the worst recession since World War II in 1982. Inflation was, however, brought under control, and sufficient excess capacity was created to allow more expansionary policies and rapid growth without inflation in 1983-84. As a result Walter Mondale was defeated easily. Officials in the Bush administration cannot announce that they want tight money and a slowdown in 1989-90 in order to create the conditions for rapid economic growth in 1991-92, but it ought to have the good sense to keep quiet and allow the Federal Reserve to pursue an anti-inflationary course without misguided public criticism. Fortunately, it does not really matter what Treasury officials and other economic advisers think, because the Federal Reserve is carefully shielded from interference by the executive branch of the government. The policies chosen by Greenspan and his colleagues are likely to be based on a simple comparison of two public reputations. Paul Volcker gave us recessions in 1980 and 1982, but he stopped inflation and produced strong economic growth during the latter half of his period in office. In the world of economics and finance he is almost universally regarded as a hero. His predecessor as Federal Reserve chairman, William Miller, produced rapid economic growth in 1977-78, but allowed inflation to become truly frightening by 1979. He is not remembered fondly, to the extent that he is remembered at all. Greenspan has an easy choice as to how he would like to be viewed. The Volcker model is far more attractive than the alternative. Greenspan certainly does not want to be thought of as the Federal Reserve chairman who restarted the inflation that Volcker stopped. If monetary tightening is used to reverse the recent acceleration of inflation, there will be some short-term pain, but the economy and the Bush administration will be far stronger in 1991-92, when it really counts. The Federal Reserve ought to be allowed to fight inflation without advice from back-seat drivers, particularly since those giving the advice would be far better off in the long run if their views were ignored. The writer is a professor of economics at the George Washington University.