Yes, they had no bananas but they had plenty of wine and cheese, a U.S. Marine combo playing "The Girl From Ipanema" and the president's top banana for fighting inflation.

So what else could 250 state and local officials from 42 states want at a White House party in their honor last night?

Alfred Kahn never once mentioned the word "banana," his now-famous Kahnism meaning "depression," which he hastily devised as a synonym last fall after administration colleagues blasted him for even suggesting such an economic prospect.

But he said a lot about inflation, about the effects of regulatory reform and about the need for competition in the market place. None of it did he say in speech form since that kind of talk dominated the daylong White House Conference on State and Local Regulatory Reform which brought everybody to town.

"The phenomenon of regulation is such a ubiquitous one," said Kahn, a newly bestowed Redondo Beach fire marshal's badge gleaming on his lapel. "There's such a great variety of them but it's true that almost all regulations in one way or another increase costs or increase rigidity of the system."

Right about then, up walked a case in point.

"You gave us the best air service we ever had," Bruce Hagen of Bismarck, N.D., told Kahn of the action he took as head of the Civil Aeronautics Board during a Northwest Airlines strike a couple of years ago. Kahn brightened excitedly, remembering how he immediately "shoved in North Central Airlines" to provide service.

"It's terribley satisfying now when people come up and say that they have better service as a result of competition. You see, the government was protecting the existing airlines."

All of which gave Kahn the chance to press further the merits of competition.

"If you limit the number of people in the field, don't let them compete in price, keep down imports, well, the result is that they get sloppy, slovenly and they're constantly on the edge of bankruptcy," he said.

"If people don't pay for their mistakes," he went on, "all you've got is a profit system -- not a profit and loss system."