WHY NOT appoint Beryl Sprinkel chairman of the president's Council of Economic Advisers? President Reagan is considering the idea. We say go ahead. It's not too high a price to pay to get Mr. Sprinkel out of the Treasury.
He is a man of an earnest and dogmatic turn of mind, best known for his active membership in the monetarist school of economic theory. His thoughts on the subject are familiar ones, but vigorously and frequently expressed. If he should become its chairman, the Council of Economic Advisers would be at least temporarily, for all practical purposes, out of business. But since neither Mr. Reagan nor anyone else at the White House is currently paying any attention to economic advice anyway, the actual loss would be modest.
In his present position as undersecretary of the Treasury for monetary affairs, Mr. Sprinkel bears the chief responsibility for this country's international financial relations. It is an operating job, in contrast to the purely consultative nature of the council. When things go wrong in the intricate financial network that holds the world's economy together, the undersecretary of the Treasury needs to be able to act fast and surely, in close cooperation with people abroad who share his purposes and who trust his judgment.
But Mr. Sprinkel is a great believer in the markets and in the virtue, as the phrase goes, of letting the markets work. Most of his counterparts abroad consider his enthusiasm to be misplaced, since the world's financial history up to World War II was a succession of panics, slumps and crashes in which the markets were working, all right -- but working, as they sometimes do, perversely and blindly. Having a Treasury that is too respectful of the rule of the markets is a little like having a fire chief who believes in entropy and letting the laws of chemistry run their course. Not every fire burns itself out harmlessly.
Mr. Sprinkel's presence at the Treasury is taken by the rest of the world as a signal that the Reagan administration sees no need to deal seriously with the possibility of international financial trouble. How large is that possibility? The Latin American debt crisis, which involved every large bank in this country, has been stabilized for the present -- without much help from the Treasury -- but it has not been resolved. Meanwhile, the United States' foreign balance is swerving more deeply into deficit as the dollar, the world's central currency, rises perilously far above its value in the things that it can actually buy.
The incoming secretary of the Treasury, James Baker, ought to be allowed to choose his own monetary specialist. By all means elevate Mr. Sprinkel to the Council of Economic Advisers and put him immediately to work writing memoranda that the president doesn't intend to read.