DATE: Sunday, August 10, 1997               TAG: 9708070189

SECTION: COMMENTARY              PAGE: J1   EDITION: FINAL 
TYPE: Opinion

SOURCE: DAVE ADDIS

                                            LENGTH:   69 lines

E-Z INFLATION FIX: JUST ERASE THOSE PESKY LITTLE ZEROS

Boris Yeltsin hasn't had a lot of good ideas lately, but last week he came up with his wildest brainstorm since 1993, when he decided that the best way for a struggling democracy to deal with a balky parliament might be to turn the tanks loose on their meeting hall.

Yeltsin announced Tuesday that the Russian government plans to release a whole new series of currency, and that they will simply erase the last three zeroes from every bill.

So, what had been a 5,000-ruble note will now be a 5-ruble note. (That's a little less than one dollar, American.) There will, of course, be a similar markdown in prices. Instead of 2,000 rubles to ride the subway, the fare will be 2 rubles. Which is exactly what it cost 5 years ago.

Somebody should tell Alan Greenspan about all this.

We Americans have been pretty spoiled when it comes to inflation. Greenspan, the Federal Reserve chairman, has been circling over the booming economy for months now like some ravenous old turkey-buzzard, just dying to pick up a scent of rot in the air. If a nickel's worth of inflation is about to blossom, Greenspan is ready to swoop in and squelch it.

Not that that's all bad, actually. The strength of our economy is what has made the American dollar bill - actually, in most cases, the $100 bill - the true medium of exchange in Moscow and many other foreign capitals.

None of us, of course, wants to go back to the bad old days of 10 percent annual inflation, when a loaf of bread that cost a dollar in January would be $1.10 by the following December.

Oh, the horror.

Let's keep things in perspective: At one point, in 1993, Russia's annual inflation rate was about 2,600 percent. Do the math on what that did to the price of a bowl of borscht.

Once, in the winter of '93, I was standing at the window of a Moscow street kiosk, trying to decide whether to buy a bottle of Armenian brandy. A clerk reached up to the bottle I was looking at, removed the R3,000 price tag and replaced it with one that said R4,000. Another time, the price of a cab ride halfway across town went up 500 rubles from the time I left home in the afternoon to when I needed to get back in the evening.

The Russians have now wrestled their inflation rate down to about 13 percent, and Yeltsin wants to restore a little of that fabled Slavic pride by erasing all those embarrassing zeroes from their cash. They're tired of having to trade a satchel full of money for a little bag of potatoes. And it's beneath their dignity to behave like Italy, where no purchase made in lira can be figured without an electronic calculator.

Four years ago, when he was heavily into the sauce, Yeltsin revalued the Russian currency by declaring that in exactly three days the old bills everybody was using - the ones resplendent with hammers and sickles and Lenin and Stalin - would no longer have any value. New bills would take their place. But, of course, this being Russia, there weren't enough new bills to go around.

Imagine being told that in three days your cash will be worth about the same as Monopoly money. And this in a society where checks and credit cards were unheard of. Every purchase - even a car or an apartment - was in cash.

You could almost taste the panic. Russians pulled every old ruble out of their musty mattresses and went on a spending binge. If they couldn't trade up for dollars, they just bought anything they could get their hands on - often, vodka.

This time, they're phasing in the new money over several months. Inflation is still bad, by our standards, and crime, corruption and incompetence are the rule rather than the exception. But the stabilization of the Russian economy brings closer the day when we'll worry more about fighting the Russians in the marketplace than on the battlefield.

The great thing about that sort of war is that even the casualties live to fight another day.

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