YOU DON’T HAVE TO BE a close reader of the business pages to know that the free-spending American consumer gets credit for keeping the American economy from slipping into a serious recession. What is less heralded is just how the supply side of the economy has contributed to the willingness of American consumers to put their hard-earned and easily borrowed dollars to work shoring up the economy. Start with Wal-Mart, as any discussion of the retail sector must. With revenues of almost $250 billion, it is the world’s largest company. As BusinessWeek points out in a recent cover story, “Every week, 138 million shoppers visit Wal-Mart’s 4,750 stores; last year, 82 percent of American households made at least one purchase at Wal-Mart.”

For President Bush that is both good and bad news. The good news is that Wal-Mart’s use of its mass buying power to keep its costs, and therefore consumer prices, low, has made it unnecessary for the Federal Reserve Board’s monetary policy makers to worry that low interest rates will trigger inflation. The bad news for the president is that Wal-Mart’s purchases account for some 10 percent of America’s trade deficit with China, a deficit that manufacturers and trade unions complain is costing American workers their jobs. To cool things down at home, and to head off congressional pressure to impose tariffs on Chinese goods, President Bush will use the Asian Pacific Economic Conference (APEC) later this week to press China to allow its currency to float upwards so as to make its goods less competitive in the U.S. market.