DON'T PANIC: HERE COMES BAILOUT BILL

The phone call reached Rush Limbaugh at his studio shortly before he went on the air at noon, but this time the person on the other end of the line was not Bob, a machinist from Dayton, Ohio, or Dorothy, a housewife from Tucson, Arizona. It was Alan Greenspan, the chairman of the Federal Reserve and the second most powerful man in Washington, calling Limbaugh to lobby for Bill Clinton's $40 billion rescue package for Mexico. The 10-min. chat, which took place four weeks ago, was cordial enough but left the folk hero of the kilohertz unmoved. As Limbaugh advised his 20 million listeners last week, ``President Clinton is very decisive in giving away our money and taking away our rights.''

It was this kind of populist blast--a picture painted by Limbaughs and cartoonists across the U.S. of a President extending a hand to Wall Street and ailing foreign countries--that convinced Clinton he had to bypass Congress altogether. With the Mexican peso sliding, only $3.5 billion left in Mexican currency reserves and financial markets throughout Latin America on the brink of collapse, the President last week invoked his executive authority to grant Mexico $20 billion in loans and loan guarantees as the centerpiece of a coordinated bailout. Following Washington's lead, the International Monetary Fund agreed to provide Mexico with a further $17.8 billion, and the Swiss- based Bank for International Settlements kicked in an additional $10 billion.

By the time Clinton acted, the political paralysis in Washington had become almost as threatening as the economic trouble in Mexico. If a plan supported by the President, the Fed chairman and the heads of both houses were rebuffed, the result ``would be perceived in the rest of the world as leadership anarchy,'' in the words of Robert Hormats, the vice chairman of international operations for Goldman Sachs. For Clinton, the overriding goal was to prevent a financial crisis whose victims could have included up to 700,000 Americans holding jobs tied to exports to Mexico. In the past six weeks, U.S. manufacturers have already sharply pared their forecasts for Mexican business; Ford chairman Alex Trotman conceded last week that his company's plans to double exports to Mexico in 1995 were now just ``a pipe dream.'' Instead, the industry expects total Mexican sales to fall by one-third from last year's total of 600,000 vehicles.

In the short term, the U.S.-led rescue saved Mexico from defaulting on $26 billion of the government's Tesobonos bonds that come due this year--a disaster that would have driven the vast majority of foreign investors out of the country and much of the rest of Latin America. With the threat of default averted, the Administration argues, Mexico can begin to restore itself to health. Says Treasury Under Secretary Lawrence Summers: ``The success of Mexico's economy now rests on Mexico.''

But that's just what disturbs many critics of the bailout, who regard Mexico as a stumble-prone country that will inevitably be back for another tourniquet. ``We're bailing out a Mexican government that has mismanaged its economic affairs for as long as I've been an adult,'' says Democratic Representative Marcy Kaptur, a leading opponent of the rescue plan.