Economist sees no GOP disaster this fall
Reporters almost never compliment a public figure. Yet as a prelude to asking a question about the economy, a highly regarded newsman called Walter Heller ''one of the most successful economic activists of our generation.''
This is another way of saying that ''when Heller talks, the nation's leaders listen.''
Dr. Heller, chairman of President John F. Kennedy's economic advisers and the favorite economic sage for countless Democratic leaders over the years, was explaining why President Reagan and the Republicans were not facing a ''disaster'' in the coming elections, given double-digit unemployment.
Yes, Heller said, he realized that the last time the midterm elections were fought with unemployment at 7 percent or more - in 1958 - the GOP lost almost 50 seats. But now Heller was conceding that Democratic gains would be considerably less than that.
''It is that man in the White House,'' Heller said. ''The new Minnesota poll (Heller is on the University of Minnesota faculty) gives him a 53 percent approval rating. Because of Reagan's continued popularity, the high unemployment won't be quite the albatross for Republicans it otherwise would have been.''
Here Heller, who concedes a liberal political tilt, said that President Reagan's continued popularity, which he thinks will rub off on the elections, could be attributed in part to his likable personality.
But he said the main reason for the public's patience with the President is the fairly widespread appreciation for what he called ''Reaganology.'' He said that Reaganomics had failed - and much of the public saw that it has failed.
But, Heller said, a lot of voters like ''Reaganology,'' which he went on to define as the shift of spending from the civilian to the military, of government from Washington to the hinterlands, and of the burden of paying for government from the upper-income groups to lower-income groups.
Heller is a strong critic of the President. He says he is dumbfounded by many of Reagan's comments about the economy.
''There ought to be an 'Oh, Yeah?' squad that follows Reagan wherever he goes ,'' says Heller, a ''truth'' group that enlightens the public on presidential misinformation.
On other subjects, Heller had this to say:
* On Walter Mondale's call for ''getting tough'' with the Japanese in the area of trade. ''I'm an admirer of Mondale. But I don't agree with him on this. Nor did he ask me for my advice. I don't agree with this protectionist position - and I hear he may be backing off from it.
''We have an enormous stake in exports. One-fifth of our manufactured goods is for export. And two-fifths of our agricultural acreage goes for exports. . . . A protectionist position would invite retaliation and could lead to an economic war.''
* The economic outlook: ''A long, sustained recovery might begin next spring. I'm not expecting a boom. I expect unemployment to still be about 9 percent a year from now. . . . But I expect recovery will then be sustained, if Federal Reserve policy, lowering interest rates, is also sustained.''
* On taking away the independence of the Federal Reserve: ''No. I'm opposed to that. There might be better coordination of policy. But I would not want the Fed to be made subservient to either Congress or the President.''
Treasury Secretary (Donald T.) Regan says that ''full employment'' now should be 61/2 percent instead of the 4 percent we have used for so many years. What do you say to that?
I'm at 51/2 percent (for full employment today), one full percentage point below Regan. And that one percentage point comes to more than 1,000,000 workers. (Heller said that work programs could push unemployment down below 61/2 percent).
Your long-range view on the economy?
I think the horizon will brighten considerably for the United States after 1985-86, partly for demographic reasons. There is a seasoning of the enormous influx of workers into the labor force. There was a 20 percent expansion in the labor force in the 1970s. They will become more productive. The (President's) stimulation to investment will work. The skies will brighten up if we can hang on and survive.
If (Reagan) is reelected, he will luck out into a considerably improving situation.
World trends are working in our favor (including energy prices). This will not solve all our problems. I am not a polyanna.