Just Plain Bill

Bill Miller has a noxious problem. The Federal Reserve chairman is a non-smoker in a crowd of the heaviest puffers north of Winston-Salem. Treasury Secretary Mike Blumenthal is constantly chewing on Jamaican cigars. Treasury Under Secretary Anthony Solomon is inseparable from his pipe. Council of Economic Advisers Chairman Charles Schultze chain-smokes cigarettes. When near them, Miller sits in tolerant agony. But at the nation's central bank, Miller is very much in charge. Around the Federal Reserve's board room, which long was redolent with the fumes from Arthur Burns' briar, new black signs proclaim THANK YOU FOR NOT SMOKING DURING MEETINGS OF THE BOARD, and ashtrays have been removed.

Miller has moved into Washington with much command and in some two months he has brought to the board a new flexibility and crispness. Says one staffer: "We can't keep up with him. He's an electric mosquito." The former Textron Inc. chairman roams the Fed's cold marble halls at a slow jogger's pace, thrusting out his hand to someone he does not know and saying, "Hi, I'm Bill Miller." He signs memos "Bill," calls almost everyone at the Federal Reserve by his first name, and works in shirtsleeves.

Board meetings, which under Burns started an academic quarter-hour late and dragged on like the flu, now begin promptly when Miller's digital watch shows the scheduled hour, then move quickly from issue to issue. One meeting lasted a record-short ten minutes. In 30 minutes two weeks ago, the board confronted and resolved four items of bank regulation. At another meeting, members agreed to permit transfers of money from savings to checking accounts, an issue that had been hanging around for two years. The vote was 6 to 0 -- but only after Miller, a clever compromiser, crafted some changes that broke a 3-to-3 tie.

The chairman's activism was clearly seen in the board's decisions to allow the federal funds rate to rise twice in little more than a week, as well as to lift the discount rate to 7% last week. Interest rates will climb as a result, making Miller a handy target for White House staffers and politicians. Stuart Eizenstat, President Carter's chief domestic affairs adviser, complained that the Reserve's moves on interest rates "aren't ones we have asked for and aren't ones we have applauded." Wisconsin Democrat William Proxmire, the Senate Banking Committee chairman, who cast the sole negative vote against Miller's nomination, groused that the federal funds advance was wrong because "the economy is not at a point where restraint is appropriate." Investors have shown no such concern. The born-again stock market, say some Wall Streeters, is the "Miller market."

Miller favors slightly tighter money and a bit less economic growth to wrestle down inflation. But he told TIME Washington Correspondent George Taber: "If curbing inflation is left to monetary policy alone, then we have very serious dilemmas. My priority has been to call attention to a coordinated effort by Congress, the Administration and the Federal Reserve." That is why he was the first major policymaker to urge a delay in Jimmy Carter's proposed $25 billion tax cut, a position vindicated when the President agreed to make the cut smaller and later.

Miller foresees no disabling problems with the White House. "We're working in harmony," he says. "But we're independent, and we will take our actions. We won't always agree 100%, but the ability to communicate will result in a common front against inflation."

The prudent actions on money have so far earned high marks from bankers and businessmen. He is widely regarded as one of Carter's best appointments in an Administration that has more than its share of second-raters. But a shadow of sorts hangs over even Bill Miller. While he was Textron's boss, its Bell helicopter division paid off foreign officials and influence peddlers to boost sales. Miller insisted during his confirmation hearing, and again last week, that the payments were made by lower managers without his knowledge. The Securities and Exchange Commission is investigating, and Miller stands to be absolved.

In the meantime, he presses ahead on what is surely the toughest chore of his career: using the Federal Reserve to slow the economy gradually without dipping it into recession. As Oklahoma-born Miller, who is part Indian, puts it, "We want to go through this narrow pass to the wide open space on the other side without an arrow touching us."

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