The Kind of Guy the President Likes

Alfred Edward Kahn is obviously a gambling man. The outgoing chairman of the Civil Aeronautics Board says of his new job as anti-inflation chief: "The chances for success are far less than what I had [at the CAB]. I think we're dealing with something that's a hundred times more important, but the chances of success are one-thousandth."

If anyone can beat those odds, it may be Kahn. In just 16 months at the CAB, he shredded red tape into confetti, largely deregulated the nation's airlines and restored healthy competition along with lower fares. Economist Kahn is such an impassioned deregulator that he promoted the liquidation of his own empire. He supported a bill that will weaken the powers of the CAB and phase it out of existence by 1985. Said he: "I will consider myself a success in this job if there is no job when I leave it."

His independent attitude has impressed his boss. "He is the kind of guy the President likes," remarked one Cabinet member. Says Kahn: "He is the President and has the right to make a judgment, and I have the right to disagree with it, which I do." One time, the CAB had recommended giving Pan American World Airways nonstop flights between Dallas-Fort Worth and London. Carter awarded the route to Braniff Airways. Kahn publicly disputed the ruling and considered resigning. "Then I counted to 24," he recalls, "and decided to stay because I was having such a good time." Kahn's wit makes his independence easier to take. During one meeting he snapped, "Every two minutes I feel like telling Pan Am to go to hell." Later he quipped, "I want to make clear that I was not offering Pan Am a new route."

Kahn, 61, was influenced in his choice of a career by the Great Crash. "I went into economics," he says, "because the world was suffering from catastrophic depression." The experience did not make him a partisan of Big Government; it convinced him instead of the strength of free enterprise. After a boyhood in Paterson, N.J., he graduated summa cum laude from New York University and earned his doctorate in economics at Yale. He started teaching at Cornell in 1947, and has remained on the faculty ever since.

In the mid-1950s, Kahn, a registered Democrat, served on the senior staff of President Eisenhower's Council of Economic Advisers. From 1974 until his appointment to the CAB, he was chairman of New York State's Public Service Commission. Under his direction, the PSC allowed telephone users to hook up their own equipment to the Bell system and permitted utility companies to set different electric rates depending on the time of day. As Kahn advised his CAB successor, Marvin Cohen: "Understand how a free market works and restrain one's tendency to meddle."

Kahn never seems to neglect his work for more than a moment or two. Whenever he gets into a plane or car, he starts scribbling something. Occasionally he gives the impression of a slightly manic professor as he strolls about in his stocking feet, commenting on whatever comes into his mind. But he also appears to have no trouble relaxing at his Washington home, where he lives with his wife, Mary, a silk-screen artist; they have three children. Kahn swims, skis, jogs and likes to sing Gilbert and Sullivan tunes. A certain whimsy is often on display. In a memo he once urged his staff to avoid gobbledygook and write "as though you are talking to or communicating with real people. I have heard it said that style is not substance, but without style what is substance?" Kahn concluded: "A final example of pomposity, probably, is this memo itself."

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