Demystifier of The Dismal Science

By GEORGE J. CHURCH

Presidential Candidate John F. Kennedy was dubious. Said he to the obscure University of Minnesota professor: "They tell me you're an economist, but you're the first that I've met from outside Cambridge, Mass." Kennedy, however, quickly got over his hesitation about accepting advice from someone unconnected with either Harvard or M.I.T. Walter Heller was so persuasive -- and so adept at translating economic jargon into everyday language -- that the whole nation came to listen, and profit. When he died last week of a heart attack at 71, he had been out of Government office for 23 years, but his high- pitched Midwestern twang still rang loud in every debate over economic policy, commanding the respect even of Republican economists who disagreed with his Democratic Keynesianism. Says Alan Greenspan, chairman-designate of the Federal Reserve Board and Heller's longtime colleague on TIME's Board of Economists: "Walter was clearly one of the giants of economics in the post- World War II period."

When Heller took over as chairman of the Council of Economic Advisers at the start of the Kennedy Administration, the U.S. was just beginning to climb out of a slump. Fearing the recovery would be insufficient, Heller developed the idea of measuring the economy's performance not against past figures but against what it might reach while growing at full potential. That idea has long since become axiomatic for policymakers, but in 1961 it seemed radical. Heller believed such growth required a cut in the then towering income tax rates that in his view were strangling expansion -- and never mind that the budget was already in deficit. It took more than a year for Heller to convince Kennedy and two more years before a skeptical Congress came around. But once the tax cut was passed in 1964, the economy entered what now seems to have been a golden age. The upturn that began in 1961 continued for 100 months, still a record, while unemployment shriveled and inflation remained low.

Heller, however, was no doctrinaire expansionist. After leaving office in 1964, he saw clearly the danger of resurgent inflation in an overheated economy and tried vainly to persuade Lyndon Johnson to raise taxes again to pay for the Viet Nam War. Though he lost that round -- and had to watch while war-driven inflation soared -- he retained his influence as a professor, an inveterate witness before congressional committees and a counselor to Democratic politicians.

A native of Buffalo, the tall (6 ft. 4 in.) Heller earned his Ph.D. at the University of Wisconsin and got his first exposure to Government as a Treasury Department economist during World War II. Throughout his career, Heller showed a genius for putting economic analysis into simple terms. He was the first to speak of "fine-tuning" the economy, and in January he described the current expansion as "halting, hesitant and haunted" by budget and trade deficits. Another trademark was his gentle wit, which often turned self-mocking. While serving in Kennedy's Camelot, he chided the public for its "Puritanical" belief in rigidly balanced budgets. When that gave rise to a classic wisecrack, "I'd rather be a Puritan than a Heller," no one repeated the gibe more happily or laughed harder than Walter. The self-deprecation, however, could not disguise his contributions. Says Paul Samuelson, the Nobel laureate who recommended him to Kennedy: "The American economy, no matter where it goes from here, is permanently different because of the Camelot years and the changes Walter helped make."

With reporting by Bernard Baumohl/New York