A Tough Act to Follow

To the L.B.J. ranch from London last week came a telephone call for President Johnson. The caller was Walter Heller, 49, chairman of the President's Council of Economic Advisers, who was reporting in after a Paris meeting of the Organization for Economic Cooperation and Development. During their conversation, the President asked whether Heller would reconsider his decision to leave the Government. The answer was still no.

Months ago, Heller had decided to return to the University of Minnesota's economics department, where he was when Hubert Humphrey brought him to Washington in 1960 to meet newly elected John Kennedy. Heller delayed his departure until after the election, but now he was determined to go.

To succeed him, Johnson named Gardner Ackley, 49, a former University of Michigan economics professor who has been a member of the Council of Economic Advisers since 1962. To fill the vacancy left by Ackley's move up, Johnson picked Arthur Okun, a Yale economist and since 1961 a CEA staff member.

In with Influence. Heller's will be a tough act to follow. He was certainly the most influential chairman in CEA history, and probably had the presidential ear as exclusively as any other single economist in U.S. history. It was Heller who, over the initial objections of Treasury Secretary Douglas Dillon, successfully argued President Kennedy into backing a tax cut. And it was Heller who in effect changed the nation's economic course by winning first Kennedy, then Johnson, over to the philosophy of deficit spending as a stimulant for a sluggish economy.

If anything, Johnson embraced Heller's beliefs even more aggressively than Kennedy. He has already assigned a task force to study a Heller scheme to turn over a fixed amount of federal in come-tax money to states and localities to keep the boom booming. This would mean taking money from upper-income groups and states and giving it to poorer ones, and while that plan may never come to pass, it is indicative of the economic line fathered by Heller.

Out While Ahead. But Ackley is every bit as activist and liberal as Heller. He is recognized as the CEA's expert on domestic monetary policy, was one of the leaders in urging Kennedy to attack the balance-of-payments deficit by imposing an interest equalization tax. He can be expected to fight for the maintenance of present wage-price guidelines, work for continued easy credit, try to devise new means of reducing unemployment, and in general follow the blueprint of his predecessor. But he is cautious about predictions and somewhat wry about his promotion. "Walter had enough sense to get out while he was ahead," he says.

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