Edie's New Mind & Manners

Investment-counseling firms often seem to wield a power far out of proportion to their size. Bankers, business leaders and bureaucrats pore over their forecasts. Pension plans, trusts and mutual funds sometimes swing on their recommendations. And while no one claims that they can change the economy, they sometimes come close--simply by changing their own economists. Last week one of the leading consultants, Manhattan's Lionel D. Edie & Co., ordered just such a switch.

Out With the Aura. To take over its top titles of chairman and chief economist, the firm chose James O'Leary, 52, longtime, well regarded research chief of the Life Insurance Association of America. For Edie, which manages funds worth roughly $2 billion and includes the Guggenheim Foundation, R.C.A. and Sears, Roebuck among its clients, the appointment promises a change in manner as well as mind.

For most of the past five years, Edie's No. 1 man has been voluble, Canadian-born Pierre Rinfret, 44. Rinfret, according to his own associates, never did "exhibit a large aura of humbleness." Nor did that aura grow after President Johnson, during a 1964 TV address, called him "a leading industrial economist" and reeled off figures from a bullish Rinfret forecast. Since last summer, Rinfret has been on the side of the bears, predicting a "mild recession" with no upturn in sight until at least the fourth quarter of 1967.

As it happened, Rinfret's relations with Edie soured along with his own views of the U.S. economy. Three months ago, Rinfret left Edie amid rumors of an abrasive management struggle. Now head of a new partnership, Rinfret-Boston Associates, he denies the strife stories, says he was simply eager to "have my own operation."

Modulation & Moderation. Whatever the reasons for the falling out, Edie will now speak with a considerably more moderate--and more modulated --voice. A onetime Wesleyan University economics professor, O'Leary has been critical of what he considers to be Administration errors, such as the failure to order a tax increase last year. But he admits to being "nowhere near as much of a bear" as Rinfret. Moves to ease credit and to restore the 7% investment tax credit, he says, should help bring on "a change from a mood of moderate pessimism to optimism." And if still more stimulus is needed, O'Leary is confident that the Administration "will find that it does not need the 6% tax surcharge."

In fact, O'Leary asserts that "if the Government follows reasonably appropriate policies, some of the things that it is already doing will strengthen the economy, and we will see a rise in the second half of this year." All of which may run him the risk of getting the next presidential TV encomium.

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