Ivied Council

With a staff of 45, a 25-room operational headquarters, and an annual operating budget of $830,000, the White House Council of Economic Advisers would seem by Washington standards to be little more than a bureaucratic nodule. In fact, the three-man agency is one of the nation's most crucial nerve centers, daily furnishing the President with electrocardiographic readings on the economy and providing its own prescriptions for fiscal and monetary policy.

As CEA chairman for more than three years, Gardner Ackley has enjoyed a special presidential confidence, conferring constantly with Lyndon Johnson, working seven days a week, as many as 14 hours a day. Eighteen months ago, the former University of Michigan economics professor mentioned to the President that he was anxious to return to academic life, but Johnson persuaded him to remain through the preparation of the council's 1968 economic report.

Uneconomic Post. Last week, with the report almost ready for presentation, Ackley, 52, was at last free to go--but not to academe. Johnson appointed the dry, retiring economist the new U.S. Ambassador to Italy. He will replace Frederick Reinhardt, a career diplomat who, after more than six years in Rome, is overdue for rotation. Ackley, who could have accepted any one of several university presidencies and looked forward to a handsome six-figure income, will be taking on a $37,000-a-year diplomatic post that will force him to dig into his own shallow pocket to maintain the style that protocol demands.

His successor as CEA chairman was as predictable as Ackley's own appointment was surprising. The President named three-year CEA Member Arthur M. Okun, 39, an inventive New Economist--and firm advocate of the Pres ident's proposed tax increase--who will restore to the post some of the openness and articulateness that Walter Heller displayed before Ackley's tenure. A prodigious "numbers man," Okun is something of a federal prodigy, the youngest ever to hold the CEA chairmanship. As one awestruck friend observes, "Okun could and did do everything the whole Treasury and the entire Budget Bureau could do--and on the back of an envelope."

Inheriting Okun's present seat on the council will be another prodigy of sorts --Merton Peck, 42, a former member of the McNamara whiz-kid team that reorganized the Pentagon in the Kennedy years. Peck is now the chairman of Yale's economics department, and Okun is a former Yale economist. The third council member, James Duesenberry, is a Harvard man. Together, for all the stereotype of Johnson's Texas Establishment, they will give an Ivy League patina to the agency.

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