The McGovernomics Men

JUST over a year ago, George McGovern asked a group of liberal economists to an all-day meeting in Manhattan. The Senator said that he was determined to shed his image as a one-issue candidate and take firm positions on matters other than the war. He was especially eager to bear down on the then-flaccid economy. In effect, McGovern asked the group to become his economic brain trust.

Their counsel led to McGovern's economic program, which has long since surpassed his end-the-war stand as the real issue this year. McGovern's plan to raise taxes drastically on corporation profits and upper-middle and high incomes has so terrified investors that almost no big-money Wall Streeter has yet publicly contributed to his campaign. His income-redistribution idea, which would provide federal grants to poor, has been branded irresponsible by some fellow Democrats.

The small troupe of men who supplied the powder for McGovern's bombshells so far have generally been a youngish, Ivy League crowd who have solid respect among their colleagues but are not widely known to laymen. Their strongest bond has been the noneconomic preoccupation of ending the war. Several worked for Robert Kennedy or Eugene McCarthy in 1968, and nearly all agreed to work for McGovern primarily because of his views on Viet Nam. On economic matters, they are considered advance-guard liberals who favor a steady and perhaps wrenching move toward economic equality. All zealously deny that either they or their programs are truly radical, arguing that most of their theories have been taught in the classroom for years.

A few of McGovern's less active advisers are economists with worldwide reputations, including Harvard's John Kenneth Galbraith and Yale's Robert Triffin. Many other of the Democrats' well-known economists will eagerly offer their expertise if McGovern wins the nomination this week. But McGovern's new New Economists have shaken up the old-line Democratic economic establishment of Kennedy-Johnson vintage and have catapulted themselves into prominence. However their candidate fares this week--and in November--they will have no small influence on debates over public policy in the years ahead.

A who's who of McGovern's inside advisers:

EDWIN KUH, a 47-year-old professor at M.I.T., has been group captain since last June's meeting. An economic adviser to McGovern during his 1968 presidential mini-campaign, Kuh continued to send memos to the Senator after the last election. Since then, Kuh, a critic of business, has made major contributions to McGovern's tax-reform and income-redistribution plans. He has also been in charge of recruiting new talent; so far at least 25 economists have funneled ideas to McGovern. Widely admired as an economic technician, Kuh nonetheless has had little experience with the realities of drafting public policy, and becomes somewhat abrasive when his theories are questioned. As a result, some economists outside McGovern's camp speculate that he might be gently dislodged from the top spot before the campaign. Even if that happens, McGovern might well offer Kuh a high economic post in the event he becomes President.

ROBERT EISNER, 50, a professor at Northwestern, is McGovern's economic adviser of longest standing. An advocate of tougher corporate taxation, Eisner persuaded McGovern to criticize the 7% investment credit and accelerated depreciation--both put through by Nixon last year--as giveaways to business. He is one of the few liberals who argue that the same programs, when passed by Democratic Administrations in the '60s, did not provide the intended economic stimulus. Eisner has urged McGovern to go even further than he has in advocating a reduction of tax benefits for businesses and upper-middle income groups, arguing that "there is a limit to how much money one needs." The graying economist is in a stronger position than most to press his views on McGovern; Eisner is an Illinois delegate to the Democratic Convention.

LESTER THUROW, 33, also an M.I.T. professor, is one of the brightest and fastest rising of the U.S. economic Wunderkinder, and he is the thinker behind McGovern's campaign against accumulated wealth. Largely on the basis of Thurow's research into U.S. income distribution, which showed that 2.5% of the U.S. population owns 45% of all private assets, McGovern recommended extensive changes in inheritance taxes, including a suggested 77% tax on bequests exceeding $500,000. Says Thurow: "It used to be that you had to manage your own fortune, and you could lose it. Now you can have a bank manage it. Without a natural corrective, we need something like a potent inheritance tax." Thurow has also occasionally brushed back his randomly distributed blond curls to act as a McGovern emissary to the business community. A former Rhodes scholar, Thurow bicycles daily to work from his home in Roxbury, Boston's black ghetto, where he dispenses volunteer financial advice to neighborhood businessmen.

JAMES TOBIN, 54, the holder of Yale's Sterling Chair of Economics, is the group's intellectual giant and the economist who has most influenced McGovern personally. A member of the Council of Economic Advisers during the early Kennedy years, Tobin became one of the first advocates of giving minimum-income grants to the poor through the tax system and advanced a program along those lines in the Brookings Institution's widely discussed 1968 book, Agenda for the Nation. Tobin believes that income redistribution should be financed by enlarging the personal income tax base through the elimination of personal exemptions and standard deductions, and by including income that is now sheltered from taxation, such as capital gains. Tobin is esteemed by his peers, who elected him president of the 18,000-member American Economic Association for the 1971 term. A soft-spoken and shy scholar who describes himself as "an ivory-tower economist," Tobin is expected to stay out of Washington if McGovern wins, but he could wield considerable clout from the campus.

MARC ROBERTS, 29, is an associate professor at Harvard and a close friend of both Thurow and Kuh, who helped recruit him. A specialist in the economics of pollution control, Roberts has also worked on figuring the costs of McGovern's "conversion" program--the job retraining and unemployment payments to defense workers that will be necessary if the Pentagon's budget is cut by $32 billion, as McGovern proposes. Roberts is hardly a youthful radical. One reason that he likes McGovern, he says, is that the Senator "has absorbed the lesson of the past 20 years that a big Government bureaucracy may not be the answer to our problems."

RAY FAIR, 29, a Princeton assistant professor, has focused primarily on providing McGovern with short-term forecasts of the economy's performance and drafting full-employment plans. Along with fellow Princetonian William Branson, he is the author of the Senator's proposal for a $10 billion pump-priming infusion of federal funds into public projects that would, according to their projections, lower the unemployment rate from 5.5% to 4% or less. Brisk and talkative, Fair has been gratified to see many of his memos appear almost verbatim in McGovern's speeches and congressional testimony.

GORDON WEIL, 35, while not an economist (he holds a Ph.D. from Columbia in government), is the liaison between the candidate and his advisers. Some of the latter complain that Weil shielded McGovern too tightly from their thoughts--including their second ones on how much some programs might cost--with the result that the Senator has had to retreat from much of his original arithmetic. Weil admits that while drafting the widely criticized April summary of McGovern's economic positions, "I did not expect it to be subject to this kind of scrutiny." Nevertheless, he maintains that "we have been as specific as anyone is" in the early stages of a campaign. A onetime press spokesman for the Common Market headquarters in Brussels, Weil is agreeable to comparisons between McGovern's program and the largely managed economies of Western Europe. "Subconsciously I was prepared to accept and articulate this program because I learned my economics in Europe," he says. Should McGovern be elected, those comparisons would become suddenly more relevant to the New World.

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