Rise of the Role Model

By Marshall Loeb

Of all the shallow, sexist questions put to Marina von Neumann Whitman, the one about the gerbils infuriates her most. How did the family gerbils like the trip from Pittsburgh to Washington when she served on the President's Council of Economic Advisers in 1972-73? Macho editors, who would never put such a question to a man, still send women's page reporters to interview her, and well-meaning businessmen still give her head-patting lectures to explain balance sheets. Whitman smiles at the condescension and responds with her ultimate putdown: a stunning soliloquy on international economics.

She can laugh because she has arrived. She is no longer merely the precocious daughter of fabled Mathematician John von Neumann, or just the Radcliffe summa who became the first of several modern women to break into high economic policymaking in Washington. A happy wife and mother of two, Whitman, 43, frames corporate policy as a director of Westinghouse, Procter & Gamble and the Manufacturers Hanover bank, conducts a weekly TV economics program, teaches at the University of Pittsburgh and travels everywhere advising officials on the global economy. Says Whitman: "I've advanced from a freak to a role model so fast that it sometimes leaves me dizzy."

Her specialty is in demand these days because the dollar is under intensive care, and everybody asks her how it will fare. Not badly, replies Whitman. Because it is still undervalued, prices of U.S. exports are down and prices of imports are up--and people do respond to price changes. Look at the drop in Datsun and Volkswagen sales in America, she says, and at Detroit's unaccustomed competitiveness in foreign markets. In time, the U.S. will repair its trade balance if--a big if--it can keep inflation from eating away its improved competitive situation,

The dollar's decline was accelerated by hard-headed investors, primarily corporations and banks, that have been hedging their positions in money markets. "The line between hedging and speculation is pretty thin," says Whitman. Yet she believes that corporate moneymen will rush to buy dollars as soon as they become convinced that the U.S will stick to a clear-cut economic policy. In Whitman's view, the Administration's dollar-revival plan consists of one Band-Aid and one magic bullet. The move to big intervention-selling gold, buying dollars--will barely patch a scratch. But the shift to tighter money, she believes, will be the real cure for the dollar's debilities. The trouble is, the early side effects will be bad: higher interest rates, which lead to higher prices for a while. In time, however, the stringent money policy will force inflation down and push the dollar up. What scares Whitman is that the turn to a more stable world monetary system may not come soon enough. People may panic and retreat behind walls of protectionism. Says Whitman: "There is an increasing sense that the postwar dream has failed, and that the only hope is to form regional trade blocs, with every bloc for itself." Europe's Common Market is one of the great imaginative ideas of the 20th century, she continues, but right now the Europeans are debating whether to turn inward or outward.

Protectionist pressures may intensify because South Korea, Hong Kong, Taiwan and Singapore are becoming new Japans. Their advances have been nurtured by the West's aid, so it would be doubly tragic if the West tried to throttle them with tariffs and quotas. If protectionism bursts out, Whitman warns, "the worst casualties would be the least well-off countries. The industrialized countries would muddle through. But all economies would grow more slowly, and that would exacerbate the issue of income distribution. It's a lot easier to redistribute a growing pie than a stagnant one,"

Yet her native optimism persuades Whitman that sense and sanity will ultimately prevail. She is hopeful that the world trade negotiations, now grinding slowly in Geneva, will reach a creative conclusion by their Dec. 15 deadline. Such talks are a classic chicken game, and nothing is ever decided until the last 24 hours. What happens in the final hours may well determine whether the world economy springs ahead or merely limps along in the 1980s.

And what ever happened to those gerbils? They weathered the trip nicely, thank you. So did their mistress.

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