Clinton's People

By DAN GOODGAME CAMBRIDGE

Robert Reich wrote and directed his first play in the ninth grade, and since then he has seldom strayed from the footlights: as a 26-year-old lawyer arguing before the U.S. Supreme Court; as a popular lecturer in political economy at Harvard; as a best-selling and prolific author and essayist, television commentator and corporate consultant. Built like a jockey (4 ft. 10 in. and wiry) and bursting with humor and energy, Reich could always attract and hold an audience, even when playing honky-tonk piano for friends on weekends. And for the past 24 years, he has won some of his loudest applause from a friend named Bill Clinton, who campaigned for the White House on an economic plan framed around Reich's ideas for creating good American jobs in the new global economy.

Clinton's election to the presidency offers Reich the biggest stage yet on which to audition both his ideas and his clever showmanship. The President- elect last week summoned Reich from Cambridge, Massachusetts, to Little Rock, Arkansas, to lead the transition team that will help him choose his economic personnel, organization and policies. In an interview Reich insisted that it would be "wrong to presume" that he would have any position in the new Administration. But other Clinton advisers fully expect that the new President will want Reich -- probably as domestic-policy adviser or head of a new Economic Security Council.

Clinton and Reich met on an ocean liner in 1968, when they were on their way to study at Oxford University as Rhodes scholars. They grew closer after Reich, miserably seasick, opened his stateroom door to find Clinton standing there with chicken soup and crackers, determined to nurse him back to health. Ever since, the two, along with mutual friends from Oxford, have participated in an on-and-off, two-decade "conversation" about how America and its economy should be governed. "Bill has had all of my books inflicted on him," Reich says, "and has done me the honor of actually reading and commenting on them."

Reich's latest book, The Work of Nations, published last year, was particularly influential on Clinton and other Democrats who wanted not only to divide the economic pie more equitably but also to get the pie growing again. In a reversal from his earlier writings, which favored federal aid to emerging industries, Reich now writes that in the new global economy -- where capital, factories and technology move freely across international borders -- it makes little sense for Washington to aid particular industries or to shower tax breaks on wealthy investors. Businesses only take their government favors and use them in countries where labor is cheaper or where stock-market returns are more attractive.

In this new global economy, Reich writes, it matters little whether a company is based in London or Los Angeles. A Honda built in Ohio may have more "domestic content" than an Oldsmobile. The only policy that will benefit all Americans, Reich writes, is for Washington to "invest" in the two assets that won't leave the country: "human capital," such as education and job training; and physical infrastructure, from roads and bridges to high-speed railroads and fiber-optic communications. Such public investments, Reich argues, will encourage both U.S. and foreign firms to create jobs in America. How would Reich finance these expensive new investments? By raising taxes on the wealthiest Americans and cutting defense spending.

These themes are familiar, of course, to anyone who heard even a snatch of a Clinton campaign speech. While other economic advisers, particularly Robert Shapiro of the Progressive Policy Institute and corporate consultant Ira Magaziner, contributed heavily to the lyrics of the Clinton economic plan, most agree that the music came straight from Reich. Says John Isaacson, founder of an executive-search firm in Boston, and a friend of both Clinton's and Reich's: "The Work of Nations provided a conceptual framework for the whole campaign." Gene Sperling, economic-issues director for the campaign (and a former research assistant for Reich), goes further: "Bob is the person most responsible for how progressive Democrats talk about economic growth today."

Reich attracts both admirers and critics across the political spectrum. Andrew Kopkind writes in The Nation that the Reich-Clinton plan "does not touch the problem of a powerless, alienated and potentially disruptive work force." Conservatives, meanwhile, see Reich's call for more federal "investment" in education and infrastructure as merely an attractive new label for a bigger, more wasteful, more intrusive bureaucracy. Milton Friedman, the Nobel-prizewinning economist, predicts that the Reich-Clinton program "would destroy far more productive jobs than it would create, because it relies on more government spending and taxing." Jim Pinkerton, an iconoclastic Republican thinker who until recently worked in the Bush campaign and White House, says, "I agree with three-fourths of what Reich writes." But Pinkerton doubts that simply throwing more money at poorly run public schools will produce results, when neither Clinton nor Reich has embraced market-oriented reforms such as school vouchers.

The Reich-Clinton plan would also throw billions of dollars at new public- works projects without persuasively describing how it would keep the money from being wasted by lawmakers such as Senate Appropriations chairman Robert Byrd, who has made it his mission in life to pave his home state of West Virginia with federal office buildings and roads. Reich holds that "there is nothing wrong with being indebted so long as the borrowings are invested in means of enhancing our future wealth." But he agrees that some way must be found to "guard against pork-barrel spending."

Some of Reich's critics target him personally as a "self-promoter" and "pamphleteer" -- in part, no doubt, out of resentment of his productivity and fame. These chafe many economics professors because Reich, often described as an economist, does not hold a degree in that subject. He received his degrees at both Dartmouth and Oxford in interdisciplinary studies -- history, philosophy, politics, economics -- and earned a law degree from Yale. Despite * his decade of teaching at Harvard's Kennedy School of Government, Reich is not a tenured professor; nor, friends say, has he sought that title. With characteristic wit, he pens some of his correspondence under a letterhead proclaiming himself the "Thorstein Veblen Wizard of Political Economy." To the criticism that few of the insights in his books are original, friends say Reich considers synthesis as important as discovery. As he once wrote in another context, "Often, greater rewards flow to quick and clever followers than to brilliant and original inventors."

Reich was born in 1946 with a rare condition later diagnosed as Fairbank's disease, in which the lower spine fuses and the upper legs don't grow properly. In June he had to undergo painful surgery on his hip joints; when he was a child, the condition and his size kept him from participating in sports. But he compensated by writing and illustrating his own books (starting at age six) and with music and humor and theater. He grew up in South Salem, New York, about 40 miles north of Manhattan, the son of Republican parents who owned a pair of women's clothing stores.

A quick study and natural leader, Reich was elected student-government president at Dartmouth College. During the summers, he worked with inner-city youngsters, as an intern to Senator Robert Kennedy, as a campaign volunteer for Senator Eugene McCarthy. He met his future wife Clare Dalton, a Briton who now teaches law at Northeastern University in Boston, on his first day at Oxford. After returning from England and earning his law degree at Yale, Reich clerked for a federal appeals judge in Boston. He then worked for seven years in Washington, first as an assistant to Solicitor General Robert Bork, then at the Federal Trade Commission during the Carter Administration.

Reich and Dalton moved to Cambridge in 1981 and reared two lively boys, now 11 and 8. They also began swapping visits with their friends Bill and Hillary. The last time Bill Clinton stayed with Reich was in the spring of 1991, when President Bush was winning 80% approval ratings. Yet Clinton, chatting on the porch of Reich's big old Victorian home, nonetheless seemed determined to run against Bush. One reason, Clinton said, was to promote the ideas of investment in the future that were contained in The Work of Nations, which had just been published. A mutual friend, playing devil's advocate, raised several arguments why Clinton should not run, but Reich recalls with a grin, "I just sat there wagging my tail."