Government: Trouble After the Party

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It was nearly as risky as inviting Hedda Hopper, Sheilah Graham, Lolly Parsons and Dorothy Kilgallen to tea together, but Chief Economic Adviser Walter Heller thought he could pull it off. For months he worked to arrange an unprecedented meeting of four past chairmen of the Council of Economic Advisers with President Johnson. Though economists are a notably proud and prickly lot, Heller felt that the meeting would indicate that the former chairmen generally support the major points of the Administration's economic policy, and he hoped that acrimonious debate could be avoided. Last week President Johnson joined Heller and Economic Advisers John Lewis and Gardner Ackley in the Oval Room to welcome the four past chairmen: Republicans Arthur Burns and Raymond Saulnier, who were Dwight Eisenhower's men, and Democrats Leon Keyserling and Edwin Nourse, who worked under Harry Truman.

More Desirable. Everything went smoothly at first. Sitting in his rocker, his feet on a footstool, Lyndon Johnson was at his best. He deftly mentioned that he had looked at a recent speech by Burns, prominently displayed a copy of Keyserling's latest economic tract on monetary policy, and at one point replied to an expression of optimism by Saulnier by saying: "Mr. Saulnier, you're making this nomination seem more desirable all the time." Basking in this euphoria, the visitors generally agreed that the economy's short-term prospects did indeed look good.

The meeting lasted 45 minutes, and the trouble began as it ended. To the surprise of Republican Burns, who had presumed that the session would be unpublicized, Johnson proposed that the press be briefed immediately. As if on signal, reporters and cameramen rushed in. Burns refused Heller's request to join him in the briefing, and Heller went on to say that the main note of the meeting had been "a general feeling of broad consensus." Since this seemed to imply a general consensus in support of the Administration's economic policies, Burns and Saulnier felt that they had been used for electioneering purposes. Snapped Burns later: "Mr. Heller spoke of a consensus where none existed. The reporting of this meeting violated every professional code—and when that happens to me, I'm independent enough to get damn mad."

Not on the Bandwagon. In fact, although Burns had agreed that present fiscal policy is "sound," he warned the President that he was tampering with the free market in ways that "could seriously injure the economy," also suggested some tightening of credit to head off inflation. "Steve" Saulnier believed that it was far too early to measure the final results of the tax cut—but Heller told the press that the visitors had agreed that the cut has been a success so far. Later, Saulnier said: "I don't think any of us are being served very well by continually being told that everything is hunky-dory and that we're all on the same bandwagon." The Johnson wagon may be moving smoothly, but not all the economists have hopped aboard.