Economic Adviser to Kennedy and Johnson Dies
MINNEAPOLIS (AP) _ Economist Walter Heller, who advised Presidents John F. Kennedy and Lyndon B. Johnson and crafted the unprecedented 1964 tax cut that stimulated a lagging economy, has died of a heart attack. He was 71.
Heller was visiting relatives in Silverdale, Wash., about 20 miles west of Seattle, when he collapsed and died Monday night, said Kaaren Davis, his daughter.
A professor emeritus of economics at the University of Minnesota, Heller was chairman of the President’s Council of Economic Advisers from 1961-64. He continued as a consultant to Johnson until 1968.
″In Kennedy’s Camelot, he was chairman of the greatest team ever assembled,″ said Paul Samuelson, professor emeritus of economics at MIT. ″He was a great policy economist and a witty, phrase-making economist.″
″Walter Heller was one of the giants of economics,″ said Alan Greenspan, recently nominated by President Reagan to succeed Paul Volcker as chairman of the Federal Reserve Board.
Heller was also a forceful critic of the Reagan administration’s ″supply- side″ economic theory, calling it ″a fairy tale.″ He was especially critical of Reagan’s advocacy of a balanced-budget amendment.
″He brought to the fruitful policy level the findings of post-Keynesian economics,″ said Samuelson. ″Most of his criticisms of the Reagan years have been borne out by economic history.″
Heller advocated deficit spending to encourage economic growth, arguing that growth was more important than either balanced budgets or stable prices. He also supported sharing federal revenues with states.
″While I’ve been on the other side on many issues, he was as good as they come,″ said economist Arthur Laffer. ″He was a phenomenal economist. He was one of those few people who was capable of mixing politics, economics and business in a congenial brew. We’ll miss him very much.″
He was well known as an author, writing ″Monetary vs. Fiscal Policy″ in 1969 with Milton Friedman, and ″The Economy″ in 1976.
″This nation has lost a great resource,″ said Minnesota Gov. Rudy Perpich. ″Dr. Heller was an internationally respected economist, a fine educator and a truly great citizen.″
When Heller left his post with the Council of Economic Advisers in 1964, he was regarded as one of the most influential economists in history because of his close relationships to Kennedy and Johnson.
The lanky economist adapted easily to the pragmatic political program of the ″New Frontier.″
At the time of his appointment, Heller contended that the major problem facing the economy was its basic slack. As head of the council, he was a chief architect of Kennedy’s anti-recession program and of the economic messages the president sent to Congress in 1960 and 1961.
Heller believed that economic growth should be tied to ″increased investment in human capital through education, training and research.″ He backed the then-radical notion of linking wage and price increases to productivity gains.
Heller persuaded Kennedy to push for an unprecedented tax cut. Under Johnson, though there was a deficit, Congress passed a $14 billion income tax cut known as the ″Great Tax Cut of 1964″ that was credited with stimulating the economy.
In another book, ″New Dimensions of Political Economy,″ Heller recalled how he promoted the 1964 tax cut as a means of staving off recession when the cut was intended to close the ″gap″ between the economy’s actual and potential growth.
″In this case,″ he said, ″expediency may have been the mother of principle. ... Nothing succeeds like success.″
Born in Buffalo, N.Y., in 1915, Heller graduated from Oberlin College in 1935. He received his master’s degree in 1938 and his Ph.D. in 1941 from the University of Wisconsin. Barred from military service because of poor eyesight, he began work in Washington for the Treasury Department in 1942, where he helped design the withholding system for federal income taxes. In 1946, he joined the department of economics at the University of Minnesota.
He became known as a forceful and articulate teacher who often brought contemporary problems into the classroom. He became a full professor in 1950 and chairman of the economics department in 1957.
Throughout his career, he shuttled between government and the academic world.
He was a consultant to the United Nations, the Brookings Institution and the U.S. Census Bureau and a visiting professor at Harvard University and the University of Wisconsin.