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One result has been a waning of controversy among economists. Today, says Kenneth Arrow, "you have to find a real crackpot to get an economist who doesn't accept the principle of Government intervention in the business cycle."
Walter Heller exemplifies the softening of past liberal-conservative conflicts. Items:
¶ A decade ago economists identifiable as liberals were automatically prolabor, rejected the idea that wage increases could be economically harmful. Today Heller, like most other economists, holds that "excessively generous wage bargains'' between unions and management can lead to "cost-push" price upcreep.
¶ Preservation of the 4½% interest rate ceiling on long-term U.S. Government bonds is still an article of faith among liberal Democrats in Congress, but Heller calls the ceiling a "nostalgic" relic, wants Congress to abolish it so as to give the Treasury more flexibility in managing the national debt.
¶ Heller advocates a radical program of tax reform, but conservatives could well support it. He wants to lower the federal income tax rates from the present range of 20%-91% to 14%-60% and abolish virtually all loopholes and preferential deductions. Heller considers the present income tax structure not only inequitable, but uneconomic too: it impedes economic efficiency by distorting economic decisions. Thorough tax reform, he believes, would improve the U.S. economy's overall efficiency.
The Jugular Area. Born in Buffalo and raised in Milwaukee, Walter Heller early decided on the shape of his career: "I wanted to combine the academic background with public service." He acquired a respect for learning and for public service from his German-born father, a civil engineer whom Heller recalls as an ''immensely wide reader. As a child I took for granted a range of parental information that as a parent I have never been able to live up to myself. My father knew the answer to every damn question a kid could think of."
Heller's decision to become an economist was a direct result of the Great Depression. "The Depression," he says, "attracted some of the best young minds into economics. Those of us who were growing up then saw the economy flat on its back. To explain why, and to try to do something about it, seemed a high calling. At the same time, we saw the first great influx of economists onto the Washington scene. Economics had become the exciting, the important profession."
After getting his A.B. from Ohio's Oberlin College, Heller went to the University of Wisconsin for graduate study, there married a fellow student, a professor's daughter named Emily Johnson. Three years later, they got their Ph.D. degrees (hers in physiology) on the same day, "about seven seconds apart." Heller observes that their first child (they have three) was not born until after they won their degrees. "That proves how essentially conservative I am," he says.
As his graduate specialty Heller chose finance and taxation. "It seemed to me the critical area, the jugular area, of Government economic policy." Heller has remained a "policy-oriented" economist. His career has been a shuttling back and forth between the university campus and Government bureaus.