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The Activist. In analyzing the stock market decline, Administration spokesmen failed to mention one factor that seemed important to many outsiders: business men's lack of confidence in the Kennedy Administration. The harshness of Kennedy's attack on steel staggered many businessmen—and stockholders. But the Administration could reasonably argue that the distrust was unjustified. In economic policy, the Administration has taken positions that many businessmen can applaud. Confronted with the gold outflow and the need to increase U.S. exports, the New Frontier has firmly committed itself to price stability. Rejecting labor leaders' arguments that higher wages are needed to increase consumer demand and spur economic growth, the Administration agrees with business that the economy's essential requirement for faster growth is expanded capital investment. To speed up capital investment, the Administration has sent Congress a proposal to grant business firms a special tax credit on expenditures for equipment. And the Treasury is currently working on revised depreciation schedules, to be released in July or thereabouts, that will permit business firms to write off the cost of equipment over a shorter span of years.
Yet the wariness that many businessmen feel toward the Administration—and toward Heller—does have some basis in reality. Like some other New Frontiersmen, Heller sometimes arouses suspicions that he is overly solicitous toward the economy, too much inclined to activism. His activist tendency traces back to the circumstances in which he decided to become an economist. The time was the early years of the Great Depression. "The Depression," says Heller, "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."
Smothered Freedom. Heller became a do-something-about-it economist. Says the University of Chicago's Economist James H. Lorie, a conservative who greatly respects Heller: "Broadly, the economists fall into two groups. There are those who feel they know what a wage settlement should be, what a price level should be, what controls the Government should exercise over the economy. There are those, on the other hand, who feel we do not know well enough the intricate workings of the economy to be able to intervene and achieve a precise result, who feel that the forces of the economy should be left in free play, letting the market place make the necessary decisions and corrections. Mr. Heller belongs to the first group." A California banker puts it more bluntly: "Heller is a competent economist, but his thinking isn't oriented toward free enterprise. I object to his basic attitude that everytime something lags, Uncle Sam should step in."