Arthur F. Burns

Burns was an economist, Economic adviser and regulatr, US ambassador and propagandist.

Early life

Arthur Frank Burns was born in Stanislau, Austria, on April 27, 1904, the son of Nathan and Sarah Juran Burns. His parents brought him to this country when he was 10 and settled in Bayonne, N.J., where his father operated a small paint-contracting business.

Young Arthur worked his way through school as a postal clerk, waiter, theater usher, dishwasher, oil tanker mess boy and salesman. He graduated with Phi Beta Kappa honors from Columbia University in 1925 and received a master's degree the same year.

In 1930, while working for his Ph.D. at Columbia and teaching economics at Rutgers, Mr. Burns came to the attention of Wesley Clair Mitchell, perhaps the most eminent American economist of his day and the founder and principal luminary of the National Bureau of Economic Research.

While still pursuing his career in teaching, Mr. Burns began his lifelong study of business cycles at the bureau and became Mr. Mitchell's protege.

Mr. Burns, who remained a professor at Rutgers until 1944, succeeded Mr. Mitchell as director of research of the National Bureau and served from 1945 to 1953. In 1945, he also became a professor at Columbia University.

In Washington

Then, President Eisenhower, who while president of Columbia had met Mr. Burns, brought him to Washington. The political activity of members of the President's Council of Economic Advisers during the Administration of Harry S. Truman had turned Congress against the agency.

As chairman, Mr. Burns took the council out of politics and reconverted it into a general economics staff. It concentrated on giving technical advice and information to the President and on planning.

At the outset of his tenure he was faced with the minor economic contraction of 1953-54. In mid-1953, Mr. Burns urged President Eisenhower to spend more and tax less, with the result that the recession was relatively brief and mild. Restored Council's Prestige

After four years, Mr. Burns had restored the prestige of the council and won an established place for it in the Government. A nominal Democrat who had voted for Mr. Eisenhower, he achieved high respect from both parties in Congress.

By the end of 1956, Mr. Burns wanted to go back to research and teaching, and he returned to his professorship at Columbia. The National Bureau of Economic Research elected him its president.

When Mr. Nixon was elected President in 1968, he persuaded Mr. Burns to become his White House counselor as part of an understanding that Mr. Burns would be appointed chairman of the Federal Reserve when William McChesney Martin's term ended in early 1970.

At The Fed

During his brief tenure in the White House, Mr. Burns worked on a variety of projects, some unrelated to his economics background. He became Fed chairman on Feb. 1, 1970. In 1971, President Nixon, confronted by a mounting economic crisis, chose to impose full-scale wage and price controls while abandoning fixed exchange-rate values and ending the convertibility of dollars to gold. Mr. Burns, who had previously spoken out on the need to restrain wages, supported the wage and price controls but expressed doubt about ending the dollar-gold link.

Mr. Burns's most difficult time at the Federal Reserve came in 1974 and 1975. For the first time, his integrity was subjected to scrutiny, following a charge that he had made the money supply grow faster than was prudent, particularly in 1972, to aid President Nixon's re-election effort. In the elecpercent, compared with 6 percent durcreases were widely considered excessive.

Think tank land

After his departure from the Federal Reserve in 1978, when President Carter declined to reappoint him as chairman, Mr. Burns established a base in the American Enterprise Institute from which he continued to influence public policy, particularly as an adviser to Ronald Reagan.

In 1980, he served as founding chairman of the Committee to Fight Inflation, a gathering of a dozen prominent former economic policy makers united in their conviction that restrained policies were central to reducing inflation.

He was 'the Ambassador to West Germany from 1981 to 1985... Since returning from Bonn, he had resumed his place as distinguished scholar in residence at the American Enterprise Institute.

In Bonn and the 'Successor Generation'

Burns was ambassador to Bonn during the rise in the peace movement and European protests against US military power.

Almost totally unnoticed in the battle over budget cuts and military spending, an undercurrent of neoisolationism is developing in Congress in reaction to the wave of antinuclear protests and anti-American sentiments rolling across Western Europe this fall. This inchoate American backlash already has a label: Mansfieldism, an allusion to the effort by Senator Mike Mansfield of Montana, the Democratic majority leader a decade ago, to cut American troop strength in Europe in half to try to force the European allies to shoulder more of the economic burden of the common Western defense in Europe. Although the Mansfield Amendment was soundly defeated in May 1971, its mere existence and the debate it engendered gave leverage to the Johnson Administration in bargaining with European governments to help offset the costs of keeping 310,000 American troops in Europe. So potentially volatile is the political mood here that the current majority leader, Senator Howard H. Baker Jr. of Tennessee, concedes that he dare not openly attempt the Mansfield tactic to give vent to American uneasiness and to send a warning signal to European leaders...

So far that sentiment has not taken any organized form. But it is palpable enough for Arthur Burns, the United States Ambassador in Bonn, to have devoted his first public speech in that post to warning European leaders that the current European atmosphere and even the statements of some European leaders could set off a backlash in America. 'There may well be a growing sentiment in America to turn back upon itself and let Europe depend for its security and freedom upon its own resources or upon Soviet good will,' Mr. Burns said. 'Isolationism is by no means the alternative that my country seeks. But many Americans are wondering whether Europeans are sufficiently mindful of the fact that the Atlantic Alliance has made a free, prosperous and peaceful Western Europe possible during the past 30 years.'

What is irritating to Washington, it is privately conceded, is that European politicians have made it look as though the Americans caused the current controversies by forcing the Europeans to accept deployment of new intermediate-range missiles, whereas the Americans recall that Chancellor Helmut Schmidt of West Germany took the lead in 1979 in asking for these missiles to offset the buildup of Soviet SS-20 missiles. Given that irritation, some top Administration officials are not unhappy that Mr. Burns was so outspoken the other day. Maybe it's not a bad thing for someone to say that occasionally, said one senior policy-maker. But he insisted that Mr. Burns's warnings about incipient neo-isolationism were not part of an orchestrated American strategy.

'Burns was strictly speaking on his own,' the official said. 'His speech was not cleared in advance. I was surprised to read about it.'

As U.S. ambassador to West Germany Arthur F. Burns put it in a Hamburg speech last month, "The tight net of shared values between our two peoples has been sagging, in part, because we are now less intimately involved with each other."

The focus of Burns' concern _ and that of the administration he represents _ is the anti-nuclear movement attracting demonstrators and opinion poll majorities against NATO's stationing of new U.S.-made nuclear weapons in Europe. Of German pacifists, Burns said: "I am appalled by the ignorance that so many of them exhibit about the history even of their own country, to say nothing about their ignorance of the United States."

Ambassador to Ireland Peter Dailey expresses similar views. "I detect an undercurrent of distrust of U.S. policies among Europe's youth, and that really shocks me," he said in a recent interview. Dailey, a former California public relations executive, was commissioned by President Reagan in January to draft a blueprint for selling the U.S. defense case in Europe.

But some observers have reservations about the Reagan plan. Former U.S. ambassador to Italy, Richard M. Gardner, writing recently in The New York Times Magazine, fears the administration seeks "a quick advertising fix for a current foreign policy 'crisis' and (has) no comprehensive long-term vision of 'public diplomacy' as a vital element in American foreign policy."

Neoliberal connections

In his informative and entertaining memoirs, Two lucky people, co-authored with his wife Rose Friedman, the economist recounts the circumstances which led to his visit. In 1955, Arthur Burns, Chairman of the US President's Council of Economic Advisers, asked Neil Jacoby, a member of the Council and Dean of the UCLA School of Business, together with Milton Friedman to advise the Indian Government.