Tyson a 'New Democrat' with liberal background

December 12, 1992|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau

WASHINGTON -- Laura D'Andrea Tyson, the first woman to head the president's Council of Economic Advisers, is a non-doctrinaire "New Democrat" very much of the Clinton school.

She is a cautious supporter of economic stimulus, an advocate of investment-led growth and a campaigner for fair trade, particularly with Japan.

Dr. Tyson made her mark with President-elect Bill Clinton at a series of economic briefings she joined in Little Rock, Ark., during the campaign.

While she has been enlisted to serve in a Democratic administration that is fashioning a pro-business economic policy and which on Thursday appointed a strikingly conservative economic team -- her own political and economic activities have distinctly liberal roots.

She was an adviser on trade and technology in the 1988 presidential campaign of Democratic candidate Michael Dukakis, working alongside Lawrence Summers, chief economist at the World Bank. Mr. Summers served as one of Mr. Clinton's top economic advisers and was a contender for the White House job she was given yesterday.

Dr. Tyson, 45, is a professor of economics and business administration at the University of California at Berkeley. There, she has been active on the Berkeley Round Table on International Economics, a group focused on the importance of manufacturing, technology, industrial policy and trade.

"It's a stellar appointment," said Lawrence Mishel, research director with the labor-backed Economic Policy Institute, where Dr. Tyson is a member of the research council.

"She is in the camp that says it matters what industries we have, it matters how firms produce, that technology matters, working organization matters, and training matters," Mr. Mishel said. "It's an important appointment because it is a signal that Clinton wants a diversity of views. He is not going to get these kinds of things from [Treasury Secretary Lloyd] Bentsen, [Budget Director Leon] Panetta or [Economic Security adviser Robert] Rubin."

Dr. Tyson is a member of the Cuomo Commission, a liberal group of economists, academics and business executives that last month produced a blueprint for rebuilding the U.S. economy. It called for a growth package that would add a $70 billion increase to the deficit in fiscal 1993.

That figure was based on the state of the economy earlier this year, and now appears way above any stimulus that the Clinton administration is likely to introduce. Most economists are looking for a growth package of around $20 billion, centered on an investment tax credit and public infrastructure spending.

Asked in a recent interview how large a stimulus package she thought was appropriate, she replied: "We are in the politics of what is feasible. We have to stimulate the economy, sensitive to the fact we have a large deficit, that the financial markets know that, that they might be willing to give some room [for stimulus] but the room depends on the state of the economy, but [we must] also put everything together with the long-term strategy of deficit reduction."

In a nutshell, that is the Clinton approach: to wait as long as possible to decide just how much stimulus the economy needs without spooking the markets or retreating from the ultimate goal of deficit reduction.

Dr. Tyson also echoes the Clinton emphasis on investment-led growth. At a Cuomo Commission press conference last month, she said: "Investment has both the quality of being able to stimulate the economy in the short run through additional spending . . . and the benefit of increasing assets on which our long-run living standard depends."

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