Michael Boskin: Key Economist in Bush’s Camp

STANFORD — Michael J. Boskin’s telephone is ringing off the hook.

The Stanford economist might prefer time for research. But he has other things to worry about: Boskin has emerged as a key adviser to presidential candidate George Bush. And on this morning, the campaign’s demands are ravenous.

First, a staffer at Bush’s headquarters in Washington needs quick tutoring on the candidate’s latest proposal, a modest plan to encourage private saving.

Boskin, who wears tortoise-shell glasses and has a neatly trimmed mustache, sits with a calculator on his lap, dispensing numbers and opinions. “I’d be careful how the Vice President uses that phrase,” he counsels at one point.

Bush’s staff seems to appreciate such advice: According to knowledgeable Republicans, Boskin is a candidate to become top White House economist if the Vice President wins the election.

Some economists are leery of balancing their good names on the knife’s edge between partisan politics and pristine research. But Boskin seems to manage well: He is respected both by academics and politicians and has advised government officials of both parties for years, including Sen. Bob Dole (R-Kan.), Bush’s former rival for the Republican presidential nomination, and Sen. Bill Bradley (D-N.J.).

Rather than crusading for a particular school of economic thought, Boskin is more inclined to glean lessons from different approaches. His target, however, is clear: public policy. He has devoted his efforts to tax theory, understanding personal spending and savings, Social Security, and other issues germane to people’s daily lives.

“Michael has always been the kind of person who wants to be a part of the game because the issues he’s dealing with are real-world, here-and-now, important public policy issues,” said Jerry Jordan, chief economist at First Interstate Bancorp in Los Angeles and a former member of the Council of Economic Advisers. “He’s been an advocate.”

Boskin, a firm believer in limited government and the virtues of free enterprise, has something Bush needs: an arsenal of statistics to back up the Vice President’s own position on cutting the deficit while resisting tax hikes.

Short Notice on Plan

“I know him well, and I depend on him for sound economic advice,” is how Bush described his relationship with Boskin during a September appearance in San Francisco.

Here at Stanford, in a tranquil research building where Boskin spends much of his time, calls pour in from the frenetic campaign trail. Boskin only learned late the night before of the savings plan’s imminent release.

Now--at the campaign’s request--he discusses it with reporters from the New York Times, the Washington Post and the Boston Globe who are calling him after a Bush appearance in Columbus, Ohio.

Patiently, he goes over details of the plan, the limits of eligibility and its tax-deferral features. “They keep writing stories about how carefully scripted the campaign is,” he said during a brief pause between calls. “As one who’s participating, that’s a ridiculous description.”

Boskin willingly endures the disruptions. The economic policies of Dukakis, he says, threaten a return to the high tax, slow-growth climate of the pre-Reagan era. And, of course, the association with Bush is a once-in-a-lifetime chance for a public policy researcher to influence public policy.

The cerebral professor has already made a mark. He wants a higher level of private saving, and his studies of incentives helped lead to broader benefits for individual retirement accounts several years ago. In 1983, he advocated a gradual increase in the age of eligibility for full Social Security benefits after the turn of the century, a measure that Congress adopted as part of bailing out the retirement program.

Would Narrow Deficit

More recently, he was an architect of Bush’s “flexible freeze” plan to cut the budget deficit. Under the plan, which would not apply to Social Security, total federal spending would be limited to roughly current levels, plus inflation. Any real spending increases would have to be offset by cuts elsewhere in the budget.

As the U.S. economy grows, boosting federal revenues, the deficit would narrow--although experts disagree on how fast that would happen.

The proposal illustrates Boskin’s wish to make economics relevant to real life. “I think Michael thinks he can make a difference,” said Gary Freedman, a Los Angeles attorney and friend of Boskin’s since adolescence.

“Can you imagine what kind of offers he gets from corporations to be a private economist, what kind of multiples of income that would mean for a college professor? But he honestly believes that it’s much more meaningful to try to convince legislators than clients of a Wall Street firm.”

Boskin was born in Manhattan and grew up in a modest neighborhood on the West Side of Los Angeles. His father worked as a contractor and his mother was an accountant. Freedman recalls his old friend as a “regular teen-ager” who was active in track and other sports. “Frankly, I didn’t realize how smart he was until college,” Freedman said of Boskin, who continues to enjoy tennis and skiing.

Boskin attended UC Berkeley in the mid-1960s, where some recall his sympathy with such “liberal” causes as the civil rights movement and opposition to the Vietnam War. As an undergraduate, Boskin toyed with the idea of careers in law and medicine, but turned to economics as a way “to use quantitative skills on issues that really affected people’s lives.”

Called ‘Best Student’

Rather than hunkering down in the library, for his senior honors thesis, Boskin knocked on doors in Oakland, interviewing poor families on questions of work incentives, welfare and taxes. He later was named outstanding graduate of his class. He continued his education at Berkeley, where he received master’s and doctoral degrees.

Prof. George F. Break, a key influence on Boskin at the time, describes him as “probably the best student I’ve had in my lifetime.”

Looking at the evolution of Boskin’s politics over the years, Break said: “He moved from a little left of center to a little right of center is the way I’d put it.”

Boskin says his thinking simply changed as he learned more, including such historical lessons as America’s experience with inflation and sluggish economic growth in the 1970s.

But on one concern, often considered “liberal,” he says he has changed little: “I was and still am very adamant about civil rights,” he declared. “I abide no excuse for discrimination of any kind.”

In the 1970s, Boskin’s writings on tax policy, Social Security, savings behavior and economic growth brought him to the attention of congressional committees, leading to many trips to Capitol Hill. Soon Boskin’s name was circulating in even more prominent circles.

In 1980, George P. Shultz, who knew him from Stanford, recommended Boskin to officials in Ronald Reagan’s presidential campaign. They quickly enlisted him to help prepare Reagan to debate Jimmy Carter.

The relationship with high-level Republicans was to continue. Boskin was asked to consider serving on Reagan’s Council of Economic Advisers in 1981 but demurred because he did not want to subject his new marriage to the pressure cooker of Washington.

“I was getting married, and everybody I know who’s been in Washington says it’s not the best place to spend your honeymoon,” he explained.

“I’m very high on Mike Boskin,” said Murray L. Weidenbaum, who served as chairman of the advisory panel and recruited for the vacancies. “I think he’s an outstanding mainstream conservative economist who has the right combination of technical ability and good policy sense.’

Word circulated last year that the Reagan Administration planned to award Boskin chairmanship of the council, the White House’s top economic job. But plans were halted after the October stock market crash, when White House officials decided it was the wrong time for Chairman Beryl W. Sprinkel to leave.

Pays Own Expenses

Nonetheless, Republican strategists did not forget Boskin’s value as an advocate armed with data and logic favoring conservative policies. Last spring, he spent four days at Bush’s home in Kennebunkport, Me., discussing the proposed spending freeze and other economic issues.

These days, Boskin remains in continual contact with the campaign, picking up his own expenses. When Bush recently sought a briefing on the economic state of middle-class Americans--to answer criticisms by opponent Michael S. Dukakis--it was Boskin who rode aboard the campaign plane to deliver it.

“I just try to give them the facts and present them in a way that’s understandable,” he explained.

He is learning, however, that in a heated political context it is hard to separate facts from values and opinions.

Lawrence H. Summers, Dukakis’ chief economic adviser, describes Boskin--with whom he shares a hard-to-peg eclectic vision of the economy--as “a skilled economist who’s adept in the policy arena.”

But Summers is quick to distance himself from his counterpart: “I’m dissatisfied about current economic performance; he’s enthusiastic. I think middle-class families have really had a tough time in recent years; he thinks things are very good.”

While Boskin says the flexible budget freeze represents a commitment to deal rigorously with the deficit, others say the policy is so vague as to be politically unworkable.

“It’s a joke,” argued Barry Bosworth, an economist who served as director of President Carter’s Council on Wage and Price Stability in the late 1970s. “It’s not a serious policy proposal.”

Plan Criticized

Similarly, the savings plan that Bush aides asked Boskin to advocate publicly also has been ridiculed, with critics noting that it could benefit savers by less than $20 a year under certain circumstances.

“Its positive effects are rather trivial, and its negative effects are rather trivial,” said William A. Niskanen Jr., a former member of Reagan’s Council of Economic Advisers, and one who would be expected to take a sympathetic view of the Bush campaign.

Boskin responds that a person in the 28% tax bracket, contributing the maximum $1,000 annually for 10 years, would save $500 and says that the plan was intended only as a “very modest proposal.” He dutifully added that Bush favors more significant tax incentives for parents who save for their children’s college tuition.

Of all the discomforts inherent in a controversial public role, however, Boskin seems most uneasy dealing with the campaign news media, which often oversimplify economic points and sometimes flatly misstate them.

“The national political media have a limited capacity to absorb economic information--with all due respect,” he said, adding diplomatically, “They have to absorb other things that I don’t.”

In any case, Boskin--who has written more than 70 articles and books, including columns in the Los Angeles Times--seems destined to remain in the spotlight, no matter how his candidate fares.

“Most economists are rather cautious about getting involved in a political debate, and he seems to rather relish it,” Niskanen observed.

And the debate is getting hotter all the time. Boskin will shortly celebrate his seventh wedding anniversary with his wife, Chris, an advertising executive with Hearst Corp.--so the timing may be more agreeable for a move to Washington.