Expert on Cycles: Burns Known as Expert On Business Cycles Expert on ...
HOT SPRINGS, Va., Oct. ,17 ÛÓIn the summer of I960, economist Arthur F. Burns told his friend Richard Nixon, then Vice President of the United States, that the Federal Reserve system was keeping monetary policy too tight, and that the Eisenhower government itself was helping to produce deflation with a budget that was too restrictive.</br></br>Relax on both sides, Burns warned Mr. Nixon, or there will be a recession. Mr. Nixon did his best to persuade William McC. Martin, Federal Reserve chairman, and Treasury Secretary Robert B. Anderson to heed BurnsÛª advice.</br></br>But Martin and Anderson ignored the warning. A recession resulted, and candidate Nixon lost a presidential election to John F. Kennedy. Mr. Nixon .has never forgotten BurnsÛª economic wisdom or the impact of recession on political results. When Mr. Nixon finally achieved his struggle for presidential success in 1968, Burns was almost the first man he wanted back on his Washington team.</br></br>Today, at a private meeting of the blue-ribbon Business Council at this mountain resort, counsellor to the President and critic of the Federal Reserve Arthur Burns was in attendance when Treasury Secretary David M. Kennedy stepped to the podium with the surprise announcement that the President had named Burns to succeed Martin.</br></br>ÛÏThere was a standing ovation,Û said Fred Borch, chairman of both the council and the General Electric Co. The tribute followed by 1 moments a similar ovation to Martin who had just delivered an emotional swan song to the council.