An outlook colored by Depression, Hollywood, images of bygone America; New Reagan political biography is best yet; Reagan, by Lou Cannon. New York: G. P. Putnam's Sons. 464 pp. $18.95.

Ronald Reagan called his 1965 autobiography ''Where is the Rest of Me?'' The title comes from a line in the movie, ''King's Row,'' in which a dapper man-about-town (played by Reagan) finds that his legs have been amputated by a sadistic physician. He cries out: ''Where is the rest of me?''

In real life, Ronald Wilson Reagan, the 40th President of the United States, plays the role of a character who is both venerated and disliked, a sometimes hero who is often misunderstood, who confuses - if not confounds - both his fans and critics.

In this book, Lou Cannon, veteran Washington Post White House correspondent, who covered Reagan's governorship in California, takes on the monumental task of analyzing Reagan's real-life role. The biographer does a credible job of it - perhaps a brilliant one.

Ronald Reagan is forthright and, in many respects, uncomplicated. But he does complicated things. His sharpest critics have seen him as heartless, unresponsive to the less fortunate in society, lacking in sophistication and enlightenment.

Reagan as portrayed by Cannon in some 400 pages is two people rolled into one: a humble man from a depression-colored Midwestern background who shows compassion on those who truly lack - yet also a make-believe Hollywood world that bestows goodness on demand and solves problems by waving a magic wand.

With this premise, Cannon scores Reagan, not for malevolence but for an unrealistic attitude toward budget-balancing, environmental safeguards, and - most of all - protecting America from foreign encroachment. And Cannon insists that the President must hear more of what is going on around him in order to form an appropriate agenda on these and other key issues. A recurring criticism of Reagan, according to Cannon, is that he seems to listen - but he doesn't always hear. (Cannon also refers to this in a literal sense - mentioning, if briefly, a long-standing hearing impairment.)

Cannon's contribution is not so much in new material, but in its perspective and analyses. The reader is left with a Reagan he can like and often admire, yet also with a politician who has serious weaknesses. Cannon portrays Reagan as sometimes lazy; he doesn't always do his homework, says Cannon, particularly in foreign policy matters.

Yet, this book fairly gives Reagan his due - as a very human, thoughtful, loyal-to-his-helpers, sometimes self-deprecating man. His courage and wit shone especially bright after the assassination attempt on his life.

Reagan's fierce anti-communist rhetoric is tempered by an unemotional and surprisingly balanced view on how to cope with this type of threat, Cannon points out. And the President's outward embracing of the far right is balanced with astute political maneuvers to keep the Moral Majority and other militants at arm's length. Particularly revealing is a quote from a Reagan aide who alludes to a line from the film ''The Godfather,'' in which a criminal leader advises: ''Hold your friends close; hold your enemies closer.'' This aide goes on to explain: ''We want to keep the Moral Majority types so close to us that they can't move their arms.''

If Reagan does some role-playing for the radical right, his commitment to balanced budgets, trim-and-cut Reaganomics, and American business is less negotiable. Cannon insists that presidential pragmatism (the recent income tax hike not withstanding) doesn't extend to those areas which fall under the category of the ''American dream.''

Cannon's single most newsworthy prediction is that Ronald Reagan won't seek reelection in 1984. Yet Cannon offers little evidence for his view, other than avering that the Californian has no egotistical need for the White House and never really did lust after public office.

Closer at hand, the November elections will be, in a sense, referenda on Reagan's policies. And voters will be well advised to do their political homework. For that, Cannon's ''Reagan'' should be required reading.

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