Liberal Economists Enjoy a Resurgence

FOR the "card-carrying liberal," the intellectual climate has brightened since the Reagan era.

"The numbers have been going our way," says a Democratic economist working for Congress. The economic recovery is weak. Income distribution has become more unequal. Poverty has grown. More citizens are open to the view that government does have some role in tackling these economic problems.

A few conservatives have chosen to attack the numbers, rather than advocate different policy remedies. "They have to really torture the numbers to make their points," the economist says.

Paul Krugman, an economist at Massachusetts Institute of Technology, writes in the latest issue of The American Prospect: "It turns out that many conservatives, for all their anti-totalitarian rhetoric, have Orwellian instincts: If the record doesn't say what you wish it did, hide it or fudge it.

There are substantive issues about income distribution. Nobody really knows all the reasons why incomes at the top have soared while those at the bottom have plunged. Still less is there a consensus about what kind of policies might limit or reverse the trend. But it seems that many conservatives not only don't want to discuss substance: They prefer not to face reality, and to live in a fantasy world in which the 1980s turned out the way they were supposed to, not the way they did."

Over 13 pages, Mr. Krugman demolishes thoroughly the efforts of some conservatives to deny that a more unequal income distribution developed in the United States in the 1980s.

The American Prospect itself reflects something of a revival in liberalism of a revised sort since the late 1980s. A coeditor, Robert Kuttner, sees the three-year-old publication in part as a replacement for The New Republic, which in the 1980s turned from left to right. Mr. Kuttner's quarterly magazine already has a circulation exceeding 10,000 - not bad for an intellectual publication.

"Our views are ascendant," says Lawrence Mishel, research director of the Economic Policy Institute, a liberal Washington think tank. "There is a growing recognition that government has a role to play" in such areas as income policies and manufacturing competitiveness.

The institute was founded in 1986, partially because another famed Washington think tank, the Brookings Institution, had moved toward the center. "We consciously filled the vacuum," Mr. Mishel says. The Economic Policy Institute's staff has grown from four to around 30. Though the institute plays no official role in the campaign of Bill Clinton, some staff members have given advice on their own time. They have helped the Clinton campaign round up some 500 economists, nine of them Nobel Prize winners, who

will soon endorse the Clinton economic program.

Mishel expects his institute to be an "important source of ideas and analysis" to a Clinton administration.

Another liberal, Isaac Shapiro, says, "There have been signs of the reemergence of liberal thought, somewhat refashioned." He is an economist with the Center on Budget and Policy Priorities, an advocacy and research group in Washington that looks at poverty and income numbers. It was founded in 1981 in response to what Mr. Shapiro calls "the merchants of right-wing thinking" such as those at the Heritage Foundation, a think tank highly influential in the Reagan years in the White House.

Shapiro also charges some conservatives, such as Rep. Dick Armey of Texas, ranking Republican on the Joint Economic Committee, with "various forms of denial and statistical misuse." He says economists at the American Enterprise Institute, a conservative Washington think tank, "are more honest brokers on these things," that is, on income distribution, poverty, and so on. Many moderate conservatives have joined liberals in seeing the need for greater public investment in education, training, and infrastruc ture to move the economy forward again.

Liberals themselves have changed. They recognize the problem of a lack of a work ethic among some poor people and admit the validity of some other findings of "conservative" economic research in the 1970s and 1980s. But they also maintain that supply-side economics failed, that economic growth in the 1980s wasn't the same as in earlier decades, resulting in the rich getting richer and the poor losing ground.