THE notion around the White House of scrapping the Council of Economic Advisers -- the small economic-analysis shop that works directly for the Oval Office -- was a misguided idea from the outset. President Reagan has taken the better approach in nominating a new chairman for the council. Ironically, his choice of Beryl Sprinkel may add up to an important plus for the council -- and the White House. Mr. Sprinkel is now undersecretary of the Treasury for monetary affairs. He is a ``monetarist'' -- i.e., an economist who believes that changes in the money supply are major factors in determining a nation's economic course. That aside, he is also a close associate of the new White House chief of staff, Donald Regan, his previous boss at the Treasury.
All expectations are that Mr. Regan will be a main economic spokesman -- and economic adviser -- to President Reagan. So the Council of Economic Advisers could well continue to be overshadowed at the White House. Mr. Sprinkel, moreover, is a team player -- a person known to be staunch in his support of President Reagan. Beryl Sprinkel would not be expected to challenge administration economic policy as former CEA chairman Martin Feldstein often did.
But that may actually be something of an advantage at this juncture. Mr. Sprinkel, for all his monetarist economic leanings, is known as a careful and thoroughly professional economist. He has been directly involved in many of the administration's most important economic proceedings, particularly on the international front, where he dealt with third-world debt and the financing role of international lending agencies.
Clearly, the White House is going to need some careful -- and hard -- economic analysis during the months ahead. As President Reagan noted in his press conference last week, the economy is looking better than anticipated. Steady growth should continue during 1985.
But there are serious challenges: the high value of the dollar vis-`a-vis other currencies. The continued erosion in US exports. Budget deficits which, without congressional efforts to curb them, will worsen.
Add to all this the fact that the Federal Reserve Board has apparently ended its easier credit policy -- although not yet directly moving toward a policy of tightening credit -- and the period ahead has many economic uncertainties.
In short, the White House is going to need a CEA that perceives the intricate linkages between money supply, credit, third-world debt, and the movement of the dollar on international markets. In that regard, Mr. Sprinkel may prove a logical choice.