Spender Out

Almost lost in the flood of last week's news was the announcement that Alvin Harvey Hansen, Harvard's New Dealish, free-wheeling Lucius N. Littauer professor of political economy, will no longer act as consultant to the Board of Governors of the Federal Reserve System.

Since 1940 stocky, spectacled Alvin Hansen had commuted weekly from Cambridge to Washington to preach his left-wing economic views. For many years the hierarchy of New Deal officialdom has been fascinated by his contentions that: 1) there was no need to worry about the staggering size of the national debt so long as Government money was spent to create new wealth within the nation (TVAs, slum clearance, etc.); 2) prolific Government spending must be undertaken to level out the valleys in business cycles.

Why Economist Hansen, devout disciple of Britain's John Maynard Keynes, severed his relationship with the Federal Reserve Board, no one took the trouble to say last week. But to observers in Washington the reason was as obvious as the Federal Reserve building's big bronze doors through which he had passed so often.

The Board's chairman, Marriner Stoddard Eccles, is scared stiff of inflation, doubts it can be wholly avoided during the next three years. Utah Banker Eccles has thoroughly sold the Truman Administration, as he could never sell its predecessor, on the need for trimming Government expenditures and making a bold stab at trying--some day--to balance the budget.

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