One for the Money

As the primary lecturer for one of Harvard's most prominent Core courses, Martin S. Feldstein '61 is no stranger to campus life.

At the same time, in Washington, most know him better for his controversial tenure as a chief economic advisor in the Reagan Administration.

Indeed, the University's Baker professor of economics has straddled two worlds--a feat many insiders say has helped to make him a top contender for the Harvard presidency.

"[Feldstein] has been more successful than almost anybody else at combining distinguished scholarship and important involvement in economic policy," says Lawrence H. Summers, a Harvard economics professor currently serving as chief economist to the World Bank.

Whether as a professor, a top policy advisor or a regular columnist in The Boston Globe, Feldstein certainly draws attention. Alumni officials say that the 51-year-old economist, who was class marshal of his 25th reunion, is one of the most widely-recognized professors at Harvard.

Feldstein spent a two-year leave of absence in Washington, chairing the Council of Economic Advisers (CEA) from 1982 to 1984. During his time there, Feldstein sparred openly with other government officials over matters of economic policy.

"He is very much an independent thinker," says Lawrence B. Lindsey, a special assistant to President Bush who did his graduate work with Feldstein at Harvard. "Even when you disagree with him, you know that he has good reasons for thinking the way he does."

Feldstein is most well-known for his criticism of recent presidential deficit spending and his outspoken demands for tax increases. "He was drawing attention to the deficit as a problem before anyone else did," says Lindsey.

Feldstein was also one of the first policy analysts to make a connection between the deficit and currency exchange fluctuations. "He tends to be ahead of the curve in terms of seeing problems," Lindsey says.

Beyond his own policy insights, Feldstein left a significant institutional legacy at the CEA, according to some of his colleagues.

"I think he restored a lot of credibility to the CEA. There had been...the sense that the CEA was a bit of a cheerleader for the administration," says Lindsey. "He renewed a sense of respect for its independence."

Feldstein has been an outspoken critic of the present social security program; which he says discourages private savings. Instead, he favors an increase in private pension programs and a new system that does not rely on current workers' paychecks to fund an older generation's social security.

"Marty's a practical economist who recognizes and stresses the importance of incentives and of doing what's right for the long run, even if there is some pain in the short run," says the World Bank's Summers.

Although Feldstein's tenure in the Reagan Administration has tended to focus attention on his political persona, many Harvard watchers say that record is unlikely to affect his chances as a possible successor to outgoing President Derek C. Bok.

In fact, when Feldstein first made headlines by criticizing some Reagan economic policies from within, some observers said he did so with a Harvard audience in mind.

"At heart, he is an academic through and through," says Lindsey. "He'll always put his academic integrity first."

Lindsey says that he would expect Feldstein to be a good administrator, noting, "He knows when to make decisions himself and when to delegate."

A number of Feldstein's colleagues point to his work at the National Bureau for Economic Research (NBER) as evidence that he would be successful at running a large educational institution like Harvard. Feldstein has been president of the Cambridge-based NBER since 1977.

"The NBER was almost bankrupt," Lindsey says, "He turned it around and made it into one of the nation's leading thinktanks."

John B. Shoven, a Stanford professor of economics and a member of the NBER, also speaks highly of Feldstein's management of the organization, which coordinates conferences and funding for economists at universities all over the country.

"Marty has a real-world sensibility to him that is not very common to top-flight academics," Shoven says. "He's practical, straightforward and clear-thinking."

Teaching

And this real-world sensibility carries over into his teaching, according to Assistant Professor of Economics Douglas W. Elmendorf, the head section leader for Feldstein's Social Analysis 10. Elmendorf says the high-profile economist is particularly accessible.

"Ec 10" was the University's most popular course this term for the fourth consecutive year. "He very much enjoys teaching," Elmendorf says, "He cares a lot about the education of Harvard students."

Elmendorf says that Feldstein does more than simply lecture on the rudiments of economic theory; he shows students how to apply them.

Feldstein also teaches Economics 1420: "American Economic Policy," as well as part of a graduate-level public finance course.

Roots

Originally from New York, Feldstein enrolled in the College with plans for a career in law. But by the time the former Adams House resident graduated summa cum laude in 1961, he knew he had found his calling: economics.

On a Fulbright scholarship, Feldstein went on to study at Oxford University, where he received his master's and doctoral degrees and served as a research fellow and lecturer for several years.

In 1967, Feldstein returned to the University for an appointment as assistant professor of economics. A year later, he was promoted to associate professor. And in 1969, at age 30, Feldstein received tenure.

In 1977, Feldstein received the John Bates Clark award, a prestigious honor on a par with the Nobel Prize in economics.

He serves on the board of directors of a number of corporations, among them TRW, the Phoenix Mutual Life Insurance Company and the Hospital Corporation of America.

Associates say that Feldstein enjoys chopping wood at his house in rural Vermont.

Philip P. Pan contributed to the reporting of this article.