Walter Heller
Encyclopedia
Walter Wolfgang Heller (1915–1987) was a leading American
economist of the 1960s, and an influential advisor to President John F. Kennedy
as chairman of the Council of Economic Advisors, 1961-64.
Heller was born to German immigrant parents in Buffalo, N.Y.. He was a Keynesian who promoted cuts in the marginal federal income tax rates. This tax cut, which was passed by President Lyndon B. Johnson
and Congress after Kennedy's death, was credited for boosting the U.S. economy. Heller developed the first "voluntary" wage-price guidelines. When the steel industry failed to follow them, it was publicly attacked by Kennedy and quickly complied. Heller was one of the first to emphasize that tax deduction
s and tax preferences narrowed the income tax base, thus requiring, for a given amount of revenue, higher marginal tax rates. The historic tax cut and its positive effect on the economy has often been cited as motivation for more recent tax cuts by Republicans.
The day after Kennedy was assassinated, Heller met with President Johnson in the Oval Office
. To get the country going again, Heller suggested a major initiative he called the "War on Poverty
", which Johnson adopted enthusiastically. Later, when Johnson insisted on escalating the Vietnam War
without raising taxes, setting the stage for an inflationary spiral, Heller resigned.
In the early phases of his career, Heller contributed to the creation of the Marshall Plan
of 1947, and was instrumental in re-establishing the German currency
following World War II
, which helped usher an economic boom in West Germany
.
Heller was critical of Milton Friedman
's followers and labelled them cultish: "Some of them are Friedmanly, some Friedmanian, some Friedmanesque, some Friedmanic and some Friedmaniacs."
Heller joined the University of Minnesota faculty as an associate professor of economics in 1945, left for a few years to serve in government, and returned in the 1960s, eventually serving as chair of the Department of Economics. He built it into a top-ranked department with spectacular hires, including Nobel Prize winners Leonid Hurwicz
(2008) and Edward C. Prescott
(2004).
Heller attended Shorewood High School
in Shorewood, Wisconsin
. He entered Oberlin College
in 1931, graduating with a B.A. degree in 1935.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
economist of the 1960s, and an influential advisor to President John F. Kennedy
John F. Kennedy
John Fitzgerald "Jack" Kennedy , often referred to by his initials JFK, was the 35th President of the United States, serving from 1961 until his assassination in 1963....
as chairman of the Council of Economic Advisors, 1961-64.
Heller was born to German immigrant parents in Buffalo, N.Y.. He was a Keynesian who promoted cuts in the marginal federal income tax rates. This tax cut, which was passed by President Lyndon B. Johnson
Lyndon B. Johnson
Lyndon Baines Johnson , often referred to as LBJ, was the 36th President of the United States after his service as the 37th Vice President of the United States...
and Congress after Kennedy's death, was credited for boosting the U.S. economy. Heller developed the first "voluntary" wage-price guidelines. When the steel industry failed to follow them, it was publicly attacked by Kennedy and quickly complied. Heller was one of the first to emphasize that tax deduction
Tax deduction
Income tax systems generally allow a tax deduction, i.e., a reduction of the income subject to tax, for various items, especially expenses incurred to produce income. Often these deductions are subject to limitations or conditions...
s and tax preferences narrowed the income tax base, thus requiring, for a given amount of revenue, higher marginal tax rates. The historic tax cut and its positive effect on the economy has often been cited as motivation for more recent tax cuts by Republicans.
The day after Kennedy was assassinated, Heller met with President Johnson in the Oval Office
Oval Office
The Oval Office, located in the West Wing of the White House, is the official office of the President of the United States.The room features three large south-facing windows behind the president's desk, and a fireplace at the north end...
. To get the country going again, Heller suggested a major initiative he called the "War on Poverty
War on Poverty
The War on Poverty is the unofficial name for legislation first introduced by United States President Lyndon B. Johnson during his State of the Union address on January 8, 1964. This legislation was proposed by Johnson in response to a national poverty rate of around nineteen percent...
", which Johnson adopted enthusiastically. Later, when Johnson insisted on escalating the Vietnam War
Vietnam War
The Vietnam War was a Cold War-era military conflict that occurred in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. This war followed the First Indochina War and was fought between North Vietnam, supported by its communist allies, and the government of...
without raising taxes, setting the stage for an inflationary spiral, Heller resigned.
In the early phases of his career, Heller contributed to the creation of the Marshall Plan
Marshall Plan
The Marshall Plan was the large-scale American program to aid Europe where the United States gave monetary support to help rebuild European economies after the end of World War II in order to combat the spread of Soviet communism. The plan was in operation for four years beginning in April 1948...
of 1947, and was instrumental in re-establishing the German currency
German mark
The Deutsche Mark |mark]], abbreviated "DM") was the official currency of West Germany and Germany until the adoption of the euro in 2002. It is commonly called the "Deutschmark" in English but not in German. Germans often say "Mark" or "D-Mark"...
following World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, which helped usher an economic boom in West Germany
West Germany
West Germany is the common English, but not official, name for the Federal Republic of Germany or FRG in the period between its creation in May 1949 to German reunification on 3 October 1990....
.
Heller was critical of Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
's followers and labelled them cultish: "Some of them are Friedmanly, some Friedmanian, some Friedmanesque, some Friedmanic and some Friedmaniacs."
Heller joined the University of Minnesota faculty as an associate professor of economics in 1945, left for a few years to serve in government, and returned in the 1960s, eventually serving as chair of the Department of Economics. He built it into a top-ranked department with spectacular hires, including Nobel Prize winners Leonid Hurwicz
Leonid Hurwicz
Leonid "Leo" Hurwicz was a Russian-born American economist and mathematician. His nationality of origin was Polish. He was Jewish. He originated incentive compatibility and mechanism design, which show how desired outcomes are achieved in economics, social science and political science...
(2008) and Edward C. Prescott
Edward C. Prescott
Edward Christian Prescott is an American economist. He received the Nobel Memorial Prize in Economics in 2004, sharing the award with Finn E. Kydland, "for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles"...
(2004).
Heller attended Shorewood High School
Shorewood High School (Wisconsin)
Shorewood High School is a comprehensive public high school located in the village of Shorewood, Wisconsin, as part of the Shorewood School District....
in Shorewood, Wisconsin
Shorewood, Wisconsin
Shorewood is a village in Milwaukee County, Wisconsin, United States. The population was 13,763 at the 2000 census. Howell Raines of The New York Times said in 1979 that "[t]his maplestudded town on Lake Michigan dotes on its reputation as Milwaukee's most liberal suburb."-Geography:Shorewood is...
. He entered Oberlin College
Oberlin College
Oberlin College is a private liberal arts college in Oberlin, Ohio, noteworthy for having been the first American institution of higher learning to regularly admit female and black students. Connected to the college is the Oberlin Conservatory of Music, the oldest continuously operating...
in 1931, graduating with a B.A. degree in 1935.
Primary sources
- Heller, Walter. Monetary vs. Fiscal Policy (a dialogue with Milton Friedman). 1969.
- Heller, Walter. New Dimensions of Political Economy. 1966.