WASHINGTON — On the eve of the 1982 seven-nation economic summit, then-Treasury Secretary Donald T. Regan and others in the Reagan Administration attempted to whip up sentiment that the severe economic recession had ended.
But Commerce Department chief economist Robert Ortner was telling reporters a different story.
The index of 10 leading economic indicators released that morning demonstrated that the recession wasn't over, Ortner said.
"Half of the indicators were up and half down," Ortner said, "and from my personal point of view, the wrong ones were down."
Ortner, in his usually blunt fashion, turned out to be right. The recession went on for another six months.
On an economic team headed by a President called "the Gipper," Ortner refuses to be a cheerleader and at times calls his own plays.
Ortner recently was nominated to become undersecretary of commerce, an even higher-profile position that will lend still greater weight to his economic pronouncements.
"I have never been told by Secretary (Malcolm) Baldrige to shade my comments or put a happy face on numbers," Ortner said. "The only thing Baldrige has suggested to me is possibly that I might like to keep in mind when the President is at an economic summit, (Donald) Regan is there and (Treasury Secretary James A.) Baker, I might be careful about what I say so that I do not inadvertently disagree with them."
Ortner's confirmation has been on hold for almost a month at the request of Sen. Robert W. Kasten (R-Wis.), whose office said the senator had "absolutely no problem" with Ortner's appointment.
Sources said he is holding up Ortner's confirmation because he wants the Commerce Department to award a $1-million grant for a marina development project in his home state.
Ortner had no comment on the delay.
Ortner said he is able to get away with his public disagreements with other members of the Administration because, as one of the people chiefly responsible for most of the nation's major statistics, "we try to tell it like it is."
For example, the Administration had insisted, even before the dramatic drop in oil prices, that the economy would grow at a 4% rate this year, although most mainstream economists had said that if it reached 3%, the Administration would be lucky.
Ortner said during an interview in his office that he was "skeptical about 4% this year. The drop in oil prices is good, but the oil industry is pulling back before consumers pick up the pace." Four percent growth "looks more likely now than when" the Administration first made the forecast late last year, he added, and private economists agree.
"I think we have an extra responsibility here. We are a statistical agency. We have a responsibility to maintain the integrity of the data," Ortner said. In his new position, he has no plans to change, he said.
"We had a reputation for spouting an independent line," said Robert Dederick, the former commerce undersecretary who hired Ortner and who now is chief economist for Northern Trust Bank in Chicago. "People tended to look askance and say, 'Why are these people over there saying these things?'
"Bob likes to talk a lot," Dederick continued. "The more you talk, the more you tend to say things that are outspoken."
Dederick should know. He, Regan and just about every other economic policy-maker in the Reagan Administration once had to disown Ortner's remarks that, amid signs the recession was deepening, the Federal Reserve Board should raise money-growth targets to give the economy a boost. Ortner was the first Administration official to criticize the Fed's long-range policies.
Ortner came to Washington and the Commerce Department five years ago, leaving a job as chief economist and senior vice president for Bank of New York, where he studied economic policy and related it to economic forecasting for the bank.
At a time when the Treasury Department was being filled with "supply-side" economists such as Norman Ture and Paul Craig Roberts, the commerce secretary was interested in an economist who "was top ranked, and an economist who was not married to any one economic theory, an economist who would take a look at the real world," a spokesman for Baldrige said.
"I'm not saying we're not supply side," the spokesman added, "because we are. Some economists solve (economic problems) with the money supply and nothing else. In the business world, it's everything." Baldrige, who came from a business background, "wanted advice that took in all the spectrum," the spokesman said.
Baldrige settled on Ortner, described by his peers as eclectic.
When asked why he accepted the job, Ortner shrugged his shoulders and replied: "Whatever the reasons were, it was not for the money."
"He's a very solid economist with well-balanced views," said Allen Sinai, chief economist for Shearson Lehman Bros., who knew Ortner when Sinai worked for Data Resources. "He's very solidly based as a business economist. He's not doctrinaire."