When the nation learned this month that the economy is formally in a recession, the word came not from the White House but from an obscure, private group here called the National Bureau of Economic Research.
Although not actually part of the government, the National Bureau -- as the organization is known among economists -- for years has been the official arbiter of the business cycle, deciding when the economy enters a recession or a boom.
For more than six decades, NBER has commanded unchallenged respect both in Democratic and Republican administrations through impeccable scholarship, rigid nonpartisanship and an academic caution about entering live policy disputes.
But today, amid a major expansion and modernizing under the presidency of Harvard conservative Martin Feldstein, the organization is facing new questions about whether it is becoming too political to function effectively.
In bringing NBER into the 20th century, the issue is: Is Feldstein also tainting it politically? The consensus so far is that such charges are plainly out of line, but there's some grousing by critics nevertheless.
The dispute is best placed in perspective by comparing the operations of the now 60-year-old organization during the period since Feldstein took over as president in April 1977 with what it achieved during its first 57 years of existence.
Although NBER has recorded some of the most spectacular breakthroughs in economics -- defining the business cycle and developing the index of leading indicators, to name just two -- it has also been the quintessential ivory tower.
The image of an NBER economist has been that of an economic scholar laboring intensely with statistical charts and diagrams, quietly tracking the business cycle. Interviews and speechmaking were rarities at best.
Indeed, most of NBER's conclusions and pronouncements were published so far after the fact that there was little, if any, chance of their provoking much controversy.
Typical is an analysis by NBER economist Victor Zarnowitz on the behavior of business inventories in the late 1950s and early 1960s. But it wasn't completed until the late 1960s. And it didn't break out into print until 1972.
In the past three years, however, under Feldstein's new brand of stewardship, the staid old maid of economics has taken on a new look, and become more aggressive, to boot.
The stocky, blunt-spoken, 40-year-old Harvard economist has:
Completely revamped NBER's basic organizational structure, shifting its headquarters from New York to Cambridge and closing down the Washington office, which had become too institutionalized in Feldstein's view.
NBER still maintains offices in New York and Palo Alto, Calif., but officials concede these are largely conveniences. The organization is run from a modernistic office building near the edge of the Harvard campus.
Channeled the group's research efforts into conspicuously more timely economic issues, dropping earlier side-ventured into transportation and energy studies and publication of monthly computer data.
Publication of monthly statistical data was handed over to Data Resources, Inc., the economic consulting firm, and Citibank. "I just didn't think it had much part in our research," Feldstein says.
De-emphasized the NBER's historic reliance on books to get across its research findings in favor of more quickly-disseminated "working papers" that can be distributed more promptly around the nation.
Feldstein also hired a combination editor and public-reltions director to help publicize the organization's activities. NBER now publishes abstracts of all its studies in a spiffy new format complete with blue-and-white logo.
Perhaps the most controversial change, however, has been the entry of the bureau into controversial economic policy issues that now are at the forefront of national economic debate.
Among recent NBER tracts are pamphlets by Feldstein on capital formation and tax restrictions that are impeding investment and saving, and a new study that pokes holes in traditional theories about youth unemployment.
Although the studies themselves scrupulously have avoided making specific policy recommendations, the fact that they have produced essentially conservative fidings has drawn criticism from some liberals.
More frown-provoking to some academic purists is Feldstein's obvious refusal to abandon his activities as a private economist while serving as president of NBER.
The Harvard professor has continued to testify before Congress, advise congressional figures on legislation and write artices on current poilcy issues for newspapers and magazines.
Feldstein was cited as a key figure in last year's victory by conservatives to reduce capital gains taxes. And he has been a significant force this session behind a bill to provide faster depreciation writeoffs for business.
As might be expected, the combination of these developments has sparked critcism from other academics, particularly from liberals who see Feldstein's new thrust as an ominous break from NBER's nonpartisan tradition.
"If you're interested in donating funds to NBER, you cerntainly know where it stands," said Barry P. Bosworth, a Brookings Institution economist. Others have suggested that NBER in effect has sold its soul to "contract research."
But Feldstein insists there's nothing untoward about the changes he has made -- that the NBER's efforts needed to be rechanneled to more basic economic issues, and that publicizing its findings only helps advance the art.
And he dismisses any suggestions that being president of NBER should restrict his own private activities. "I always make it clear which hat I'm wearing," he said.
Finally, Feldstein flatly denies that he's altered NBER's research efforts to fit his own conservative outllook. He argues NBER took up investment incentives and youth unemployment because they are two key issues of the times.
"Only a small fraction of our work is on policy-sensitive subjects," he said in an interview. "We're not an anti-Keynesian shop or a pro-Keynesian shop. iI don't think you should react to the hot issue of the month."
NBER's contributions include:
Pioneering work by Arthur F. Burns, former chairman of the Federal Reserve Board, defining the nature of the business cycle and developing the present system for economic forecasting.