It all began, says Donald Welsh, when his 10-year-old daughter wanted a magazine subscription as a present. He said, "great." She said People. He said, "Oh." And "then I got to thinking how all the children's magazines either talk down to kids, or they're educational or they're boring." Meanwhile, he'd been watching the Muppets on TV, and "I'd always thought the show was actually a magazine, with its separate sections." He merged his insights, called moppet-mogul Jim Henson, and the result is Muppet Magazine, half a million copies of which will hit the stands on Nov. 1 at $1.25.

It took two years for Welsh, 38, publisher of Outside magazine, to cut the deal. "They're very, very particular about who they do business with," he says, and "we have to have everything approved by the Henson organization. They have an incredibly high standard of humor and graphics." The Newsweek-sized, 64-page quarterly will be penned by yucksters from The National Lampoon and "Saturday Night Live" for an 8- to 12-year-old target audience, and will follow the format of the TV program, mixing articles about real-life celebrities with appearances by the famous frog-and-pony show. Slated for the first issue: a Muppet look-alike contest with side-by-side photos, based on reader response to ads in The New York Times and Variety. Tip O'Neill was a landslide choice for Fozzie Bear, says Welsh; but he nixed the pix when the Speaker's office demurred. Where Are Standards?

When Hilton Kramer resigned this spring as chief art critic for The New York Times, he announced his plans to found a new monthly of serious artistic and cultural criticism. The result is The New Criterion, which premieres in September with a press run of 3,000. At $3.50 for each of 10 issues (September to June), TNC takes aim at the paradox that Kramer, 54, discerned after 16 years with The Times: America is undergoing a cultural explosion, and "yet how directionless and stymied, how baffled in their purposes, most of this activity and talent seems"; how "pusillanimous" our critics, how "threadbare" our values and tastes. You've probably noticed this yourself.

Funded by four private foundations, TNC will start setting us right with 96 unillustrated pages containing "Berlin, 1928" by Nobel laureate Elias Canetti, Joseph Epstein on "Literary Life Today," Norman Podhoretz on F. R. Leavis and Kramer on Postmodernism, along with a host of book, music and art reviews. "We're not going to pay much attention to popular culture," says Kramer. Subscriptions are $22 a year from P.O. Box 5194, FDR Station, New York, N.Y. 10150. That Awkward Age

At 99, Ladies Home Journal is getting younger. Family Media Inc. of New York (Health, 1001 Home Ideas) recently bought the 5-million-circulation monthly from the Charter Co. LHJ had lost some readers in the past two years to the new magazines for working women, but FMI president Robert Riordan predicts only slight innovations: more regional editorial material and an effort to attract a slightly younger audience. Editor Myrna Blyth says that means reducing the median age from 41 to 38, and "middle age is very young today." So it seems in the August issue, which includes body-language tips for job-seekers (cross legs only at the ankles, and no pants), a photo retrospective on Marilyn Monroe, advice on how to avoid "the bedroom blahs" (would you believe black stockings and reading aloud from the Kamasutra? Good luck) and a dollop of Shirley Conran's viscid new novel, "Lace"--all behind a cover featuring the annoyingly ubiquitous Cheryl Tiegs. The Smut Glut

The August Glamour carries a re ort from a Princeton therapist who alleges that post-liberation performance anxiety has made sexual burnout "absolutely epidemic" among single women. Well, sure: They've probably been reading the ladies' magazines. It's a libidinal quagmire out there. Glamour also hawks articles on "sexy hair" and "orgasm attitudes." Cosmo has "Being a Mistress in the Liberated '80s" cheek by jowl with "Why Most Men Can't Get Enough Sex." Mademoiselle's got "12 Ways to a Sensual Body," McCall's offers tips on "love talk" and sexual jealousy, Self debates "Sensual vs. Sexy," and Redbook warns of "The Sex Disease That Doctors Can't Cure." Even prim Seventeen has felt the need for a sexual advice column, beginning this month. (See also The American Spectator, which avers that the American woman has become "a superb jogger, an amazing receptacle of vitamin pills and the most formidable female haranguer on earth," but "the more liberated the Yankee female, the lousier the lover.") Given the vast slather of boudoir trivia, no wonder millions are quivering in anxiety. Advice to Burned-Out-in-Princeton: If you can't stand the heat, get out of the newsstand.

Where herpes made the cover of Time. The decision to put the American Lesion out front caused some "soul-searching," says senior editor Chris Porterfield. Not about buyer recoil (Time has only 5 percent rack sales); nor about Bible-belt propriety (after all, the arbiters of Luce morals appended a smug little sermonette congratulating the pop virus for threatening "an era of mindless promiscuity"). The question was "whether this was truly a substantial enough subject." But once the bureaus started reporting, says Porterfield, "the figures were overwhelming." Timing Is Everything

Just ask Esquire, which got the first serial rights to the hot Begelgate expose' "Indecent Exposure" for its September issue--but then Morrow decided to rush the books into stores last week. Or ask Playboy. Its big August story, "Alexander Haig: The Inside Story of a Cunning Man's Rise to Power," suddenly lost its impact when Haig resigned. It might not have had much anyway. Author Roger Morris argues that Haig's ascension (1969-73) "happened largely out of sight," but draws heavily on published accounts as well as his own experience on the National Security Council. Conspicuously absent: any comment from the syntax-grinding general himself.

But Playboy couldn't be more timely in its lively interview with Akio Morita, 61, head of the $5-billion Sony Corp.--especially in the wake of the Hitachi and Mitsui scandals. Morita grew up rich (his father had a Buick, a GE washing machine and Westinghouse refrigerator), left the family soy-sauce empire for a brief fling with rice-cookers, designed weapons during the war, visited America ("I found that all made-in-Japan goods were very shabby stuff"), and ended up leading the transistor boom in sound reproduction. Now he wears Western suits, is addicted to hamburgers, Wagner and Brahms, says America "has spoiled the Japanese people with its military protection" and thinks U. S. businessmen are cowardly. ("American mangagement no longer likes to make decisions. No one takes responsibility. That's why the consulting business is so good . . . ") He says we have too many lawyers, not enough engineers, the wrong kind of unions, over-migratory executives and too little interest in foreign markets. What's his answer? "Learn Japanese." The State of the Union

It's a slack month for politics buffs. Inquiry ranks the U. S. senators it feels are most prone to vote for government control of our lives. Top five: Sasser, Jackson, Byrd, Inouye and Heflin. Most anti-control: Proxmire, Roth, Kennedy, Hart and Tsongas. And if you're still reading The New Republic after Martin Peretz' intemperate first-person polemic in the Aug. 2 issue (damning much press coverage of the Israeli incursion in Lebanon, which Peretz finds "measured and careful" and, yes, "humane"), then see the Aug. 9 issue, which argues that President Reagan's recent certification of El Salvador for continued military aid could blight the future of land reform there.

Atlantic beats the August blahs with a brace of tirades. Richard Neely, a West Virginia appeals judge, cites a number of obstacles to court expansion--and thus to more crime convictions--including New York City ("If the number of judges is increased, more civil cases can be heard," billions of dollars of which are against the city itself, which thus "cannot afford an efficient court system, because it would be bankrupt beyond bailout if all these suits came to trial in one or two years") and insurance companies, with their vested interest in long-delayed settlements. And embattled psychologist R. J. Herrnstein argues that the whole heredity vs. environment controversy over IQ scores is a bogus issue contrived by nitwit journalists. The scientific consensus, he says, is that between 70 and 80 percent of variation in intelligence is determined by heredity and that's that. Pretty raw stuff for a Harvard don, but fascinating.

And if you're still wondering what's wrong with the District government, Psychology Today reports that people who persistently fall asleep at their desks may be suffering from the dread hypersomnia, resulting in frequent "microsleeps" of several seconds' duration. "Though they are often ridiculed, their condition is obviously no joke," says PT. You bet: Just call the Department of Motor Vehicles. Also in PT--the art of lying and a study that shows that super salesmen use the same techniques as clinical hypnotists. Dateline Washington

Outside magazine (there's that Tiegs woman again--out of focus--on the cover!) picks D.C. as one of America's 10 "best outdoor towns." Have they been here in August? . . . Horizon has a handsome cover story on Raphael Soyer with comments by friend and collaborator Isaac Bashevis Singer. A retrospective of Soyer's prints and paintings opens Thursday at the Hirshhorn . . . Match your pick of Washington's nine best restaurants against those in Esquire--and match their cuisines against Jim Quinn's gag-provoking probe into restaurant technology in Harper's . . . Columbia Journalism Review explains how the Reagan administration "has placed unprecedented restrictions on press access to intelligence information," yet often uses "leaks and declassification to support its foreign policy." . . . And there's new hope for federal types who secretly fear that folks outside the Beltway don't care what's happening here. A recent report in Advertising Age points to a mag-a-boom in political and foreign-affairs coverage, a trend likely to be lucrative for Esquire, Harper's, Rolling Stone, Atlantic, The New York Times Magazine and the upcoming weekly national edition of The Washington Post. Other Best Bets

Washington Monthly's intriguing (but much too brief) lead story outlines how the Penn Central Corp.: a) rose from bankruptcy to the top third of the Fortune 500 with a mega-billion boost from Uncle Sam; b) paid no income tax on its 1981 earnings of $290 million; and c) wants nothing to do with railroads. And see Harper's cover story by Edward Banfield arguing that the republic would be best served if we filled our museums with high-quality reproductions instead of originals. "How many people would not dream of having a 'fake' Rembrandt on their walls," he asks, and "yet own and enjoy record sets of the Beethoven symphonies?" Where are standards? Try Richard Restak, the Georgetown University neurologist whose brisk and lucid overview of brain research (it's "unlike any other structure in the universe") appears in The Wilson Quarterly.

Both Omni and High Technology (which, with its less-technical sister publication Technology Illustrated, is going monthly early next year) have electrifying features on computer modeling. Remember the futuristic circuitscapes in "Tron"? Well, the potential for industrial innovation and efficiency is revolutionary. Just tell the design program what your widget looks like, and the computer will make a full-color picture, rotate its parts (calculating stresses and waste motions), even produce an exploded view. Take that, Akio Morita! Another milestone in Western science: Home Video this month reports on "pornware," the graphically explicit, X-rated home-computer programs which now have their own magazine, The Dirty Book. Back of the Book

You wouldn't think "The Village Voice Anthology (1956-1980)" would contain many surprises. But it did for several contributors whose work appears therein--including Pete Hamill--who heard about the project for the first time when the Morrow book was reviewed in The Times last month. Anthology editor Geoffrey Stokes blames a business-side communications snafu.

The boys in the front office were probably reading a magazine: The Audit Bureau of Circulations recently reported that total circulation of consumer magazines (as opposed to trade or business journals) increased 3.1 percent in 1981--the second-largest hike since 1966. The new record: 289,565,220 copies per issue. Fifteen years ago, there were 276 consumer magazines; last year, 417.

CJR reprints this headline from The Guardian about indecision among England's liberals over the Falklands war: "British left waffles on Falklands." . . . Why Mom Doesn't Disco Any More: Omni reports that rock music "seems to throw the fetus into violent paroxysms of kicking and distress" . . . And speaking of the decline of the West, Young Miss recently asked its readers to name "the celebrities you admire most in the world." The results in the August issue show that both Ronald and Nancy Reagan were outpolled by animals. The president (14th) ran behind a dead cat (Morris, seventh) and a live dog (Benji, fifth). The first lady placed 21st--well behind Miss Piggy (fifth). Most admired males: John Schneider and Burt Reynolds. Brooke Shields and Princess Di took the distaff laurels . . . No word yet on the prognosis for Forecast, which is skipping its August issue while "still in a state of flux," says quondam publisher T. Dean Reed.

The Baron Frankenstein Award for Aggressive Fund-Raising goes to The Nation, for this discreetly hopeful ad: "When making out your will, please consider making a bequest to The Nation." Oh Death, where is thy sting? . . . And the Clifford Irving Trophy for Editorial Ingenuity to the National Examiner for this recent bannered feature: "HITLER IS ALIVE. At age 93, Nazi madman masterminded Argentina's invasion of the Falklands." (George Steiner, call your office!) . . . And finally, Deep-Think at Cosmo: Its full-page ad in The New York Times had the customary photo of a chesty damsel, but the text (by Helen Gurley Brown) attacked one of the paramount moral crises of our time: "How do you rationalize loving Judith Leiber hand bags and Ralph Lauren hacking jackets with also loving humanity?" It's a dilemma that tortures countless millions of Americans, but "don't get the guilts," sez Cosmo: "You earned the money!" Thanks from a grateful nation.