THE CLINTON ADMINISTRATION : UC Economist Known for Strong Trade Stance : Appointment: Laura D’Andrea Tyson, named to head Council of Economic Advisers, has advocated ‘countervailing subsidies’ to fight overseas competition that receives government help.

Laura D’Andrea Tyson, the UC Berkeley economist picked by President-elect Bill Clinton on Friday to head the Council of Economic Advisers, calls herself a “cautious activist” on trade issues. Opponents brand her a “protectionist.”

By whatever label, Tyson advocates something that makes die-hard defenders of free trade quiver: an aggressive industrial policy that would put U.S. industries on a more level playing field with their subsidized and heavily promoted counterparts worldwide. Among other schemes, she proposes that the government provide “countervailing subsidies” to help key U.S. industries that can prove they are being harmed by subsidized counterparts overseas.

As head of the White House Council of Economic Advisers, the college professor and consultant will have a shot at influencing national policies on economics and trade.

Her appointment to replace the Bush Administration’s Michael Boskin is significant on another count: She would be the first woman to head the three-member group, which has guided every President since Harry S. Truman and was created in 1946, a year before she was born.

“It never occurred to me . . . that I would have the opportunity to put (my) ideas into effect,” Tyson said at a news conference with Clinton in Little Rock, Ark.

But how big a part Tyson--an unknown outside the arcane world of economics--will play remains to be seen. In the past, the council head has often been frustrated by a lack of power.

Clinton on Thursday appointed Robert E. Rubin, a co-chairman of Goldman, Sachs & Co., as chairman of a new National Economic Council, and he is expected to have a key role in coordinating policies developed throughout the Administration. Many economists suggest that Tyson’s relatively narrow perspective and lack of experience with macroeconomic policy would indicate that the council will wield relatively less clout than in the past.

Tyson’s 18-page resume gives new meaning to the term “overachiever.” She has been a professor of economics and business administration at Berkeley since 1978. She also directs the Institute of International Studies and is research director for the Berkeley Roundtable on the International Economy, known as BRIE.

Before joining the Clinton transition team in November to steer his policies on technology, manufacturing and small business, she served as a visiting scholar at the Institute for International Economics, a liberal think tank in Washington. She graduated summa cum laude from Smith College in 1969 and got a Ph.D. in economics from Massachusetts Institute of Technology in 1974.

Tyson, 45, is also a member of New York Gov. Mario Cuomo’s Commission on Trade and Competitiveness, the advisory board of the Economic Strategy Institute, the Conference Board Economics Colloquium, the Economic Policy Institute Research Council, the Council on Foreign Relations and the Subcommittee on a Global Economic Strategy for the United States, part of the Committee for Economic Development, an organization of business and academic leaders.

She previously was a visiting professor at Harvard, Princeton and MIT, and she has been an economic consultant to several companies and councils, including President Reagan’s Commission on Industrial Competitiveness.

At Princeton, she was adept at teaching “from the perspective of economics, not politics,” recalled Mike McCurry, a longtime Democratic Party strategist who had Tyson as a thesis adviser in the 1970s. “That was the first place I ever heard a definitive economic theory on why the Cold War would end in the West’s favor.”

In Tyson’s spare moments, she writes books and articles, prodigiously. In addition to being a regular contributor to the Los Angeles Times Board of Economists, she has written extensively on the economies of Eastern Europe and on various aspects of international trade and competitiveness.

In her most recent book--”Who’s Bashing Whom? Trade Conflict in High-Technology Industries,” published in November--she advocates that the government take steps to aid important industries such as commercial aerospace and high technology. The concept of free trade is meaningless, she argues, if other countries are bolstering their companies with financial aid of any sort, known to economists as “managed trade.”

“We can no longer afford to ignore the efforts of Japan and Europe to promote their own high-technology producers,” she wrote. “Nor . . . can we realistically expect our trading partners to adopt international rules that reflect our own ideological preferences.”

Tyson, a devoted Democrat who believes that government should actively seek to create jobs through investment and to train workers, was introduced to Clinton last August in Little Rock, where, along with several other economists, she met with him for several hours.

A resident of Berkeley, she is married to pianist and writer Erik Tarloff; their son, Elliott, attends a private grade school in Oakland. Tarloff wrote the screenplays for “Cheetah,” a 1989 Walt Disney film, and “Car 54, Where Are You?,” an Orion Pictures movie version of the old TV series that has not yet been released.

Friends and colleagues describe Tyson as assertive, congenial and an even-handed pragmatist who strongly fights for her views but bends when necessary. She is an avid reader whose knowledge about current affairs is said to be encyclopedic.

“If she were a man, I’d say she’s princely,” said David J. Teece, a professor at UC Berkeley’s Haas School of Business. “I have no doubt . . . she’s going to be a consensus builder (in Washington). . . . She is not an ideologue.”

Alan Blinder, a Princeton University economist and Business Week columnist who knew her at MIT, noted that “she is sometimes tarred as a protectionist, and she’s not. But is she a pure laissez faire economist? No.”

Detractors fear that Tyson could throw her customary caution to the winds in her zeal to effect change.

“My fear is that Tyson will try . . . to steer resources to favor larger, more established companies,” said Joel Kotkin, a senior fellow at the Center for the New West and an international fellow at the Pepperdine University School of Business and Management. “That would be quite disastrous.”

Kotkin noted that the Berkeley Roundtable has had much support over the years from large semiconductor producers such as Intel Corp. Rather than protect them, Kotkin said, the government should be “encouraging turbulence and dynamism.” That, he suggested, would mean helping to make capital available for entrepreneurial companies that could become competitors of the entrenched giants.

Among Tyson’s likely goals at the council will be to encourage policies to enhance education, build infrastructure and encourage research. During the Bush Administration, she stated that government resources devoted to trade policy have been “appallingly small.”

The departure of Tyson, known for her enthusiasm and energy, poses a problem for John M. Quigley, chairman of Berkeley’s economics department. Under university policy, Tyson can seek a two-year leave of absence for government service. Quigley was on the phone Friday trying to find a replacement professor for Tyson’s popular undergraduate course on comparative economic systems, for which 150 students have signed up for the spring term. It starts in six weeks.

Times staff writer Jonathan Peterson in Los Angeles contributed to this story.

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