Leftward Ho! : Finding a New Center for U.S. Politics : Bill Clinton wants to redefine the political center. It was shifted to the right over the last 12 years, but now he aims to move it to the left.

Forget the talk about Bill Clinton’s two-tier economic strategy of pairing his populist bus trips and participatory town meetings with appointments of insiders to please Wall Street and Congress. The new President’s economic plans, previewed in last week’s show-and-tell Little Rock summit, are more complex--he already shows signs of redefining the center in U.S. politics leftward from where it was under Ronald Reagan and George Bush.

A year or two ago, conservatism or even centrism was incompatible with positions like increased taxes on the rich, managed rather than free trade and support for a greater government role in the economy--but Clinton’s maneuvers are changing this. The Little Rock summit has even redefined investment away from the old view of cutting taxes on the rich to the notion of public investment , which used to be called government spending. This is watershed stuff, if it sticks.

The populist image-mongering is important, of course. The talkfest in Little Rock was not only politically shrewd in reinstructing Middle America on the precariousness of the economy; it was also stylistic Perotism, a clever bow to the homemade charts, surprise Nielsen ratings and 19% of the vote racked up Nov. 3 by Ross Perot. There’s more such imagery up Clinton’s sleeve as part of a deliberate strategy to hook voters with little-guy symbolism, while the shark-skin suits wheel and deal with Capitol Hill and the financial markets.

The ultimate question is whether these calculations spring from populism or opportunism. The two Democratic Presidents from whom Clinton is borrowing outsider techniques--Jimmy Carter and Andrew Jackson--were the genuine article. Carter had a blueprint drawn up by aide Patrick Caddell for all sorts of populist tactics and communications. It failed because Carter was too much an outsider to make Washington work, a lesson Clinton has learned.

Jackson, who invited the people into the White House for a chaotic post-Inaugural reception in 1829, delivered on his stylistic populism by going toe-to-toe in a slugfest with the Bank of the United States and the U.S. financial Establishment.

Yet those who fault Clinton for appointing Establishment figures to key economic posts, especially soon-to-be Treasury secretary Lloyd M. Bentsen and soon-to-be budget director Leon E. Panetta just don’t know Democratic Party history.

Since 1933, three Democratic presidents--Franklin D. Roosevelt, John F.. Kennedy and Carter--have entered the White House by election, in each case after a slowdown (or worse) in the economy. All carefully sought to reassure business and finance with “safe” appointees. Roosevelt’s first Treasury secretary, William H. Woodin, was a balanced-budget conservative. Kennedy’s first pick as Treasury secretary was a Republican from Wall Street--C. Douglas Dillon. Carter’s first economic appointments in 1977 involved two Fortune 500 chief executives for secretary of the Treasury and Federal Reserve Board chairman

If Clinton, by contrast, had put left-liberal economists or professors into these slots, it would have been revolutionary, and the financial markets would have squawked. Besides, in the successful Democratic regimes of the early 1930s and 1960s, the first-stage economic conservatism was just that--a stage. By the mid-1930s and mid-1960s, Democrats did what Democrats like to do: Expand the federal economic role, regulation and the deficit. With the typical Democratic Administration, the key is less the Establishment figures up front than the activists in the wings--and the latter are numerous.

Clinton, in turn, has almost certainly learned a second lesson from the Carter Administration. It pursued a relatively conservative economics--in 1979 appointing as Fed chairman a tight-money man, Paul A. Volcker, who promptly raised interest rates--and wound up with a fatal election-year recession in 1980. Clinton must remember this, because he refused to appoint Volcker as his own Treasury secretary, despite Volcker’s strong support in the bond markets.

At the same time, Clinton also recognizes that Wall Street and the bond markets have enormous leverage because of a burden no other incoming 20th-Century Democratic Administration has faced: huge budget deficits. Too much emphasis on new spending could send interest rates spiraling upward.

This threat helps explain the selection of Wall Streeters Robert B. Rubin and Roger C. Altman as national economic adviser and deputy Treasury secretary, respectively. They’ll serve as ambassadors to the capital markets.

But the cynical camp also deserves to be heard. If Clinton were an insider Washington Democrat at heart, he’d already be at work trying to build a new economic power axis--like Democrats have before--that included the liberal part of Wall Street, while delivering the necessary patronage there and to other critical constituencies. There’s some evidence that he’s indeed doing this--witness the highly political guest list for the Little Rock summit.

From 1933 to 1968, when the Democrats and their New Deal coalition controlled the White House for 28 years out of 36, they built an economic power axis described by many political scientists as pivoting first on Texas, especially the oil industry, and then on the liberal New York moneymen concentrated in firms like Goldman Sachs, Lehman Bros. and Lazard Freres & Co.

Now, a new version is taking shape. Bentsen represents today’s Texas economy, less dependent on oil and gas and increasingly concerned with banks, real estate and electronics. Clinton’s own ties in Arkansas reinforces the pitch to the broader bloc of critical South-Central states: with Stephens, Inc., the best-capitalized investment firm west of the Mississippi; with Wal-Mart, the giant retailer; with agribusiness, and with Arkla Inc., the Little Rock-based, Fortune 500 firm whose CEO, Thomas (Mack) McLarty III, has just been named as Clinton’s White House chief of staff.

If the Texas-Arkansas crowd was well-represented at the Little Rock meeting, so was the Wall Street linchpin of the old-and-new axis--Felix G. Rohatyn from Lazard Freres and a group of current and former players from Goldman Sachs. There is also a new, third leg of the axis: high-tech, especially California’s Silicon Valley crowd. The Pacific wasn’t critical back in the 1930s, but now it will be, because recession-scarred California is ripe to be knit into a Democratic economic coalition.

Quite a few Silicon Valley Republicans bolted to support Clinton because of his perceived commitment to a high-tech business-government partnership, and some of the important ones were in Little Rock, including recently retired Hewlett-Packard CEO John A. Young. Another sign of Clinton’s commitment is his decision to name California’s Laura D’Andrea Tyson, a high-tech and trade economist, as chairman of the Council of Economic Advisers. If the Democrats can indeed put together a New York-Texas-California economic underpinning of their political support, it could mean a longer-term oalition.

In the meantime, Clinton’s summit was a success also as a possible launching pad for that new Democratic relationship with business. Clinton wants to be pro-business on his own terms, and substantial numbers of businessmen seem interested in the courtship This remains true even though Reagan-Bush era deregulation, free trade and tax-cut economics are being replaced by a new philosophy of government activism, higher taxes on the rich, more public investment and strong economic nationalism.

If Clinton makes this new relationship work, and restores the economy in the process, he could succeed in redefining the political center in the United States, just as Richard M. Nixon did with cultural issues in 1968-72, and Ronald Reagan did for economic issues in the early 1980s.

There’s only one slight hitch. First, Clinton has to reverse the accumulating national economic problems of 20 years, the same forces that have overcome the best efforts of the last five Presidents.