When it comes to Washington insiders, Ted Van Dyk is about as inside as they get.

Over the past three decades, Van Dyk has donned an array of hats in the world of beltway politics. He has analyzed Soviet policy for the Pentagon, served as a top official at the Agency for International Development and advised nearly every Democratic presidential nominee. Between 1964 and 1968, he was chief speechwriter and senior policy aide to Vice President Hubert Humphrey. After that, he briefly left the capital to serve as vice president of Columbia University, eventually returning to launch a public policy think tank. He also bears the distinction of having hired a certain Rhodes Scholar from Arkansas named Bill Clinton, as an organizer for George McGovern's presidential campaign in 1972.

So what is Van Dyk doing in Santa Monica?

He's trying to transform the Milken Institute into a public policy research facility on par with the Brookings Institution and the American Enterprise Institute.

Such organizations, according to Van Dyk, tend to ignore the world outside the beltway, leaving a virtually wide-open field for the Milken Institute. Working alongside Michael Milken and the institute's president, former Merrill Lynch Chief Economist Donald H. Straszheim, Van Dyk intends to position the institute as the source for research on such issues as access to capital, the global economy and specifically, California's role in it.

Question: After so many years in Washington, what enticed you to come West?

Answer: My whole life, I've been interested in public policy. I ran a think tank myself I was president of a place called the Center for National Policy for five years, from 1981 to 1985. But by the time I was done, I was exhausted. Instead of thinking of solutions to policy problems, I was spending most of my time raising money to keep things going. One of the things about a think tank such as the Milken Institute, which has its resources, is that your agenda is not driven by the money. Here we have the luxury of setting our own subject matter. Our only job is to define the mission, hire the people and do the work. Which is wonderful luxury.

Q: What do you hope to accomplish here?

A: We've chosen a number of areas of interest: capital studies and financial markets; labor markets and human capital; demographics and regional economies; the California economy; and the global economy.

Specifically, we did not pick out the traditional Washington issues entitlement programs, fiscal policy, the deficit. These have been worked to death by Eastern think tanks. We are trying to find our niche in different subject areas, which particularly fit California and the West Coast.

Q: Does the world look much different from this vantage point?

A: It is great to be away from Washington. I was just talking to a friend in the (Clinton) administration who will remain nameless. And I told him that people are more serious about policy today in Santa Monica than they are in Washington.

Washington for the past several years has been subsumed completely by Whitewater, Monica Lewinsky and campaign finance, and because there's a Republican Congress vs. a Democratic president, no major public initiative gets undertaken. It's been a very joyless, unhappy time back there.

When I first came to Washington, President Kennedy was in office, there was a civil rights agenda, there was a social welfare agenda, we passed the Great Society. We got bogged down in Vietnam, but that was a great issue which was fought out. There was an agenda that came first. The Washington that I knew and people of my generation knew is gone.

Q: Some folks argue that with the growth of the global economy and the Pacific Rim, the nexus of power in the country is shifting from East to West anyway.

A: I don't know about that. Certainly, the population is shifting. There's an awful lot of economic and financial power in the West that used to be solely on the Eastern seaboard. The fastest-growing parts of the country are out here. The Eastern states, the rust-belt states, are losing population. So economically, politically, financially, the balance of power has moved farther west.

Globally, there has been a long romance with the theory that Asia was the economic wave of the future. But with the recent Asian crisis, Europe at this juncture is growing faster and is more prosperous and has firmer underpinnings than Asia does. But when this crisis is over, Asia will emerge stronger because they will make adjustments in policy and financial institutions.

So I don't buy the idea that the Pacific has become more important than the Atlantic. What I do buy is that in this country, the Western states and California in particular are more important all the time. And in a global economy, California is more important all the time.

Q: On a personal level, how do you like it out here?

A: I love it. I just bought a condo on the beach at the foot of Ocean Park Boulevard. I bought myself a Mercedes convertible. I got my California drivers license. I've got a lot of friends in the L.A. area. It's a terrific place. There are a lot of things to do. And most of all, my work is very important to me, so the institute is very exciting.

Q: You must be the only guy in the world who's worked for both Hubert Humphrey and Michael Milken.

A: They're very much alike very fertile minds, very populist. Mike knows all the people in this building by their first names. They all know him by his first name. He is a big champion of the underdog, hence these issues of democratization of capital, access to capital. He's very interested in civic issues. He's financed businesses, he's created jobs, he's been there for charities. Like Humphrey, he's got five ideas running at a minute. He's a lot of fun to talk with and work with because he's genuinely interested in solutions to problems.

Q: What about philosophically? I mean, Milken remains an icon of capitalism, while Humphrey still is a leading symbol of liberalism.

A: Humphrey used to use a term that he believed in "Peoples' Capitalism." He used to say, "Vote Democratic so you can live Republican." What he meant was job creation, small business, access to the power structure for all people. Mike Milken is very much on the same wavelength. They have an awful lot in common. They are both extremely democratic, with a small "d." Michael has no "great man" complex; he's a very democratic, open person, and a lot of fun for everybody to work with.

Q: In your own path from Humphrey to Milken, have your ideas about capitalism, or the economy, changed much?

A: My ideas have not changed, but I will say this: One problem that I have is that my party's ideas have not changed. The Democratic Party really got its initial intellectual energy from Franklin Roosevelt and the New Deal days. So we had Social Security, we had federal interventions, we had the WPA. We also had left over from the 1930s a kind of class warfare impulse.

But in a new economy, we need to get away from this class warfare stuff; the party needs to think in different ways about things. You still have people in Congress, from the urban districts and Northeast and Midwest districts, running on empty with a class warfare doctrine. It can get them reelected in their own districts, but it's a pretty empty doctrine for the country as a whole.

Q: How plugged in do you remain in Democratic Party circles?

A: I know everybody. Remember, I'm 63, so most of the people now who are running the place the Clintons, Al Gore, John Kerrey I knew all of these people as young organizers or hired them for campaigns. I've known them for a long, long time, and I have a lot of affection for them. I have to be out of partisan politics now, because of my job. But I've got personal views, and there are a lot of people in the party who I have a lot of respect for.

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