Reagan's hometown backs its native son

The winds of criticism may be blowing hard against Ronald Reagan's economic policies back east. But every blast from the likes of House Speaker Thomas P. O'Neill Jr. and AFL-CIO president Lane Kirkland only confirms the conviction of some residents of this small Midwestern town that the man in the White House is on the right track.

''Those people have been in power too long, and they think he's doing things wrong just because he's doing them differently,'' insists George Weiser, owner and manager of Dixon Hardware. ''I've been waiting all my life for someone to come along like him who's not afraid to do what he thinks is right. Economically , things may get worse before they get better, but the things he's doing have got to be done.''

''No program up to now has worked - why not give this one a chance?'' agrees Chuck Scriven, Republican chairman of Lee County and advertising director of the Dixon Evening Telegraph. ''Even if it doesn't work, he's doing what has to be done in cutting government spending. We've got to get this country on an honest economy.''

Admittedly, Dixon (population: 15,659; location: about 100 miles west of Chicago) is not exactly average Middle America. It happens to be the town where Ronald Reagan spent his boyhood years and the one he has described as his ''place to go back to.''

Today Dixon, which straddles Rock River with its two main streets, has the usual small-town mix of fast-food restaurants, outskirt shopping malls, a few vacant downtown stores (one saying ''God Bless America'' on its marquee), and more than two dozen churches.

Those who live in Dixon speak of it fondly in terms of its stability and moral values. And they are proud of its Reagan connection, as even a casual visitor notices. There is the low-slung white arch over Galena Ave. in the center of town built to honor returning World War I veterans. It's now capped by a small ''Welcome . . . Hometown of Ronald Reagan'' sign. To the left is a souvenir shop selling everything from spoons to T-shirts.

And a few blocks away is the house where the President spent his ''formative'' years, as the sign out front puts it. A small group, organized by a local postman, bought the house, one of four or five here the Reagan family lived in, for $31,500 last year and has already paid off more than half the mortgage through local fund raising.

For a mix of reasons, from hometown pride to solid confidence in the President's economic plans, voters here supported Mr. Reagan by a 5-to-1 margin last November.

Yet, like most other Midwest towns these days, Dixon has its share of economic troubles. The annual Christmas decorations downtown are already in place, but retailers report that local spending has been down and could stay down over the holidays. Dixon's diversified economy and the traditional reluctance of its workers to register if out of a job have kept official unemployment figures lower than average. But some local industries recently moved to a four-day week to avoid layoffs, and Dixon Mayor George Lindquist estimates actual unemployment at 9 or 10 percent.

''I judge that by the number coming into City Hall looking for work,'' he says.

Yet most people here seem ready to ride out the hard times in the expectation that their man in Washington eventually will set things right. In interviews, many stress that Mr. Reagan inherited a nest of thorny economic problems, only started his program in October, and, above all, deserves more time before being judged.

As one local farmer put it during a morning discussion at the local doughnut shop: ''After all, Reagan didn't start this mess.''

''I personally think that supply side is the way to go,'' says Richard W. Durkes, president of Dixon's City Bank and Trust Company. ''But President Reagan has his work cut out for him over the next six months, and I think it's far too early to know whether it's going to work or not. We may not see any results until the end of his first term.''

''I credit Reagan for having the courage of his convictions - for his willingness to ride it out and make it work,'' says Robert E. Mansen, president of the local Chamber of Commerce and a man who keeps a White House shaped candy dish of jelly beans on his desk at Commonwealth Edison, where he's district manager. ''People will be pinched in the process but they have to realize that the money in their pocket is going to be more valuable because of it. By reducing inflation, you're way ahead of the game.''

For some, familiarity with the President's roots and their confidence in his honesty and sincerity is enough to go on.''His economic theory sounds simple - he feels you have to have the money before you spend it - but he's no lightweight,'' says Francis (Hank) Henry, who runs a men's clothing store in town and who has known the President since grade school days.

''His family came from nothing, and he worked his way all the way up. And even though he's been in Hollywood, he's never forgotten the value of a dollar.''

Doubts about the success of the Reagan program voiced by Budget Director David A. Stockman in a recent magazine interview tend to be viewed here as part media distortion and part personal indiscretion, but not that damaging to Reagan's program.

''You can't fire everybody who now and then makes a mistake,'' says Mr. Mansen of the Chamber of Commerce. ''We don't pay anyone enough these days to be perfect.''

Dean Harrison, who has a Chevrolet dealership on Peoria Street and welcomes the recent fall in interest rates as a needed spur to sales, says he thinks Mr. Stockman's reference to supply-side theory as ''trickle down'' economics may be more of a vocabulary misstep than anything else.

''I don't like the expression, but indirectly we've all known that so called supply-side economics favors the industrial and business community,'' he says. ''We've got to help the ones that can spend the money, create the jobs, and get productivity back.''

''I think a lot of people here think that Reagan is going through the same kind of shakedown period with his Cabinet as Carter did with those who kind of let him down,'' says Mayor Lindquist, the son of Swedish immigrants who is currently in his fourth term. ''I don't think most people here are that policy oriented - they follow the party line - but I think they all hope the President will come off well in all of these problems. A lot of the reason is local pride.''

Admittedly, Dixon residents have a strong vested interest in Reagan. His fame has helped spark an increase in tourism and an enthusiastic local effort to spur business growth. But so far, the business rush hasn't happened. As the mayor explains, the job of courting new industry is a slow, often quiet, process where decisions are usually based on many economic and social factors.