In My Time (12 page)

The freeze was simple enough. Nobody was to raise wages or prices. But the follow-on, which became known as Phase Two, would have to have rules covering all sorts of things, from permitted increases in union contracts to the price of dill pickles, for the period until market forces ruled again. The deadline for moving from the freeze to Phase Two came fast, and the two entities that were supposed to write the regulations, the Pay Board and the Price Commission, wrangled and dithered. When it looked as though they were going to miss a crucial deadline for getting regulations published in the
Federal Register,
Rumsfeld decided to take things in hand. He assembled Jack Grayson, the chairman of the Price Commission, and about a dozen of our CLC staff and said that we wouldn’t be leaving until we had the regulations ready for the printer. We set up in Rumsfeld’s outer office, and as others paced and dictated, I sat at one of the secretary’s desks and typed everything on an IBM Selectric typewriter. By nine the next morning, when the secretaries arrived and emptied the ashtrays and replenished the coffee, we had written the regulations that would now be governing a major share of the U.S. economy. The degree of detail we achieved during our overnighter was truly impressive. We drew distinctions between apples and applesauce; popped and unpopped corn; raw cabbage and packaged slaw; fresh oranges and glazed citrus peel; garden plants, cut flowers, and floral wreaths. We regulated seafood products “including those which have been shelled, shucked, iced, skinned, scaled, eviscerated, or decapitated.” We covered products custom-made to individual order, including leather goods, fur apparel, jewelry, and
wigs and toupees
.

REGULATING ENERGY PRICES WAS one of the most complex and complicated tasks the CLC had to address. At one point, when we were up against a deadline to set prices for the coming week on oil, we
discovered that there was no one available with expertise in that area. Then someone mentioned that Chachi Owens was from Texas and that Texas had a lot of oil, so we called Chachi and asked him to stop by. At that time he was working for the public affairs office. If the CLC was going to permit the price of bread to rise by two cents the following week, it was Chachi Owens who would bring you that news.

Aside from his resonant voice, his claim to fame was that he had played fullback for Darrell Royal at the University of Texas. He turned out to be a very bright young man. Perhaps it was his Texas confidence, or perhaps it was the result of the coaching he’d received, but he had no hesitation about sitting down and writing the oil regs we needed.

As assistant director for operations, I oversaw some three thousand IRS agents tasked with enforcing wage and price controls. At one point I sent a team of them to visit the major food chains, such as Safeway and Giant, and report on how they were complying with our regulations. The agents reported back that, depending on how a single regulation was applied, any one of several different prices might result, from one high enough to give the chain a significant profit to one low enough to cause a terrible loss. It was pretty clear which option the chains would pick—and who could blame them? They were dealing rationally with the arbitrary rules we were trying to impose.

As a junior staffer in the White House, I didn’t see that much of the president, but occasionally I attended meetings at which he presided, usually so I could flip charts as Rumsfeld made a presentation. One day at a meeting in the Cabinet Room, I sat in one of the chairs lining the wall as the president’s economic advisors debated reimposing a freeze on food prices. After letting the discussion continue for a while, Nixon finally spoke. He recalled a conversation he had had with Nikita Khrushchev at the Soviet premier’s dacha back in 1959. After a long lunch, Khrushchev became expansive. He said that sometimes in order to be a statesman, you have to be a politician. If the public sees an imaginary river in front of them, the politician doesn’t tell them there’s no river. A politician builds an imaginary bridge over the imaginary river. Nixon told the story as though there was guidance to be found in
it, and I took his point to be that if the public thought food prices were a problem, the politician should offer a solution, thereby preserving his ability to make statesmanlike decisions another day.

A year after I heard President Nixon tell the Khrushchev story, he imposed another price freeze, apparently hoping in the midst of Watergate for some political benefit. But he didn’t get it. Among other things, the freeze made raising animals for market unprofitable. A Texas hatchery drowned forty-three thousand baby chicks. Pigs and cows were slaughtered—and the president announced an early end to his 1973
effort to freeze prices
.

By this time I had grown wary of government economic control. At the start of my tenure at the Cost of Living Council, when I had been immersed in getting things going, I hadn’t had much time to think about it, but by now I realized that every day millions of people were making millions of economic decisions, and it didn’t matter how smart we were or how many regulations we wrote. There wasn’t any way we could intervene without doing more harm than good.

These thoughts confirmed my innate skepticism about what government could and couldn’t do. We could write checks, and we could collect taxes. We could run the whole military and defense side of things. But when something as big and ham-handed as the federal government tries to run something as complex and dynamic as the American economy, the result is sure to be a train wreck.

AT CLC RUMSFELD CONTINUED his usual pace, in early, out late, and cramming more into his average day than many manage in a busy week. And he was sending out hundreds of small notes, requests for information or demands for action that were so numerous we called them “snowflakes.” His secretary, Brenda Williams, would type them up in memo form for forwarding to the relevant departments or individuals. Lest the whole place be overwhelmed, however, she would bring the snowflake memos to me first, so I could try to put them in some kind of realistic priority, based on my knowledge of what Rumsfeld really wanted and needed. I would decide which ones should be sent and
which could probably be safely ignored. Brenda kept copies of both in separate files.

One morning my direct line from Rumsfeld rang. “Get down here now,” he said. When I rushed in, Brenda was already there. Rumsfeld was looking at two substantial piles of paper on his desk. I could see that they were the carbon copies of the snowflakes and I could figure out what the two piles represented—what we’d sent and what we hadn’t.

After a moment of silence, he said calmly, “I just want you to know that I know what you’re doing.” That was it. And that was all. We were dismissed and we returned sheepishly to our desks—and continued exactly as before. But we had shared what I think of as a classic Don Rumsfeld moment. He had somehow figured out what we were doing. He didn’t say that we had been wrong. And he didn’t tell us not to do it anymore. But he wanted us to know that he knew. So he told us and let us draw our own conclusions.

ON JUNE 12, 1972, George Shultz, who had been director of the Office of Management and Budget, was sworn in as secretary of the Treasury. On his first day in his new office, Secretary Shultz scheduled a meeting with the CLC senior staff. He closed the door, sat down, and said, “Okay, gentlemen, the first thing we’re going to do is get out of these controls.”

And that is what we did. We put together a strategy for moving into Phase Three (which would depend on voluntary self-restraint by business and labor regarding increases in prices and wages), and, finally, into Phase Four (which was intended to complete the return to the free market). Rumsfeld and I left the Cost of Living Council before these strategies were fully implemented. Others would oversee the process by which a massive interference with the American economy ended nearly three years after it had begun. Or mostly ended. In the oil industry, the price controls that went on in 1971 didn’t come off until President Reagan removed them in 1981. For nearly a decade, price controls on oil and gas acted as a disincentive to achieving the fuel efficiency that we finally came to recognize as crucial.

__________

ON NOVEMBER 7, 1972, Richard Nixon was reelected in one of the biggest victories in presidential history. Lynne and I stood near the front of the crowd that gathered to celebrate his victory in the ballroom of the Shoreham Hotel. People were excited—at least until the president took the stage. He was subdued, not at all like a man who had just been reelected to the presidency with forty-nine out of fifty states. It was almost as though he were anticipating the scandal and tragedy that would soon engulf his administration.

Over the last several months in the White House and during the campaign, Rumsfeld had become increasingly disenchanted with the president and his senior staff; and, at least on the part of the senior staff, I think the feeling had been reciprocated. If they saw him as a non–team player, he saw them as out of touch and riding for a fall. He turned down the domestic positions they offered him, including head of the Republican Party, and accepted an appointment as ambassador to NATO, which was headquartered in Belgium.

Rumsfeld asked me if I would like to go to Brussels with him, but it didn’t seem right for me and my family, and I had another opportunity. A group of friends, Alan Woods, Bruce Bradley, Tony Brush, and Paul Ripp, had set up an investment advisory business in Washington. Alan was getting ready to leave, and I was asked to join the firm as a partner. At Bradley Woods we gave political and policy advice to clients, which were mostly big banks, insurance companies, and mutual funds. We deciphered legislation and explained how it might impact portfolios and investment strategies. Having been a behind-the-scenes man for so long, I found that I actually enjoyed getting up in front of groups and talking about what I knew and thought and answering questions.

I quickly got used to relatively normal working days, having weekends off, and moving beyond a government salary. Lynne and I bought our first house, a three-bedroom in Bethesda, Maryland, with a fenced-in yard for the kids and the dog.

LIKE EVERYONE ELSE, I was first surprised and then appalled as the details of the Watergate scandal reached critical mass in the spring of
1973. I had known some of the people involved. I had attended meetings with them and eaten lunch with them at the round staff table in the White House Mess.

I had very few direct dealings with Haldeman or Ehrlichman on a daily basis when I was working for Rumsfeld. But one incident was perhaps emblematic of the attitude that led to some of the problems. In February 1970, Rumsfeld took a few days to go skiing with his family in Colorado. When an urgent meeting was scheduled in Washington, we decided that I would ride out on the military plane that was going to pick him up, so that I could bring all the necessary documents and briefings and we could work together on the flight back to D.C. Then I got a call asking if I would mind leaving early enough to make a detour to deliver an important package to Ehrlichman, who was skiing in Sun Valley, Idaho.

A White House car picked me up at home and brought me to the West Wing, where the package—a securely taped manila envelope—was waiting. We continued on to Andrews Air Force Base, where I boarded a small government jet. When we landed in Idaho, a car sped out on the tarmac. Two armed MPs emerged and boarded the plane. One introduced himself as the courier who would deliver the package to Ehrlichman. I handed it to him and figured that my assignment was now completed.

“Sir, do you know what the contents are?” he asked. I told him that I didn’t know. He asked if I minded whether he opened it, and I told him to go ahead if he thought it was important. He slit the tape, opened the flap, and removed copies of the most recent issues of
Time, Newsweek,
and
U.S. News & World Report.
I hid my dismay as the MPs carefully put the magazines back in the envelope, saluted, and disembarked. Rumsfeld ran such an obsessively frugal and ethical operation that I could hardly believe someone would send a government plane eight hundred miles out of the way to deliver magazines. I later wondered if this episode didn’t reveal some of the arrogance that led to Watergate.

FROM THE OPENING OF the Senate Watergate committee hearings in May 1973 until the House Judiciary Committee voted out three
articles of impeachment in July 1974, the flow of stories and leaks and charges went on day after day, week after week, month after month. The scandal unfolded like a novel, with one stunning revelation after another, most of them coming by way of the
Washington Post.
Many mornings Lynne and I didn’t want to wait for the newspaper to be delivered to our door, so one of us would leave our Bethesda house in the predawn hours and walk to a nearby street corner, where a delivery truck dropped off bundles of the
Post.
We’d extract a copy, leave a note for the paper boy telling him not to deliver us another one, and then head home to read about the unraveling of the Nixon administration. It was a sad and amazing spectacle, and as I watched the story unwind, I felt a sense of relief in being away from the whole thing.

Deciding to get out of government when Don Rumsfeld departed for Brussels was turning out to be one of my wiser choices in life. I had no idea that I was soon to be drawn back in.

A phone call was my first indication. It came on August 8, after I’d had dinner at the northwest Washington home of our friends Bill and Janet Walker. My family was in Wyoming, so the Walkers had invited me over, and we watched President Nixon announce that he would resign the next day. When I got back to my empty house in Bethesda, the phone was ringing. It was Lee Goodell, Don’s assistant, telling me that Don had been asked to come back to Washington by Vice President Gerald Ford. Would I meet his flight, she asked?

The next day I watched President Nixon’s farewell address on a television set in my H Street office. I watched the Fords walk him out to the helicopter and saw Gerald Ford sworn in at noon. Then I headed for Dulles International Airport, where Rumsfeld’s plane would soon be landing.