Known and Unknown (18 page)

Tensions appeared to come to a head in one meeting, when Kissinger expressed his concern that the State Department was doing things without coordinating them with the National Security Council, meaning him. Specifically, he believed that Secretary of State Rogers had communicated with the Soviet leadership without his knowledge. Haldeman, who was not intimidated by anyone, even the formidable Kissinger, responded that Kissinger had done the exact same thing when he met with Soviet ambassador Anatoly Dobrynin without informing Rogers. Kissinger bristled at Haldeman's suggestion. He rumbled that he had only spoken to foreign officials outside of regular channels when the President directed him not to inform the State Department. He was, of course, ignoring the possibility that Rogers had also acted at Nixon's direction. In any event, Kissinger then stormed out of the room.
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Fifteen minutes later, Kissinger returned. He informed the group that Haldeman's comment was “inadmissible.” Cryptically, he added that he was now reconsidering “the other matter” he had discussed with Haldeman. I later learned that the other matter Kissinger referred to was choosing between resigning from the faculty of Harvard to stay on in the Nixon administration—and losing tenure—or returning to academia. Kissinger, who at times used the threat of resigning as a bargaining chip, was suggesting that he might change his mind and return to Harvard unless Secretary Rogers stopped dealing with foreign governments without his knowledge.

Ultimately, Kissinger would replace William Rogers as secretary of state while retaining his position at the NSC. During the period when Henry wore both hats, all he had to do was talk to himself to ensure good communications between State and the NSC. But a president benefits from a range of viewpoints. I thought Kissinger was most effective, and President Nixon and the country better served, when he was filling a single post.

 

I
preferred having more substantive responsibilities to functioning as a general adviser and troubleshooter in the White House. The President and I had several conversations during this period in which we discussed possible future assignments for me, such as U.S. special trade representative, deputy secretary of state, and U.S. ambassador to NATO.
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He seemed to enjoy these discussions, which were an opportunity for him to be actively involved in mentoring younger members of his administration.

In fact, the President frequently considered staff shake-ups, possibly to make sure he always had fresh eyes looking at important issues—and also, I suspect, to keep people on their toes. It was something of a hobby for him—like a general war gaming moves on a map.

To this end, shortly after the 1970 midterm elections, the President called a small group to Key Biscayne for a day-long meeting.
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He was now looking ahead to his 1972 reelection campaign and told us he wanted to make some personnel changes in the administration. He mused aloud about all sorts of possibilities. As the meeting went on, I stepped out to the men's room. When I returned, the President looked at me.

“Don, we're going to make Rogers Morton Secretary of the Interior and make you Secretary of Housing and Urban Development,” Nixon said matter-of-factly. He was going to fire the current secretary of HUD, former Michigan governor George Romney. Another former governor in his cabinet, Walter Hickel, Secretary of the Interior, was going to be fired as well.

I looked around the room. The idea of my going to HUD apparently was fine by everyone else. I wondered what had happened in my absence to lead to this strange idea. I said I'd have to think about it, knowing that as a congressman I had voted against making Housing and Urban Development a cabinet-level post.
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A day or so later, I talked to Attorney General John Mitchell and told him my views. I said I thought it was unwise for the President to replace two former governors in his cabinet at the same time. I pointed out that Romney, for one, came from the key state of Michigan. As it turned out, Nixon had a bumpy time in the press when he announced his planned dismissal of Hickel at Interior. Fortunately, knowing he would get still more flak if he fired Romney, the Hickel bumps reinforced my arguments and ended the President's idea of my going to HUD.

With the 1972 presidential campaign in mind, Nixon soon had another thought for me. He suggested that I become chairman of the Committee to Reelect the President, which had the unfortunate acronym of CREEP. Running Nixon's reelection campaign might have seemed like a prestigious assignment at the time, but I had no desire to be a full-time political operative.

I tried to turn the President down in a lighthearted way. “Mr. President,” I said with a laugh, “I'm pretty sure you're going to run your campaign, and to the extent you don't have the time, John Mitchell will run it, and to the extent he doesn't, Bob Haldeman will. So you certainly don't need me at that post. The organ-grinders will all be in the White House.” I didn't have any desire to be the trained monkey.

Nixon smiled. “Well, let's think about it some more,” he said. For whatever reason, that idea too was dropped.

Later the President raised the idea of my becoming chair of the Republican National Committee. I felt once again that it would be Nixon, Mitchell, and Haldeman who would be calling the shots, and that whoever was at the RNC would be little more than an adornment. It was not the job for me.

I was well aware that repeatedly saying no to a president posed risks, risks that increased each time I did it. My pattern of turning down job offers did not seem to please Haldeman or Ehrlichman. I'm sure they began to think that I wasn't a team player. And I suspected that Nixon probably was beginning to feel the same way.

As the 1972 election drew closer and politics took over, the group in the White House that Joyce and I were close to, the academics and policy-oriented people like Shultz and Moynihan, became less involved than they had been at the beginning of Nixon's term. The other circle—Haldeman, Ehrlichman, and later, Colson—were the ones who seemed to have his ear and confidence.

In one sense, this was a natural development. The Haldeman group was attuned to Nixon's increased focus on his reelection. We were not. But the theory put forward by some, that this group unduly influenced the President by appealing to his resentments is inconsistent with my experience. Maybe it's because I was younger and he was the president of the United States, but I seldom observed Nixon being unduly influenced by anyone. He may have had his enablers, but Nixon seemed to me to be the one in the lead.

As the campaign proceeded, I did sense a change in mood at the White House, and not for the better. At the end of one meeting I watched the President walk off with Haldeman and Colson. There was nothing particularly unusual about that, since they were frequently together. But for some reason I was increasingly uncomfortable with what was going on at the White House. Something didn't feel right.

 

B
y the early 1970s the rate of inflation, though not high by historical standards, was a growing political issue. As was typical in Washington, there was pressure on politicians to do something, if for no other reason than to demonstrate the government's concern about a problem. The Democratic majority in Congress came up with a solution that seemed politically attractive but was unwise: They passed legislation giving the president the power to impose wage and price controls on the country.

My suspicion was that Congress passed the legislation never imagining that President Nixon would actually use the power, but rather to put him on the spot politically, and to demonstrate that the Congress was doing something about inflation. The Democrats hadn't counted on John Connally, the charismatic former governor of Texas. Connally was well-known for having been hit by one of the bullets fired at President Kennedy by Lee Harvey Oswald. A Democrat who switched to the Republican Party in 1973, he was a prominent, if not dominant, figure in the Nixon cabinet. Nobody seemed to have the effect on Nixon that Connally did. Indeed, the President appeared to hang on his every word.

Connally, a protégé of LBJ's, liked big, bold action. When wage and price control legislation first came up, Connally's staff at Treasury drafted a memo urging the President to veto it on philosophical grounds. “Why are we doing this?” Connally demanded, when he saw their memo. “If a legislature wants to give you a new power—you take it. Put it in the corner, like an old shotgun. You never know when you might need it.”
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Six months later, to almost everyone's amazement—and certainly to mine—Connally had successfully persuaded Nixon to grab that old shotgun and pull the trigger. The dollar was weak, inflation seemed to be getting worse, and Connally recommended presidential action.

In August 1971, the President held a confidential meeting with his economic team at Camp David. Nixon had long blamed an economic downturn for his narrow loss to Kennedy in 1960. Now that he was president, he was determined to not have the economy ruin his chances for reelection. At the meeting, the President agreed to the approach recommended by Connally.

Nixon demanded absolute secrecy about his decision until he was ready to unveil it. In the first phase of the program, Nixon planned to announce a ninety-day freeze on wages and prices in the United States. He also would sign an executive order to create an economic stabilization program, a pay board, a price commission, a health advisory board, a rent-control board, and various other new government entities.
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All of them would be overseen by the Cost of Living Council, to be chaired by Secretary of the Treasury Connally, which would include most of the non–national security members of the President's cabinet.
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In my view, imposing wage and price controls may have been politically expedient, but it was probably the worst policy decision the administration made. I thought the proposal would subvert the free market's ability to allow consumers and producers across the United States to determine prices based on the laws of supply and demand. This couldn't be done by any centralized planning or planner, no matter how brilliant.
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The President needed a director for the Cost of Living Council (CLC) to administer what was called “Phase Two” of the program. Nixon, with the advice of Shultz, decided I was the man for the job. I'd told him I wanted to be involved in policy, and this was clearly a policy position. It just happened to be one I did not agree with. George Shultz, who had moved from being Secretary of Labor to director of the Office of Management and Budget, informed me of the President's decision. He urged me to accept the post.

“I don't believe in wage and price controls,” I told him.

“I know,” he said. “That's why you need to do the job.”

Shultz told me he wanted a director of the program who would work to make sure the new controls were temporary and did as little damage as possible.
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So for the second time in the Nixon administration, I agreed to take on a presidential assignment that seemed like a no-win position, and which ran counter to my beliefs.
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If the goal was to end wage and price controls as soon as possible, I saw a first step in that direction: the need to ensure that we did not hire a permanent staff that would want to perpetuate itself. Instead, I borrowed individuals from other departments and agencies—called detailees—particularly individuals who understood the dangers of wage-price controls, and who could be sent back to their home departments with the stroke of my pen.

Second, I emphasized from the outset that Congress passed the Economic Stabilization Act for the sole purpose of dealing with inflation. Not only did I believe that such an intrusion by the federal government would undermine the free market system, I feared that it presented government officials with the almost irresistible temptation to use that power for political ends.
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Some wanted the controls to be used to break labor unions. Others wanted them to be used to strengthen unions. I ruled out all of those ideas immediately. Furthermore, I insisted that we would not use these new statutory powers to favor or punish any given constituency for political gain.

We established a tiered system based on the size of the companies to be regulated. We freed smaller companies from the controls, placed only modest reporting requirements on medium-sized companies, and focused on the larger companies that could better handle the burdens. They had the resources of large law, accounting, and lobbying firms to effectively deal with the federal government.

Our nonpolitical, nonpartisan approach to the work of the cost of living program did not sit well with everyone. The different interpretations of how the powers of the CLC should be used led to some difficult encounters. Joyce could often tell who was on the other end of the phone based on how much colorful language I used. When Ehrlichman called, he would rail against the decisions of various entities that made up the Economic Stabilization Program. I had to explain repeatedly that once the President gave them the powers to make decisions, we had little choice but to live with them.
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From the outset, I was deeply concerned that the CLC would be tarnished with allegations of political favoritism and corruption. As a result, we spent a great deal of effort trying to make sure that that did not happen. During the time that I was director of the Cost of Living Council, to my knowledge there was only one accusation that a staff member might have a conflict of interest. When I heard about it, I sent it straight to the Justice Department, where it was promptly found to be groundless. In a presidential election year—especially in the Nixon administration that particular election year—I considered it an amazing, indeed an almost unbelievable, accomplishment that there was not one instance of wrongdoing. Public officials generally don't get credit or awards for avoiding potholes, but our group at CLC deserved an award for the many bad things that did not happen on our watch.