Cases in American Political Leadership: Nixon: The World and Richard Nixon

FOR TUESDAY, SCHOEN, CH. 3-5

CLASS PRESENTATIONS BEGIN NEXT THURSDAY

Revisiting Economics

The "New Economic Policy" and Bretton Woods

See above: inflation was not really bad in 1971. Wage-Price Controls (Schoen 45-47): A Rare Admission of Error

What did America reap from its brief fling with economic controls? The August 15, 1971 decision to impose them was politically necessary and immensely popular in the short run. But in the long run I believe that it was wrong. The piper must always be paid, and there was an unquestionably high price for tampering with the orthodox economic mechanisms.

It also turned one mid-level aide sharply to the right:

It's a part of my attitude towards governments involved in the economy, [one that] goes back to having been involved in wage/price controls during the Nixon years. I was the assistant director of the Cost of Living Council, supervising 3,000 agents trying to enforce wage/price controls. I always remember a debate we had. This was in 1972 during the reelection campaign, the Nixon administration, when the public was convinced that food prices were going up, so the political debate was whether or not we should re-impose a freeze on food prices. But in reality, if you looked at the consumer price index, the food component, it hadn't budged in six months. There had been absolutely no increase in food prices whatsoever. But we had a meeting in the Cabinet room where we argued about whether or not we should put controls back on food prices. And at one point President Nixon spoke up and quoted... "Sometimes in order to be a statesman you have to be a politician for a while. And when the people see an imaginary river out there, the politician doesn't say, 'There's no river there'; he builds an imaginary bridge over the imaginary river. Therefore we ought to control food prices." That struck me. It captured a lot of the dangers, even though best intentions can get you in trouble with respect to too much government involvement in the community.... But especially it's dangerous when you get to the point where you're working off misperceptions and trying to build a government policy that's not based on fact and on reality and on truth, but rather on the myth that somehow there's an imaginary river there. You don't say to the public, "There's no river there"; you say, "Okay, we'll put an imaginary bridge over your imaginary river.

Third World Politics

Chile: CIA material and National Security Archive

1977 Frost/Nixon:

A. Based on the C.I.A.'s record of accuracy in their reports, I would take all of that with a grain of a salt. They didn't even predict that he was going to win this time. They didn't predict what was going to happen in Cambodia. They didn't predict there was going to be the Yom Kippur War. As far as the C.I.A. was concerned, at that point, and now I understand it is being improved, and I trust it will be under the new leadership, at that point its intelligence estimates were not very good on Latin America. I also go back to the point that in terms of what we really have here in Chile. I remember months before Allende came to power in 1970. An Italian businessman came to call on me in the Oval Office and he said, “If Allende should win the election in Chile, and then you have Castro in Cuba, what you will in effect have in Latin America is a red sandwich, and eventually it will all be red.”

Q. But that's madness of him to say that.

The Shah