My eyes opened wide as Bob and I, along with my two CEA colleagues and their spouses, walked into the elegant dining room tucked away in the northwest corner of the main floor of the White House and stood waiting to be joined for breakfast by the president and Mrs. Nixon. The state rooms of the White House were old hat to me by now, but I had never before been inside the Family Dining Room, which was off limits to the public. With its silk draperies, crystal chandelier, Louis XVI green marble mantelpiece, and polished period furniture, the room looked far too formal for ordinary family meals (the Nixons generally ate in a smaller, more informal room in the second-floor family quarters) and was in fact used by the president for working lunches and small dinners.
The ostensible reason for the president's invitation was to bid farewell to Ezra Solomon, who was about to leave the CEA to return to Stanford. We all assumed that this would be a rather perfunctory affair and had mentally penciled it into our schedules for about forty-five minutes. Instead, we sat glued to our chairs for a full two hours; only Mrs. Nixon left earlier to keep another appointment. After some social pleasantries—it was Mrs. Nixon's birthday, and Bob and I presented her with the birthday cards our children had made for her, decorated with shamrocks in honor of St. Patrick's Day—the president asked the members of the council for their views on what steps the administration should take on the wage-price control program in view of the rapid increases in food prices that were occurring in the early months of 1973.
He quickly discovered the truth of the old adage “Ask a question of three economists, even three Republican economists, and you'll get three different answers.” Ezra favored another across-the-board freeze on wages and prices until at least the end of the year. Herb argued strongly that we should hold with Phase III. I was even more emphatic, insisting that there were serious dangers in a return to a freeze or similarly rigid controls program, which could cut off expansion and increase the chances of recession in 1974.1
Having exhausted that topic, the president embarked on one of the most remarkable monologues I have ever heard. For the better part of an hour, he expounded on the intricacies of global geopolitics, the position of the United States as the world's power balancer and peacekeeper, and the part his vision and policies would play in leading our country to fulfill that role. The brilliance and subtlety of his wide-ranging disquisition was as breathtaking as the arrogance that underpinned it. As the six of us listened spellbound, Nixon broke off and, switching gears, turned suddenly to my husband, the professor of English literature. “But as a teacher who deals with students, Professor Whitman,” he said, “you must know that you can't tell the American people the truth about what you're doing or they won't support you. You have to give them stories that will make them feel positive about what you're doing.”
There, right in front of our eyes, Dr. Jekyll turned into Mr. Hyde; the brilliant master of geopolitics became the secretive, suspicious, paranoid Richard Nixon we came to know during the Watergate hearings and who ultimately brought about his own downfall and disgrace. Then the spell was broken, and the breakfast ended with the same sort of small talk with which it had begun.
The earthquake that ultimately buried the Nixon presidency had begun a year earlier, deep underground, with an apparently obscure burglary. At 2:30 in the morning of June 17, 1972, five men were arrested for breaking into and attempting to bug the offices of the Democratic National Committee (DNC) at the Watergate, a hotel and office complex a mile or so from the White House. Two days later the Washington Post reported that one of the five was in charge of security for the Committee to Re-elect the President (CRP, but often referred to, sarcastically, as CREEP). On that same day, John Mitchell, formerly President Nixon's attorney general, resigned as head of the CRP while denying any connection to the foiled effort of the so-called Watergate burglars.
I had followed these developments on the front pages of the Post, but, preoccupied with the challenges of the renewed price freeze and the pressures the members of the Volcker Group were feeling to come up with a proposal for international monetary reform, with giving speeches in New York and holding a press briefing on the Consumer Price Index in Washington, I paid them little attention—maybe I didn't want to think about the possible implications. In the months that followed, the Post reported that a check for twenty-five thousand dollars apparently intended for the Nixon campaign had turned up in the bank account of one of the Watergate burglars, that John Mitchell had controlled a secret fund used to finance widespread intelligence-gathering operations against the Democrats while serving as attorney general, and that the FBI had identified the Watergate break-in as part of a massive campaign of political spying and sabotage associated with the Nixon reelection campaign.
Although, in hindsight, the pattern of malfeasance these developments pointed to seems painfully clear, at the time the possibility that they might affect my relationship with the president and my role in his administration didn't occur to me. When a journalist confronted me, much later, asking “Weren't you in denial?” I had to say that I honestly didn't know. Doesn't denial mean pushing something down from the conscious part of the brain to the subconscious? Apparently the American public didn't focus on those front page stories any more than I did; in November 1972, Richard Nixon was reelected with more than 60 percent of the vote, one of the largest landslides in American political history.
I felt the first vague, queasy pangs of discomfort sometime early in 1973. I was listening to John Ehrlichman, one of the president's two most senior aides, briefing newly elected Republican members of Congress. Among other things, these rookies asked for advice on how to respond to the awkward questions they were beginning to be asked about Watergate and some of the people around the president. The gist of Ehrlichman's answer was, “If you're asked, for example, about what Dwight Chapin (the president's appointments secretary) was doing during the early months of 1972, explain that he was very busy making preparations for the president's pathbreaking trip to China.”
This seemed to me like a weaselly answer, but none of the new legislators pursued it further. There were other comments of Ehrlichman's that sounded less than forthright, but I couldn't put my finger on anything specifically wrong. A year or so later I talked with Don Rumsfeld, who had become the US ambassador to NATO, about that Ehrlichman briefing, which both of us had attended. When I mentioned that it had made me vaguely uncomfortable, Don replied, “I had exactly the same reaction.” A few months after that briefing, Rumsfeld had been given the NATO appointment, which took him and his family to Brussels, far away from Washington and its swirling rumors.
Circumstantial evidence linking people close to the president to the Watergate break-in kept cropping up during the first few months of 1973. At the end of January, two former White House aides, G. Gordon Liddy and James McCord, were among the seven who pled guilty and were convicted of conspiracy, burglary, and wiretapping. All seven, it turned out, were directly or indirectly employees of the CRP.
Although rumors abounded, and the Washington Post and New York Times continued to shine a spotlight on the mysteries surrounding the Watergate break-in, all of those involved, with the exception of Mitchell, appeared to be fairly low-level operatives, involved with the campaign committee rather than with the administration itself. The discomfiture created by the Ehrlichman briefing had retreated to the back of my mind when another attack on my comfort level as a member of the Nixon administration came, not from rumors or press stories but from the president himself, at the breakfast in the Family Dining Room.
By that time, investigative stories on the Watergate break-in, written by the team of Bob Woodward and Carl Bernstein, had been appearing with increasing frequency in the Washington Post for several months. Gradually, through news and television photos, I began to recognize some of the handsome young faces I'd never been able to attach names to when we had lunch at the round “singles” table in the White House Mess: John Dean, Egil (Bud) Krogh, Jeb Stuart Magruder, Dwight Chapin. All had been high-level assistants or counsels to the president when we ate together, although by early 1973 Krogh had become undersecretary of transportation and Magruder had long since moved to the CRP as John Mitchell's deputy in the 1972 presidential campaign.
As the inexorable drumbeat of evidence linking the White House to the CRP, and through it to the Watergate break-in, grew louder, it began to penetrate my resistant brain. One night in April, I sat bolt upright in bed and woke my husband, saying, “But what if the Washington Post is right?” “Well,” he replied sleepily, “if you really are having such treasonous thoughts, there's nothing for it but to resign.” With that, he returned to his interrupted dream, but I didn't get much sleep that night.
At about the same time, my secretary took a call from the office of H. R. Haldeman, Nixon's chief of staff and one of the two men—the other being John Ehrlichman—closest to the president. The call was to scold me for a minor infraction of the rules: I had used a White House car and driver, which I was authorized to do only on work-related trips, to drive me some five blocks from the beauty shop to my office in the midst of a downpour—proving, once again, that “vanity, thy name is woman.” When the message was relayed to me, I grumbled to myself, “He's a fine one to talk; he's going to be in jail one of these days.”
On April 30, the president astounded the nation, or at least the world inside the Beltway, by announcing that he had reluctantly accepted the resignations of Haldeman and Ehrlichman and had fired John Dean, the counsel to the president who, we learned later, had talked to the president about “the cancer on the presidency” only a few days after the CEA members and their spouses had breakfasted with the Nixons.
The fact that the two men closest to the president were clearly implicated in the scandal finally did it; I just couldn't believe any longer that the president could have remained ignorant of what was going on. Developments during the weeks that followed made clear that many members of Congress had reached the same conclusion. A Senate Watergate Committee was formed, former solicitor general Archibald Cox was appointed by Attorney General Elliot Richardson as the Justice Department's special prosecutor, and the Senate committee began nationally televised hearings on May 18.
It was then that the country began to learn the concrete details of Richard Nixon's dark side. Bud Krogh, who had resigned his position as undersecretary of transportation a few days earlier, revealed his previous role as head of the White House “plumbers' unit.” This was the group that, after White House efforts to stop publication of the top-secret Pentagon Papers through the courts failed in 1971, had broken into the office of the author's psychiatrist, looking for material that might discredit him. John Dean told investigators, according to the Post, that he had discussed the Watergate cover-up with the president “at least 35 times.”2 In an allegation that has never been confirmed, Jeb Stuart Magruder stated that the president had known of and authorized the Watergate break-in in advance. All of these men, along with Haldeman, Ehrlichman, and many others, eventually were convicted and served jail time for their roles in the two break-ins and/or the cover-ups that followed.
As I listened to or read about these admissions, I asked myself what on earth could have motivated men like these—all of them highly intelligent, all on brilliant career trajectories, and many of them lawyers themselves—to engage in what they must have known were illegal activities. What were they thinking? Was it personal loyalty to the president? Had the president's own arrogance, his apparent belief that he was above the law and would never be caught, spread over those close to him as well? Did they believe that the “end,” so brilliantly articulated by their leader, justified the means? Were they so dazzled by the power and perquisites of their White House jobs that they couldn't stand the thought of having them cut short by scandal, leading them to create the much greater scandal of the cover-up?
Personal ambition didn't surprise or offend me. My father had described himself in a letter to me as “an ambitious bastard,” and that trait had been implanted in my own genes and upbringing both. And his passion for being close to power had been crucial in shaping the last half of his career. But honesty and moral courage were just as important a part of his makeup. He displayed these traits most conspicuously in his public defense of Robert Oppenheimer when the latter was wrongly accused of disloyalty and deprived of his security clearance. This was despite the fact that my father's political patron was the wealthy investment banker Lewis Strauss, who had masterminded the proceedings against Oppenheimer and was the chairman of both the Atomic Energy Commission and the Institute for Advanced Study's Board of Trustees.
With this example before me as I was growing up, and my own efforts throughout my life to emulate my father's honesty and fair dealing, despite all the books many of the men (and they were all men) involved in Watergate wrote later, their total loss of any moral compass remains a puzzle to me. I promised myself never to forget for a minute that all the trappings that went with life in the Executive Office of the President—closeness to the seat of power, the sense of actually influencing important decisions, a broad array of special perks—were ephemeral, belonged to the job and not the individual, and were no excuse for breaking the rules of decent behavior.
The most astounding revelation to emerge from the Watergate hearings was the July 13 statement to the committee by Alexander Butterfield, a former presidential appointments secretary. Under oath, Butterfield testified that the president had ordered a taping system installed in his office in 1971 and every conversation and telephone call since had been recorded. The president lost his battle to keep these tapes secret, and they provided much of the evidence that led, after a year of Chinese water torture revelations, to his resignation under the imminent threat of impeachment.
Well before Butterfield's mind-boggling revelation, sometime during the month of April, I finally decided I couldn't wait any longer to take a first step toward leaving the CEA, now that I suspected the president of being at the center of an enormous and expanding web of lies. I told Herb Stein that I was no longer comfortable as a member of the Nixon administration and intended to resign. Herb, a man of unimpeachable personal integrity but also a staunch Nixon loyalist, simply refused to believe that I was serious.
For months, I had been torn between my respect for the institution of the presidency, the enjoyment of my job, and my admiration for the administration officials who had put me there—CEA chairman Herb Stein and treasury secretary and economics czar George Shultz—and the mounting evidence of a cancer growing in the Oval Office that was destroying the credibility and dignity associated with it. Those of us who were part of George Shultz's domain, we learned later, were apparently walled off from the machinations and dirty tricks that were widespread elsewhere in the Executive Office of the President.
One of the things that came to light in the course of the Watergate investigation was the existence of an enemies' list of high-profile people the president regarded as either hostile or untrustworthy. He ordered that people on the list were under no circumstances to be invited to the White House and, more ominously, tried to persuade Treasury Secretary Shultz to turn over to the White House confidential information from the Internal Revenue Service (IRS) about their individual tax returns. When Shultz courageously stonewalled this request, the president reputedly told his aides to keep “Shultz's people,” who included the members of the CEA, in ignorance of the darker side of activities originating in the White House. If I hadn't been shielded from what was going on, I would surely have decided to quit, and translated that decision into action, more quickly.
Once I'd made up my mind to resign, I still hesitated to make the decision irrevocable by putting it in writing. This was partly because, between Ezra Solomon's return to Stanford in March and the time when his vacancy was filled in June, Herb and I were the only members of the council. My departure would have left Herb to carry out the duties of the three-member council alone, which would have been an enormous burden, particularly with the high level of activity in the two areas that were my major responsibility: the wage-price controls program and the international monetary system. Furthermore, Herb had recently suffered a hemorrhage that left him permanently blind in one eye. That he had lost half his eyesight but none of his sense of humor was demonstrated when the president called him in the hospital to commiserate with his misfortune. “That's okay, Mr. President,” Herb told us he'd replied, “half of what I see isn't worth reading anyway.”
I'd also hoped to be able to discuss with Herb the implications of my leaving for the functioning of the CEA. But once the nomination of agricultural economist Gary Seevers, then the special assistant to the chairman, to fill the vacant member's slot had been made public, and my repeated efforts to engage Herb in a serious discussion had failed, I knew the time had come to make my intentions official. On June 14, I wrote a letter of resignation to the president and left a copy on Herb's desk. Then he not only believed me but took my decision as an act of personal betrayal.
I might have had reason to feel morally superior if my letter to the president had been a bold, courageous statement along the lines of “I believe you are a crook, Mr. President, and I can't work for a crook.” In fact, though, I wrote:
Dear Mr. President:
When I was offered and accepted appointment to the Council of Economic Advisers in February of 1972, it was with the understanding that, subject to your pleasure, I would remain until the end of the 1972–73 academic year. That time has now run out, and I am writing to tender my resignation from the Council on or about August 1, 1973, in order to return to my teaching post at the University of Pittsburgh for the 1973–74 academic year.
I take this step with the greatest personal difficulty and regret, knowing it will bring to an end a most exciting and rewarding period in my life. Few economists indeed have the privilege of practicing their profession in the service of their country and their President, and to have been able to observe and participate in decisions fundamentally affecting the economic welfare of our nation is an opportunity for which I shall always be grateful. I shall leave with the knowledge that I received far more than I could give, and learned far more than I could teach, and yet with the hope that I was able to make a useful contribution. I shall leave also with the hope that this will not be my last opportunity for government service.
These are difficult times. But when history gives its appraisal of the fundamental achievements of the Nixon Administrations, which have given our children—and children everywhere—a far greater chance to live out their lives in peace, I shall be proud to have been a part of them. It has been an honor and a privilege to serve my government in the position to which you appointed me and I shall always be grateful to you, Mr. President, for having given me the opportunity to do so.
Yours sincerely,3
Marina v. N. Whitman
The first paragraph of my letter wasn't entirely true. I had never, either to the president or anyone else, set a time limit on my tenure at the CEA. I reveled in my role there and would, I'm convinced, have found a way to stay on for another year had not the unraveling Watergate saga intervened. But, given my views about the moral culpability of Nixon's sycophants, why was the tone of my letter so polite, even friendly?
The language was partly a result of my determination to make the public announcement of my resignation a nonevent, even if the letter should leak to the press, as many such documents did. But it also reflected a genuine admiration for the Dr. Jekyll side of Nixon's actions as president. I was very much in tune with the progressive aspects of his domestic policies. More important, I genuinely believed, and still do today, that he had taken some major steps forward in foreign policy. He ended our participation in the Vietnam War—though after too much time had passed and too much blood had been shed—and his overtures to China and the Soviet Union were important first moves in bringing stability to a precariously unstable world.
The expressions of admiration and gratitude that filled my letter to the president were returned in his letter accepting my resignation.
Dear Marina:
Although I had known of your intention to return eventually to the academic world, I had not realized that the time was so near. Thus, while I will accept your resignation as a Member of the Council of Economic Advisers, effective August 1, I do so with the deepest reluctance. Your work here has been a source of high satisfaction, not only to me and to your associates on the Council but, also, to all your colleagues throughout government, and you will be greatly missed.
Keynes is reputed to have said that economists have not yet earned the right to be listened to attentively. I disagree, and your distinguished service on the Council more than justifies my position! The brilliance of your contributions to our economic policies cannot be overestimated, and the unprecedented growth our Nation has enjoyed during the past two years is a great tribute to the Council and to its Members. You have every good reason to be proud of the part you played, just as I have been proud and honored to have you as a key member of our Administration team.
Needless to say, you leave public life with my heartfelt thanks and warmest good wishes for continued success in the years ahead. And on behalf of our fellow citizens, I do indeed share your hope that at some future time we may prevail upon you to return once again to government service.
Sincerely,
Richard Nixon4
The president may have been distracted by Watergate, but his gracious letter gave no hint of it. In contrast to the nefarious actions against personal and political adversaries that were being conducted in secret, the civility that characterized verbal and written exchanges in official Washington, even among people on opposite sides of the political aisle, seems unimaginable today, when shrill partisanship and universal mistrust dominate public discourse. Ironically, Watergate itself did a lot to create this poisonous atmosphere.
Only once, in the many times I testified before one congressional committee or another, did a member of the committee address me with anything other than the utmost politeness. That was when Herb and I were scheduled to testify before the Joint Economic Committee (JEC) on the Economic Problems of Women. At the last minute, Herb was called to the White House to talk to the president, and I was left to face an angry Martha Griffiths, a Democrat from Michigan, who was presiding. Representative Griffiths was annoyed partly because Herb had chosen to respond to the president's summons rather than hers and partly because she objected to the fact that our testimony, in the form of chapter 4 of the 1973 Economic Report of the President on the Economic Role of Women, was descriptive rather than prescriptive and failed to recommend specific policies to alleviate discrimination against women in the workplace. Venting her spleen on the council member who sat before her, she said bluntly that I was in no way an adequate substitute for the chairman of the CEA. I knew better than to take her remarks personally, but they still stung.
More typical was the behavior of the chairman of the JEC, Senator William Proxmire, Democrat of Wisconsin. Even when he was castigating the administration for the performance of the US economy, he was careful to point out his respect for the reputations and expertise of the individual members of the CEA. But the acme of graciousness was reached during my last appearance before the JEC on August 1, 1973, shortly before my resignation from the CEA became effective. Another Democrat, Representative Henry Reuss, took note of my imminent departure.
I…say farewell to Mrs. Whitman, who is leaving for the university in a few days, I understand. You will remain forever green in my mind for the great job you did in helping close the gold window on August 15, 1971; a good piece of work. You are Mrs. Phase II as far as I am concerned.
That was one time when controls were well administered, so may the angels sing when you go back. We really appreciated you and your work so much.5
Senator Jacob Javits added, “To which we all say amen.”6 And the courtly Senator John Sparkman of Alabama chimed in: “May the angels sing while we are weeping.”7 Senator Proxmire ended this remarkable exchange by noting wryly, “We may not have economists on this committee, but we have poets.”8
I accepted these plaudits with a gracious smile, but inwardly I felt they were not entirely deserved. The relative success of Phase II had owed more to the amount of slack that existed in the US economy at the time than to the brilliance of our execution. As the country moved back toward full employment, Phases III and IV were progressively less effective and the program gradually faded away, ending entirely in mid-1974 without having made a dent in the long-term trend of price increases. I could take solace in the fact that my original skepticism about controls had been justified, and that my CEA colleagues and I had done our best to minimize the harm they did to the American economy. But I couldn't escape the reality that for nearly two years I had been the public face of a failed program.
The push for trade liberalization and changes in the international monetary system that I had worked so hard for at the CEA, on the other hand, were both important and essential, underpinning twenty-five years of healthy growth in international trade and investment. The so-called Tokyo Round of multilateral trade negotiations, which the administration was preparing for when I left the CEA, ended six years later, having spawned significant tariff reductions and new regulations restricting a variety of nontariff barriers to trade. Building on this success, the high-water mark of trade liberalization was reached in 1993, when both the Uruguay Round, the most ambitious round of multilateral trade negotiations to date, and the North American Free Trade Agreement (NAFTA) were completed and the World Trade Organization (WTO) was established.
At the time, the US proposals for a new international monetary architecture developed by Paul Volcker and advanced by many of us in the administration appeared doomed to failure. They were overtaken by events, and the world has been operating ever since with an ad hoc mixture of pegged, freely floating, and managed floating exchange rates, very different from the orderly system we had tried to bring into being. But the two main ideas of the Volcker Group proposal rose from the dead in September of 2009, becoming the focus of intensive discussion at a meeting of the leaders of the Group of 20, the leading industrialized and developing countries. One was the need for countries with the biggest surpluses, as well as those with the largest deficits in their payments balances, to adopt policies that would reduce the imbalances on both sides. The other was the desirability of gradually reducing the dominance of the US dollar as the primary currency in surplus countries' international reserves, by increasing the acceptability of other assets in this role.9 There has been little progress so far on implementing these proposals, but the need to move forward on them is widely recognized.
Balancing my successes and my failures, I left the CEA feeling that I had used my economic expertise as best I could to promote policy choices that would enhance the nation's economic welfare. Once again, I wished that my father could know not simply that I had become a professional success but that, like him, I had to the best of my ability put my mind and my training to use in helping shape our nation's policies, and that my contributions had been recognized in a glowing letter from the president himself. The goals John von Neumann and I supported—the military might of the United States in his case and the effectiveness of the country's economic policies in mine—were controversial, attracting both admiration and criticism. But his commitment to American leadership in global affairs, combined with the ambition to be personally involved, had both been passed on to his only child.
A more direct link with my father's past came from a totally unexpected source. A month after I had left the CEA, the president announced the appointment of my successor, William Fellner, recently retired from the Sterling Professorship of Economics at Yale. According to The Economist, “Mr. Fellner…would not claim to be as pretty or as young (he is 68) as Mrs. Marina Whitman, who has gone back to the University of Pittsburgh and whose place he takes. But he is an academic economist of such distinction…[that] [o]bservers of the Council, who have feared that it was becoming too involved in the political hurly-burly welcome Mr. Fellner's willingness to serve.”10
The same article noted, “Mr. Fellner, who was born in Hungary, has a belief in free markets which accords with President Nixon's philosophy, if not his practice.” What it did not mention, and was doubtless unaware of, was that Willi Fellner had been a close friend of my father's during their high-school days in Budapest, a friendship that ended only with my father's death. That my father's lifelong friend should become his daughter's successor at the CEA gave me, once again, a strong sense of continuity with my family's history.
The angel voices that Senator Sparkman had heard so clearly on my departure from the CEA were muted by the time I returned to Pittsburgh. “Sure enough, there behind the dirty windows of room 416 sits the only woman ever to have served on the President's Council of Economic Advisers,”11 wrote a surprised reporter shortly after I had traded in the spacious elegance of my EOB office for my cramped, dingy academic quarters back in Pittsburgh. Some things had changed, though: I now had a fancy title and higher salary, and the Whitmans had a new house, the old one having been so trashed by tenants that I said to Bob, “It'll be easier to sell it than to clean it up.”
Above all, the high visibility I had acquired in Washington followed me home. I was in constant demand for interviews and speeches and became the poster girl for a New York Times article on a new phenomenon: husbands who were willing to become “trailing spouses,” moving temporarily or permanently away from their own jobs in the interest of their wives' careers.12 But old customs weren't quite keeping up with the realities of change. When the Pittsburgh Jaycees chose me as one of their fifteen outstanding citizens for 1976, I was hailed as “Man of the Year” in the finance category.13
While I was settling into my new role as a local celebrity, the slow torture of Watergate's unraveling was eclipsing everything else that was going on in Washington and the country. Along with millions of my fellow citizens, I followed the drama day by day, on television and in the press: the windup of the televised Senate hearings; the appointment of a special prosecutor for Watergate, Archibald Cox; and his refusal to obey the president's order, which cited executive privilege, to drop the subpoena for the Watergate tapes. Cox's refusal was followed by the “Saturday Night Massacre,” when Nixon forced Attorney General Elliot Richardson and his deputy, William Ruckelshaus, to resign because they refused to fire Cox. After Cox was finally dismissed by Solicitor General Robert Bork, demands for the president's impeachment became widespread, and he felt compelled to declare publicly, “I am not a crook.” A new special prosecutor, Leon Jaworski, was appointed, and the struggle to obtain the tapes continued.
Meanwhile, seven individuals, including the president's highest-ranking aides, had been indicted by a grand jury that secretly named Nixon as an unindicted coconspirator. Finally, on July 24, 1974, the Supreme Court unanimously ordered the president to hand over the tapes to Jaworski; he complied a few days later. Back in Pittsburgh, I thanked heaven that I was there and not still at the center of the maelstrom.
By the time Richard Nixon, under imminent threat of impeachment by the House and removal from office by the Senate, announced his resignation on August 8, the four Whitmans were on a family vacation in Europe. My mother, who had been appalled that we would go abroad when our own country was in such a state of turmoil, nevertheless put us in touch with a courtly, Old World, Viennese friend from her youth. As he was showing us around his enchanting city, he expressed considerable puzzlement at the Nixon resignation. Why, he asked, hadn't the president simply called out the National Guard and thrown the legislators in jail?
I despaired of explaining the workings of the American democratic process to a monarchist who longed for the restoration of the Austro-Hungarian Empire. His view of the world, I realized, like that of my parents, had been formed by the turbulence that Europe had endured during and between two world wars. Their response had been a wholehearted embrace of the United States and its form of government, whereas he saw a return to monarchy as the best path to peace and order. I tried to persuade him that the very orderliness of the transition from Nixon to Gerald Ford had shown democracy at its best.
From Vienna, we braved the Iron Curtain to get to Budapest, so we could introduce our children to the birthplace of their maternal grandparents. Even though it was blanketed with the grayness of Soviet communism, Budapest was a beautiful city, and the Hungarians we met were impressively entrepreneurial; the ladies managed to afford their Chanel knockoff suits by working two or three jobs. Again, I wondered how my father, the anticommunist superhawk, would have reacted to what his birthplace had become. Would he have nodded with grim recognition at the restricted existence he had predicted would befall those who came under communist rule? Or would he have been heartened that, as he once put it, the Hungarian ability to go through a revolving door behind you but come out first had managed to survive?
While I was in Budapest, I learned that the new president, Gerald Ford, had chosen Nelson Rockefeller as his vice president. I had gotten to know Rockefeller the previous November when, as governor of New York and at the president's request, he had established a National Commission on Critical Choices for Americans and appointed me as one of its members. Assigned to the panel on Energy and Its Relationship to Ecology, Economics, and World Stability, I had found myself in continuous disagreement with Edward Teller, another of my father's childhood friends and famous, or infamous, as the father of the hydrogen bomb. Teller had argued strongly for making nuclear energy the focus of a national energy program; I had held out just as strongly against putting all our eggs in that particular basket. In the end, it made no difference; the commission's work was halted in midstream when its founder became vice president, and its conclusions were relegated to oblivion, as so often happens, by the changing of the guard in Washington.
With the departure of President Nixon and the inauguration of President Ford, the Watergate drama appeared to have come to a close. But of course it hadn't. Gerald Ford's pardon of Richard Nixon was widely believed to have cost him election to a full term in 1976, Nixon spent the rest of his life trying to rehabilitate himself as an elder statesman, and the men who went to jail for their roles in the Watergate burglary or its cover-up had their lives forever changed. And a hardening of the lines that began with Watergate, in the attitudes of the public toward government, of members of the three branches of government toward each other, and of decision makers on one side of the political aisle toward those on the opposite side, still shapes the policy-making environment, more brutally today than ever before.
For me personally, the denouement came nearly twenty years later. The two rookie investigative reporters who blew the Watergate cover-up wide open, Carl Bernstein and Bob Woodward, reported to the young deputy metropolitan editor of the Washington Post (the Post initially treated Watergate as a local rather than a national story), whose job it was to try to make sure that their reports were accurate. By 1992 that young editor, Leonard Downie, had become the executive editor of the Post and, of much greater importance to Bob and me, the father of the groom at our daughter's wedding. Laura Whitman and David Downie had met as undergraduates at Duke University and, totally unaware of this history, fell in love and married. The result is that we share with Len Downie two absolutely perfect grandchildren.
The change in my own status carried no such drama. It did give me, though, a very different perspective on my professional role; I could now talk about the Nixon administration's economic policies without the constraints on expressing doubts or disagreements imposed by being a member of that team. I believe firmly that you can be an inside adviser or an outside critic, but you can't be both at the same time. This truth is hard for academics to accept, especially in light of the special license that society has given us to speak out freely on any subject without being concerned about the impact on the institution of which we are a part. But academic freedom is only for academics. I had seen several of my colleagues, people of great intelligence and personal integrity, ignore this trade-off when they went into business or government and then be surprised when their internal effectiveness was drastically undermined—generally to the point that they either quit or were fired.
My thoughts along these lines made me recognize a contradiction inherent in the very existence of the CEA, a hard truth that had lain buried under the frenzy of day-to-day activity. It was spelled out in a comment by Professor Carl Christ, one of several well-known economists who had written critical reviews of the CEA's 1973 Economic Report of the President in the American Economic Review: “[T]he report is inherently ‘a somewhat schizoid document.’ It is intended to serve two purposes that are not entirely compatible—first to function as an apology for or celebration of the President's economic program, and second, to constitute a professional job of economic analysis and policy recommendation.”14 Every CEA, both before and since the one I served on, has been confronted with this dilemma without fully resolving it. And I wasn't the only member of that body, I'm sure, who felt twinges of discomfort when the two purposes came into conflict with each other.
Now that I was an outsider, I was filled with a missionary's zeal to explain to as many people as possible the realities of economic policy making as I had come to know them in the trenches. I pushed my audiences to understand the complexities of these issues, and to think about them from the perspective of the nation's long-run economic welfare, rather than focusing only on particular interests and immediate effects. I also used these speaking and writing opportunities as a way of forcing myself to reflect on what contributions I had made to the formation of good economic policy, and what I had learned from the experience.
I had taken away a hard-won realism about economic policies and those who formulate them, lessons I boiled down to three points. One was that you don't bring about enormous changes in policy. If you move things two degrees in one direction or another, that's a pretty big accomplishment. Also, in a job like mine, where your only output is advice and analysis, when a decision goes your way you can never be sure how heavily your input was weighted. And, finally, you discover that a lot of your achievements are negative. You go home at night feeling really great that you prevented something bad from happening.15 The young girl who had dreamed of changing the world had become a woman who recognized both the opportunities and the limitations of the profession she had chosen.
Underpinning this modest assessment was my core belief about how decisions are made in a democracy: there is no such thing as a free lunch, and there are no easy answers to hard questions. And, in a society striving to achieve multiple and often mutually contradictory targets, the role of the economist is to spell out the choices available and the nature of the trade-offs, leaving it to the political process to select among them and determine what the ultimate compromise is to be.16
One offshoot of my high visibility at the CEA was that I began to be offered honorary degrees by colleges and universities, eventually becoming an honoree at more than twenty commencement ceremonies. These events held a special significance for me. Never having anticipated this sort of recognition, I wore with pride my father's plain, black, moth-eaten wool academic robe, until Bob gave me for my birthday the more colorful, less sweltering, sky-blue gown that identified my Columbia PhD. But, whatever the color of the gown, each of these occasions brought back memories of the many times my father had worn the one I had inherited from him at some of the world's most prestigious universities on several continents. When I was asked to give the commencement address, along with receiving an honorary degree, I tried especially hard to make the messages that I delivered, along with the fact that I was being so honored, worthy of his approval—an approbation I craved even long after he was dead.
The opportunity to air economic issues before an audience larger than I'd ever dreamed of came in 1978, some five years after I left the CEA, when I was invited to host a series of hour-long television programs to be distributed through the Public Broadcasting Service (PBS) network. My first reaction was one of open-mouthed astonishment: “you're asking me to become a TV personality?” I replied in disbelief. Despite the incongruity of the idea, I was instantly enthusiastic about the challenge of making economics more accessible and less intimidating to the general public or, as Bob teased me, “Wonder Woman wants to bring enlightenment to the ignorant masses and convince them that they can enjoy the process.” Once again, my youthful enthusiasm for new experiences, along with a heavy dose of naïveté about what it took to be a successful TV host, led me to say yes.
I'd expected that the hardest part of getting the show together would be choosing topics that would appeal to a PBS audience and persuading high-profile experts to come on as guests. On the contrary, our biggest obstacle turned out to be snowstorms. Bob Chitester, the entrepreneurial president/manager of WQLN in Erie, Pennsylvania, had insisted that the show's pilot be made at his station. On the day scheduled for the taping, a blizzard shut down the Erie airport, and our producer couldn't find a limousine—he even tried funeral homes—willing to drive us there. In the end, Pittsburgh Yellow Cab came to the rescue, and our new program's first guest, the president of the United Steelworkers Union, shared with me a three-plus-hour ride from Pittsburgh to Erie, being tossed about in the backseat while an old taxi with busted springs negotiated slippery, snow-covered roads.
I had a strong sense of déjà vu when, on the day Ralph Nader was to tape a program with me in Washington, much of the East Coast was shut down by a massive blizzard. I managed to fly to New York from a meeting in Bermuda, but getting from there to Washington was no mean feat. It involved a postmidnight ride on a deserted New York subway, lugging a heavy suitcase, three consecutive shifts from one unheated railroad train to another, and a ride hitched on a snowplow before I reached the Washington television studio, exhausted and bedraggled, but triumphant. The staff and production crew managed to trickle in as well, but Nader, who lived a few blocks from the studio and prided himself on not having a telephone, was a no-show. When we finally made contact several days later, he said breezily, “Oh, the weather was so terrible, I figured no one would show up.”
Despite human and logistical problems, we covered a vast array of economic topics over the twenty-six weeks that Economically Speaking was on the air. The format, a panel show with a host and two guests, one on each side of a current economic controversy, was a natural framework for my conviction that there are no simple answers to complicated questions. My guests aired opposing views on issues that included the declining dollar, agricultural subsidies, airline deregulation, the future of American unionism, the breakup of the AT&T monopoly, affirmative action (where the negative side was argued by a conservative African American economist, Walter Williams), and the financing of health care. Many of those programs could be rerun today with little change; in some cases, even the participants might be the same.
For the finale of the series, we staged an hour-long airing of the running debate on “Why Economists Disagree” with the icons of the two leading schools of economics in the country at the time, Walter Heller and Milton Friedman. Heller, the nation's leading proponent of Keynesianism, had been chairman of the CEA under President Kennedy and the top economic adviser to both Kennedy and his successor, Lyndon Johnson, whom he persuaded to undertake the War on Poverty. Friedman, who refused ever to accept a position in government, was the country's best-known proponent of free-market economics.
Friedman got the discussion off to a rousing start by declaring that the major basis for disagreement among economists was not a matter of Keynesian versus monetarist or liberal versus conservative, but rather that his perspective focused on long-run results, while Heller's emphasized short-run outcomes. Heller strongly if politely disagreed, insisting that differences in values, or at least in priorities, underlay their opposing views of economic analysis and policies. The give-and-take between the experts and the audience that made up the second half of the program not only underscored the differences between the two leading lights of American economics but also gave audience and listeners alike a quick, intense version of Economics 101. Our experiment, we felt, had gone out with a bang. Overall, the series had fulfilled my goal of demonstrating not only that “there are two sides to every question” but also the truth of Oscar Wilde's quip, “The truth is rarely plain and never simple.”
The program's originator and its financial sponsor disagreed with me. There were several reasons why they failed to extend Economically Speaking after the original series ended, including the fact that it had not attracted a large enough audience. But they decided against giving it another chance to establish itself mainly because they felt that the program had been too neutral, too balanced, for the free-market position they both espoused to emerge a clear winner. This experience drove home a hard truth that I have encountered again and again, that people prefer to see the world in black and white, rather than in the shades of gray that I see as a true reflection of reality.
Meanwhile, I had been keeping my finger in Washington's policy pie by serving as an adviser to several offices and agencies of government on issues related to trade, the US balance of payments, and the international monetary system. We had just come home from our trip to Europe in the summer of 1974 when I was invited as one of twenty-eight “leading economists” to participate in a Summit Conference on Inflation called by President Ford to advise him on the economic conundrum that confronted his new administration.
The postwar economic mainstream in the United States had been grounded in the Keynesian belief that skillful management of monetary and fiscal policy could keep an economy in balance, growing at a healthy rate without dangerous inflation. The rules were simple: in recession, the government should reduce taxes and/or increase spending and the Federal Reserve should lower interest rates; in an inflationary boom, both fiscal and monetary policy should move in the direction of restraint. But there was no prescription for what to do about the “stagflation” that emerged in the 1970s, when excess unemployment and high or accelerating inflation occurred simultaneously.
Inflation had reached double digits when the kickoff meeting of the conference was convened in the East Room of the White House, and the misery index faced by President Ford was far more severe than the one that had provoked President Nixon into instituting wage-price controls a few years before. Explaining his insistence on a meeting open to the press and the public, the president joked, “Some skeptics have warned me that putting 28 of our most distinguished economists and eight members of Congress, both Democrat and Republican, on public display with live microphones would produce a spectacle something like professional wrestlers playing ice hockey.” But his charge was breathtakingly ambitious: “Our purpose is to find ways by which we, the American people, can come to grips with our economic difficulties and surmount them.”17
The emergence of stagflation had laid to rest the Keyensian belief in demand management as a macroeconomic shortcut to nirvana, and the resort to controls had, if anything, made the situation worse. That meant that the hunt for solutions now had to focus on microeconomic or structural changes, supply-side measures that would enhance efficiency and lower costs in the US economy. Both the conference participants themselves and the reporters who wrote about the session were pleasantly surprised by the degree of unanimity among economists across the political spectrum and optimistic that a good start had been made on attacking inflation. And many shared the concern I had often expressed for avoiding a battle over income shares among business, labor, and other groups in the economy.18
At a follow-up meeting on September 23, we economists tried to convert the suggestions for structural change we had offered at our earlier meeting into specific proposals to slaughter a variety of political “sacred cows,” primarily regulatory restrictions on competition. The aim was to tame inflation by reducing costs and increasing the availability of goods.19 During the weeks that followed, the administration held meetings with different interest groups in cities around the country. As reports of the outcomes of these meetings emerged, some of the optimism about the president's anti-inflation initiative began to evaporate. Each group explained why the economy would benefit if price increases (or, for labor, wage increases) were limited in every sector except its own. As one reporter noted wryly, “Interest groups, representing various sectors of the economy, have said not what they would do for their country, but instead what their country should do for them.”20
By the time of the final summit conference, where each of these groups summarized its self-interested position in a circuslike atmosphere, complete with cheering, waving signs, and balloons, disillusionment was setting in. And once the Congress, yielding to interest group pressures, had finished consigning most of the president's structural proposals to the scrap heap, little was left of the highly touted effort other than the large red, white, and blue WIN (Whip Inflation Now) buttons that every participant received.
Two years later, with stagflation's misery index still in unacceptable double digits, it was the turn of Jimmy Carter, who had just been nominated as the Democrats' presidential candidate, to invite groups of economists to his home in Plains, Georgia, to give a series of seminars on economic policy with a student body of one. As the token Republican in the group, I joined “a distinguished bipartisan group of experts on international economic policy.”21 In his remarks to the press, Governor Carter found plenty to criticize in the design and implementation of economic policies during the Nixon and Ford administrations. But he agreed with them that floating exchange rates were here to stay and that he supported lower trade barriers at home and abroad. The reporter for the New York Times tried to give color to his article: “'United States international economic policy,’ said Marina Whitman the other day, standing beneath some tall pine trees in Plains, Georgia, ‘is not an area of great partisan division—there is a very wide range of consensus.’” And, he concluded, “Mrs. Whitman was right.”22
Ironically, Jimmy Carter, the Democratic victor in the 1976 election, presided over many of the pro-competitive structural changes that the defeated Republican, Gerald Ford, had been unable to bring about.23 But, despite the deregulation of a variety of important industries—including airlines and trucking—that began during the Carter administration, it took the tight-money policies of Federal Reserve chairman Paul Volcker, accompanied by some five years of painfully high unemployment (1979–83), to break the back of stagflation and set the nation on a path of noninflationary growth.
Demand-side macroeconomic policies and supply-side structural measures both played important roles in making possible the twenty-five years of sustained economic growth that began during the Reagan presidency—the period that has come to be called the “Great Moderation.” As I once quipped, it takes both halves of a pair of scissors to make them work. A more difficult lesson was that there is no such thing as a painless cure for stagflation. It required individuals who stuck to their economic principles—presidents Carter and Reagan to pro-competitive measures and Federal Reserve chairman Paul Volcker to drastically tight monetary conditions—even in the face of mounting criticism, to make the country take its medicine.
Having returned from the CEA to private life determined to spread the gospel of facing economic realities head-on, I now realized how much personal determination and political clout were required to move in that direction. The collapse of President Ford's effort, after a promising beginning, to conquer stagflation by eliminating many of the economic inefficiencies created and fought for by particular interest groups had taught me my own hard lesson about the vagaries of the political process in a democracy. I had been proud of my country as I described to my mother's old friend in Vienna the virtues of democracy at its best. Now I was frustrated and disappointed as I watched democracy's downside in action: the ability of special interests and partisan politics to gut policies that would benefit the nation as a whole. Was business, I wondered, with its typically hierarchical structure, better than the democratic processes of government at getting things done?