Alice in Watergate

Oct. 30 1998 3:30 AM

Alice in Watergate

How impeachment looked to an innocent inside the Nixon White House.

Washington, like, I suppose, the rest of the country, is alive with echoes of Watergate these days--for obvious reasons. How do President Clinton's offenses compare with President Nixon's? What light does the Nixon case throw on the definition of "high crimes and misdemeanors"? What precedent does Congress' procedure in the Watergate case establish for the procedure in the Lewinsky case?

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I do not propose to add to the volume of punditry on such questions. But I can add a footnote on the question of what it was like being an innocent in the White House during the Watergate affair. I use the word "innocent," of course, to mean not just "not guilty" but also "unaware" or "naive."

Iwas chairman of Nixon's Council of Economic Advisers during the whole business. I was at the Homestead, in Hot Springs, Va., Sunday morning, June 18, 1972, when I read, in the Washington Post, of the break-in at the Watergate Office Building. The previous evening I had given a speech to the Virginia Bankers Association about the wonders of the economic situation. Only a little before that I had held a press conference announcing that the economic statistics of the first quarter were the best in recorded history--or, I cautiously added, "at least in the Christian era." We seemed to be on our way to an orderly dismantling of price and wage controls. Nixon's re-election in November seemed assured, the only question being which Democratic candidate would be defeated most decisively. The Watergate break-in did not look like a cloud on our, or my, horizon.

For the next two years, up almost to the last days, I could see the cloud getting darker and darker but did not believe the Nixon presidency would come to a premature end. For one thing, I had my own experience with the extent of bias and animosity in the press against anything having to do with Nixon. During many years in Washington, before I entered the Nixon administration, I had had friendly relations with many reporters. I was then associated with the Committee for Economic Development, the least conservative of the business organizations, and we were the "good guys" to the liberal press. But these same reporters became my enemies and, I felt, misrepresented me as soon as it became apparent I was devoted to Nixon. As it happened, one of the president's chief pursuers in the press, Carl Bernstein, of the Washington Post, had been my neighbor in Silver Spring, Md., and a friend of my children's. He had been a likable boy, but I put no great stock in his professionalism or objectivity. So I did not believe the press was giving an accurate account of what had happened.

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A t 8 a.m. each day I participated in a meeting of the White House staff, presided over by the chief of staff--first Bob Haldeman and later Al Haig. Almost every morning in 1973 and 1974, we were given a status report on the Watergate case, the constant refrain of which was that everything was going to come out all right. I don't believe anyone was lying to us. But no one told us--and perhaps didn't know--how the legal and political process was going to unfold.

Still, I don't underestimate the importance of my own unwillingness to believe. Nixon had honored me by making me member and then chairman of his Council of Economic Advisers. He had treated me with respect and offered me his friendship. I was unwilling to believe that he had behaved in a way that a committee of Congress, even one composed mainly of his political enemies, would consider deserving of impeachment.

Ican think of only one economic policy decision that was probably influenced by the president's concern with Watergate. By the beginning of 1973, after the election, the wage-price control system began to come unglued. The world food supply had fallen because of bad weather in Russia and El Niño in the Pacific, food prices were rising beyond our control, and with food prices rising it was hard to restrain wages. When I spoke with Leonard Garment, then the president's counsel, he said the president was in trouble and asked whether we couldn't have some kind of economic spectacular to help bolster his public support. Perhaps because I didn't have enough imagination, I had no comfort to give him.

In March the president suggested to me that we might have another wage-price freeze, like the one we had imposed in August 1971 that had been so popular. I replied, smart-alecky, that you can't step in the same river twice. He came back with the wittiest words I ever heard from him: "Yes, you can, if it's frozen."

That was not the end of the matter. The economic situation continued to deteriorate and, as I now see, so did the political one. Nixon brought back as counselor John Connally, who, in 1971 and 1972, as secretary of the Treasury, had been his specialist in long-ball economic policy. The president wanted his economic team, thus fortified, to produce a dramatic economic policy that would improve the nation's economy and his political standing. A new wage-price freeze was one of the options to be considered. But none of us, not even Connally, wanted that. The president repeatedly asked us to reconsider. After several uncomfortable weeks he decided, without the benefit of his economists, to impose the freeze anyway. It was an immediate flop and did not last long. Then we reverted to unspectacular, even painful, economics.

As I look back at those days I am impressed by the way in which President Nixon continued to perform his duties in what was surely a time of great stress for him. Of course, I was not an intimate, and I did not see him in his private moments. But still, I had many meetings with him, and he showed no signs of distraction or impatience. He would take notes on his yellow pad and sum up the sense of our meetings in an orderly manner, as he had always done.

Near the end, in July 1974, I went out to San Clemente to draft what was to be, although we didn't know it at the time, Nixon's last address as president before his resignation message. The speech was long and, I can now see, rather platitudinous. But Nixon read all the drafts. He discussed them with me and Roy Ash, who was then the budget director, and he delivered the final speech with vigor on July 25 in Los Angeles.

It was on the plane flying back to Washington that we got news of votes in the House committee that made impeachment extremely likely. Two weeks later my wife, my son, and I were in the East Room of the White House, tears streaming down our cheeks as Richard Nixon said farewell to his staff.

Herbert Stein, a senior fellow at the American Enterprise Institute, was chairman of the Council of Economic Advisers under Presidents Nixon and Ford. He is a member of the board of contributors at the Wall Street Journal.

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