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First the freeze, then the flexible guidelines, produced considerable confusion. In the first month of Phase II, some 377,000 calls flooded Internal Revenue Service offices, which had been hastily pressed into service to answer questions from the public.
Connally, meanwhile, rushed into meetings with foreign finance ministers, dropped any pretense of charm, and freely used the 10% surcharge as a club to demand monetary concessions from the astonished officials. Worried about the global and domestic repercussions, Kissinger and Burns eventually asked Nixon to soften Connally's approach. Japan and Canada in particular were incensed at the trade penalties, since they rely so heavily upon U.S. markets. But the U.S. at year's end struck a good bargain. The deal was taking shape: a shift in the balance of world currencies in exchange for devaluation of the dollar and the dropping of the import surcharge.
In sum, Nixon acted belatedly but well on the domestic economy. Labor has won some big concessions from the Wage Board and removed some of the psychological tautness from the guidelines, thus diminishing the original sense of urgency created by the Administration. Nevertheless, many experts are optimistic about the ultimate effectiveness of the program, and TIME's Board of Economists is predicting solid economic recovery for 1972. The question remains whether the recovery will come quickly and widely enough to keep the economy from hurting Nixon in the election.
On the foreign economic front, Nixon and Connally played a daring and sometimes crude game of economic brinkmanship that at times seemed to threaten the entire fabric of U.S. relations with its friends and trading partners. While no one could foretell the long-range psychological effects and the resentments that might linger, by year's end Nixon and Connally had plainly cleared the way for the grinding task of renegotiating the Western world's trade and monetary system (see THE ECONOMY).
IV: THE U.S.
Except for his action on the economy, Nixon has failed to convey any feeling of urgency in his attacks on domestic problems. The "New American Revolution" that he sketched last January in his State of the Union speech never resembled John Mitchell's overblown description: "The most important document since they wrote the Constitution." But it did include some highly commendable ideas. None has yet been acted upon.
His "six great goals," except for his action on the economy, are all stalled. Welfare reform, revenue sharing, reorganization of the Executive Branch, improved health care and eliminating environmental pollution have been introduced in various forms but remain in limbo, only partially approved or ignored. Congress did vote $1.6 billion over three years for a concerted research drive against cancer and the Senate passed a far tougher water pollution bill than he sought.
Quiet Pride. Nixon's weak domestic record suffered further from the jolting defeat by Congress of his proposal to develop a supersonic jet transport aircraft. The event seemed to say that Americans are not only concerned about the environment, but no longer automatically buy the notion that the U.S. must always be first in everything.
Although a President is relatively powerless to reduce crime, Nixon had campaigned hard on a