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Another potential obstacle to the success of Phase II is the degree of flexibility shown by the Pay Board and the Price Commission. Both left themselves ample room to make exceptions from the guidelines for hardship cases—and to exception the program to death, should they choose or be pressured into doing so. The Pay Board, for example, agreed to consider vagaries like "the equitable position of the employees involved" in deciding about new contracts. And the Cost of Living Council modified price rules less than a day after they had been posted. Some of the nation's largest firms that face imminent increases in wages, including automakers, will be allowed to raise prices without waiting the required 30 days. Their prices will be subject to later rollback by the Price Commission. Nonetheless, as even the President acknowledged, some highly visible prices can be expected to ''bulge" in the first days of Phase II.
Toward Phase III. For all that, the debate and even rancor of the past three months have produced a program close to the one long urged on Nixon by many economists, including a majority of TIME'S Board of Economists. "It is a good, constructive and reasonable start," says Walter Heller, former head of the Council of Economic Advisers. The biggest question of Phase II is whether the panels of men named by the President to administer his plan can convince businessmen, workers and consumers that the controls are being handled strictly yet equitably. If they can do so, there is a good chance that the U.S. economy will move into what the Administration has already named Phase III: economic recovery.
* "Guideline" has become something of a Democratic economists' buzz word, and the Nixon White House prefers "yardstick." Indeed, the White House is proudly passing out 36-in. wooden rulers bearing the motto: "Follow the Yardstick to a New Prosperity."