CONCLUDING a speech on economic policy at a VIP-stacked Manhattan dinner three years ago, George Shultz startled the audience by abruptly breaking into song. To the lively tune of Silver Dollar, the then director of the Office of Management and Budget belted forth in full voice:
A fact without a theory
Is like a ship without a sail,
Is like a boat without a rudder,
Is like a kite without a tail.
A fact without a figure
Is a tragic final act,
But one thing worse
In this universe
Is a theory without a fact.
Shultz is seldom short on either fact or theory, although the softspoken, smooth-faced economist seldom expresses his ideas in song. His quick grasp of facts and theories, his skill in persuading the federal bureaucracy to act on them—plus an ironclad loyalty to the President—are the qualities that have prompted Richard Nixon to keep investing his Treasury Secretary with added clout. By now Shultz has become one of the two or three most powerful men in Washington.
Working a twelve-hour day from a West Wing White House office as well as in his quarters in the Treasury, Shultz has taken over as trusted second in command (after Nixon) in an enormous range of Government functions, some of them only indirectly economic. Increasingly, when Nixon is called upon to make a final decision on policies affecting agriculture, labor, transportation or industry in general, he is listening to—sometimes leaning forward to hear—the quiet, unruffled voice of Shultz setting forth the choices. "He's Mr. Clean," says a longtime associate. "When the President asks him a question, George gives an answer on an honest and open philosophical base."
His most compelling job last week clearly was to handle the devaluation. Another stunning example of just how far Shultz's answers can lead the Administration was the President's new farm program. Largely on the recommendation of his economic chief, Nixon proposed that Congress gradually abolish the federal subsidy program, which the nation's farmers have relied upon for income since the Depression (see TIME ESSAY, page 22). Shultz has long argued that the old farm policy, which has cost federal taxpayers many billions over the past 40 years, is drastically outdated and keeps food prices higher than they would be in a free market.
At times, Shultz has given some bad advice. As the first director of the Office of Management and Budget, he held to a steady-as-she-goes insistence that the economy in 1971 would turn up strongly without more Government stimulation. He made a celebrated prediction that the gross national product in 1971 would reach $1,065 billion; it turned out to be some $15 billion less, a huge error. "The most dramatic mistake I was involved in," he admits, "was in judging that the economy in 1971 would expand more rapidly than it did."