Nixon Turns from Chile to Chicago

IN his first two years as President, Richard Nixon's overriding interest was foreign policy. By one knowledgeable estimate, he spent four out of every five working hours on international affairs. Says an adviser who recently left the White House: "He knows more about Chile than Chicago." Now the President intends to remedy that, and with good political reason. While he has successfully neutralized Viet Nam as an issue, domestic difficulties—notably the state of the economy—damaged the Republican showing in the 1970 elections. Nixon's own chances for re-election are at hazard in 1972, so it is no surprise that he has now turned about to tend to the nation's needs at home.

It is none too soon, for by Nixon's own measure the premier problem of unemployment has reached the peril point. Because unemployment rates ranged over 5% in the Democratic years of 1961 through 1964, Nixon regards that as "the critical number." During his televised "conversation" last week with four TV journalists, which he handled advantageously (see THE PRESS), Nixon carefully stayed within his own defensive perimeter by observing that the average unemployment for 1970 was "approximately 4.9%"—a figure that he conceded was "too high." In fact, the monthly figure has already gone considerably higher: the Labor Department announced last week that the unemployment rate reached 6% in December, the highest level since 1961.

The President has clearly got the message that the economy badly needs a dose of stimulation if unemployment is to be cut substantially by 1972. Politically, Nixon has little choice but to accept deficit spending as an economic pump primer, however offensive the notion of unbalanced budgets is to orthodox Republican economics. "I am now a Keynesian," he confessed shyly after the TV conversation —which led ABC's Howard K. Smith, one of his interlocutors, to observe later: "That is a little like a Christian Crusader saying, 'All things considered, I think Mohammed was right.' "

No Grand Design. As Nixon left for an eight-to ten-day working vacation in San Clemente, his financial experts—led by George Shultz, director of the Office of Management and Budget—were wrestling with a budget for the coming fiscal year that will likely run between $230 billion and $232 billion. That is a big jump up from the $213 billion in federal spending expected for the year ending June 30. Since Nixon last week ruled out any new federal taxes, he will probably find himself with at least the $15 billion deficit for fiscal 1972 that he needs to make a dent in unemployment. The budget figures have not yet been fixed, however. Draft chapters circulating in the OMB had blank spaces where some numbers should have been. In one, a wag wrote: " 'A few honest men are better than numbers'—Oliver Cromwell."