Inside the Nixon Administration: The Secret Diary of Arthur Burns, 1969–1974 (review)

Over the course of his career, Robert H. Ferrell has enriched our understanding of the past through both fine histories and careful edited work, the latter of which has provided a broad audience with invaluable access to primary documents from the battlefields of World War I, the Treasury Department’s investigation of Tom Pendergast, and the presidencies of Harry Truman and Dwight Eisenhower, among other topics. Ferrell’s latest book, Inside the Nixon Administration: The Secret Diary of Arthur Burns, 1969–1974, contains the recently released diary that the Counselor to the President and then Chairman of the Federal Reserve kept during the Nixon years. Throughout its pages, Burns’s entries—aided by Ferrell’s concise yet informative commentary—provide a splendid vantage point on both the economic policies and the personalities of the administration.

First, Burns’s diary ends longtime speculation that the Fed chief was the driving force behind what came to be known as the “Nixon shock,” the president’s August 1971 announcement that the United States was closing the gold window or, in other words, ending the convertibility of U.S. dollars to gold, which had maintained international exchange rates since Bretton Woods after World War II. As it turns out, Burns opposed the administration’s move. He wrote on August 12, 1971, for instance, “My efforts to prevent the closing of the gold window—working through [Treasury Secretary John] Connally, [Undersecretary of the Treasury for Monetary Affairs Paul] Volcker, and [Secretary of Labor George] Shultz—do not seem to have succeeded. The gold window may have to be closed tomorrow because we now have a government that seems incapable, not only of constructive leadership, but of any action at all. What a tragedy for mankind!” (49). With increased spending on domestic programs and Vietnam, the United States found itself printing more money and then sending a good bit of it overseas, which in turn led other countries to redeem the dollars they received for gold, which endangered U.S. gold reserves. This made the pressure to end convertibility enormous, but Burns “expressed fear that a closing of the gold window would lead to chaotic financial markets, and that it might be followed by trade wars, currency wars, and political friction—such as occurred during the thirties. No one else embraced this argument . . .” (52).

Likewise, Burns’s diary admirably acquits him of charges, popular at the time, that he had increased the money supply to secure Nixon’s reelection. Ferrell rightly points out that scholarship on the matter has supported Burns, but the diary provides added details by noting the numerous occasions on which the president expressed “deep concern” about the money supply, and his beleaguered Federal Reserve Chair had to counter and/or reassure him. Nonetheless, Burns’s entry on November 5, 1971, reveals that he was not above diverting Nixon from monetary policy by focusing his attentions on fiscal policy: “We then talked about ways of manipulating expenditures for the election; he thought that Cap Weinberger [Deputy Director of the Office of Management and Budget] could do that for him and that he would go after this at once” (63).

Equally interesting as his insights on administration policy—and far more entertaining—are Burns’s observations of the personalities who populated the Nixon White House. He noted as early as 1970 the “amoral leanings of Ehrlichman and Haldeman” (33) and, while expressing admiration for Henry Kissinger’s achievements, wrote that he was troubled by Kissinger’s “egomaniacal approach” (124). When Pat Nixon assured Burns in December 1973 that 80 percent of Americans supported her husband, he recorded, “Talk about self-delusion!” (116). To be certain, Burns was sometimes quite wrong—he declared in early 1972, for example, “Ted Agnew is an honest man” (76)—but overall the Fed chief ’s assessments in his diary seem remarkably astute, particularly in regard to Nixon himself.

Indeed, Burns...