Inside the Nixon Administration: The Secret Diary of Arthur Burns, 1969-1974

by Robert H. Ferrell (Editor)

As chairman of the Federal Reserve Board in the seventies, Arthur Burns had a unique view of the Nixon administration. Burns first joined the Nixon administration as an advisor in 1969 and was privy to the dynamics of the president's coterie over the course of six tumultuous years. Now the recently released secret diary of this top-level economist offers a surprisingly candid inside look at Richard Nixon's fall.

The diary tracks Burns's growing awareness of Nixon's behind-the-scenes maneuverings and worrisome behavior (such as "insane shouting") and reveals how such things undermined his respect and enthusiasm for the president. Perhaps even more telling, Burns's evaluations of his colleagues provide piercing insights into the president's inner circle, including Henry Kissinger ("a brilliant political analyst, but admittedly ignorant of economics"), George Schultz ("a no less confused amateur economist"), John Connally ("a thoroughly confused politician"), and the "vulgarians" H. R. Haldeman and John Ehrlichman—the only people he thought Nixon felt relaxed around.

The Burns diary also offers rare and telling glimpses into the era's economy—particularly an account of how Nixon exerted political pressure to shape monetary policies that helped to fuel the stagflation of the 1970s. The administration sought to close the so-called gold window, an approximate valuation of dollars with gold bullion, by floating the dollar, and the consensus over many years has been that Nixon himself arranged this—speculation now confirmed by Burns's diary. It also underscores the growing pressure Burns felt to serve the needs of Nixon's reelection bid rather than the economic welfare of the nation.

Sequestered for decades and unavailable until 2008, this document reveals an honest and relatively apolitical man surrounded by partisans in top administrative positions who were dishonest, inept—or both. "The President has many shortcomings," wrote Burns. "He has few convictions, but now and then he gets into a euphoric mood where he wants to persuade himself that he's a statesman. But his sycophantic advisers cannot even recognize that."

Deftly annotated by distinguished historian Robert Ferrell, who provides effective historical context and perspective, the Burns diary is a potent—and poignant—testament to the Machiavellian and often Byzantine world of American presidential politics.

Genres: History, Presidents, Autobiography

156 pages, Hardcover

First published October 28, 2010

About the author

Robert Hugh Ferrell was an American historian and author of several books on Harry S. Truman and the diplomatic history of the United States. He served in the U.S. Army Air Forces during the Second World War and was an intelligence analyst in the U.S. Air Force during the Korean War. He received a B.S. in Education from Bowling Green State University in 1946 and a PhD from Yale University in 1951, where he worked under the direction of Samuel Flagg Bemis and his dissertation won the John Addison Porter Prize. He went on to win the 1952 Beer Prize for his first book, Peace In Their Time, a study of the making of the Kellogg-Briand Pact.

He taught for many years at Indiana University in Bloomington, starting as an Assistant Professor in 1953 and rising to Distinguished Professor of History in 1974. He has held several notable visiting professorships, including Yale University in 1955 and the Naval War College in 1974.

Reviews

[Frank Stein · Rating 4 out of 5]

There may not be many outright revelations here, but for an inside look at how Nixon's own advisers came to fear and despise him, this book has no equal.

Arthur Burns' was the Chair of the Council of Economic Advisers when Nixon was Vice President, and when, 8 years later, Nixon became President himself, he brought Burns back at the same job, then promoted him to chairman of the Federal Reserve. Despite the supposed "independence" of the Fed, Nixon kept Burns famously close, and, as his diary shows, Nixon badgered and pleaded and begged him to keep the money spigots open, at least until "the election," which he frequently discussed to all his advisers as the preeminent concern in what policy they should pursue, even if only temporarily for political show. As Burns laments, he discussed these political considerations constantly and without a hint of self-consciousness.

Burns, however, seems unaware of how his own independence was being compromised by his constant attendance at Nixon Cabinet meetings, the "Quadriad" of Nixon's 4 top economic officials, Camp David retreats, and constant social gatherings. His diary too, despite his growing concern with Nixon's conduct and with the "backbiting" and "childish" infighting of George Schultz, John Connally, and other aides, seems singularly focused on the administration itself and has almost nothing about his time at what could be called his "day job" at the Fed. Though he becomes distressed when "I got a stern letter from the President urging me to start expanding the money supply," he seems incapable of questioning the very propriety of such a demand. This was a kind of cognitive capture that Burns, who can come across as supremely haughty, could not acknowledge to himself.

In the earlier entries Burns does explain his admiration for Nixon and notes that he had, after all, trained and thought for years about nothing but getting this one job. Later, Burns realizes that Nixon cared for nothing except maintaining and expanding his power, and perhaps carrying out his grudges. In a particularly disturbing moment, in April of 1973, he describes Nixon attacking the "Jews" who supposedly sabotaged his Soviet policies, and exclaimed that "He would go before the country, denounce the Jews and the Jewish organization who were corrupting the thinking of the Senate, and a wave of anti-Semitism such as this country had never seen would follow" and he went on to denounce the Jews who were preventing him from bringing peace. This is bordering on totalitarian rhetoric, and the fact that he said it in front of the a group that included the Jewish Herb Stein and Burns himself, lead Burns to question his sanity. Yet he too could not tear himself away from the power.

There are a few minor revelations here. Burns, despite his reputation as a conservative, seemed to be the preeminent force for the wage and price controls that Nixon put in place in 1971, and was the preeminent force arguing against the decoupling of the US dollar from gold, which Nixon did at the same time. He lambasted the other economic adviser Herb Stein, because he didn't know that "the free market was already dead." The diary also shows that Kissinger, after he moved to the State Department, came to rely especially on Burns' economic expertise, and unburdened himself to him in an uncommon way. To Burns, Kissinger repeatedly called Nixon a "criminal" who had lost the faith of the American people. Yet both could not separate themselves from the man. In Burns's last entry, just a few days before Nixon's resignation, he and Kissinger express shock at the level of hatred and profanity they heard on the Nixon tapes, and, despite all their conditioning, claim to not recognize the man they thought they knew in them. Burns thinks though that the hate Nixon expressed on the tapes finally helps explain why Nixon spent so much time with hateful men Burns despised like Haldeman and Ehrlichman. In his last sentence, Burns says that Nixon "could relax with them and be himself." It's one of the most damning lines I've ever read.

[Lance Cahill · Rating 3 out of 5]

Interesting perspective, though the book is limited by its form: diary entries presented with relatively little editorial intervention, explanation, or later reflection. Burns’s significant involvement in domestic policy once he became Fed Chairman is a useful reminder that Federal Reserve independence is, in practice, as much a product of recent history and individual personality as it is an unquestioned historical fact.

Burns’s criticism of Nixon and others in the administration sometimes reads less like dispassionate observation than as a foil for his own preoccupations. One example stands out. Burns devotes considerable attention to the interpersonal drama surrounding a press leak, allegedly given with an unfavorable spin, about plans to raise the Fed Chairman’s salary. Three years later, in the final month of Nixon’s presidency, Burns recounts a conversation with Kissinger in which Kissinger seeks his advice about what to do. Burns uses the occasion to question Kissinger about whether he knew of the earlier plan to damage Burns through the salary story, based on Burns’s belief that the matter had been loosely discussed aboard the presidential yacht Sequoia on a night Kissinger may have been present.

It is striking that the diary entries appear to stop in 1974 and show relatively little introspection, or even much concern that Burns himself might have been wrong. And, no, I don’t consider this to be unfair as there was clearly a public purpose for retaining these diary entries and then entrusting them to an archive administered by the federal government.

Burns was likely the last Fed Chairman who regarded inflation primarily as a nonmonetary phenomenon.* And hopefully he was the last chairman to dabble so aggressively in domestic policy agenda-setting.

*For a comprehensive but still relatively concise summary, see: https://www.richmondfed.org/-/media/r...

[Christopher Saunders · Rating 3 out of 5]

This little volume offers a look at the thoughts and actions of Arthur Burns, who served as Federal Reserve Chairman from 1970 through 1978, during the stress of the Nixon Shock, Stagflation and other crises of that era. Burns came into government as a Counselor to Richard Nixon, where his long-winded arrogance exasperated Nixon's inner circle and alienated the President; within a year he was kicked upstairs to the Federal Reserve, overseeing Nixon's drastic shifts in financial policy. Thus this diary offers some nice tidbits for economic historians, especially Burns' exasperated reaction to the wage and price freezes of 1971 and devaluing the gold standard, and yet more minutiae about the dysfunction within the Nixon Administration (his feuds with Daniel Patrick Moynihan and dislike of John Connally and Herbert Stein receive much space, along with the President's frustration with Burns). Unfortunately Burns, like many historical diarists, isn't the most captivating writer; most of his entries are terse, undetailed and marginally interesting; not to mention how he skips huge swaths of Nixon's presidency, whether due to inactivity or disinterest. There's enough meat to warrant a look for serious researchers, but casual readers and history buffs won't find much of interest.