These twin crises—of managing the stability of prices and employment at home while defending the corporate fiefdoms of American businessmen in foreign lands—shaped public perception of the global disorder and primed it against the Republicans in the 1970 midterms. Among the Democrats, representatives from the Northern industrial cities were demanding immediate wage-and-price controls and an increase in top-end taxes. The party expanded their majorities in both houses that November, and for a second time in early 1971 passed legislation authorizing the President to impose controls on wages and prices.
Caught between an inflation from below and an expanding public regulation of business from above, where was a centrist executive to turn? In August 1971, the President relented and ordered a ninety-day wage-price freeze, to be followed by a stabilization program timed with his election campaign. A decisive political swing came from the AFL-CIO, whose leaders were then engaged in a fratricidal war within their own Democratic Party over the Vietnamese intervention. Another came from the success of the price control program, which brought down inflation as employment recovered during 1972. And a third came from organized business, whose donations flowed in an unprecedented sixty-million-dollar torrent into the coffers of the Committee to Re-Elect the President (CREEP).
For a decade after the event, the journalists and intellectuals of the New Left offered partial and alluring explanations of the 1972 election. Paul Sweezy and Harry Magdoff thought the post-election Congressional hearings an opportunity for capitalists to bring to a close the war jeopardizing the dollar, which Henry Kissinger insisted on prolonging; the editors of NACLA saw in CREEP a joint effort by Humphrey and Nixon, on behalf of Yankee imperialism, to stop McGovern’s brand of Midwest-Scandinavian social democracy; Carl Oglesby wrote of the “Yankee-Cowboy War” in Washington between Southern and Western oilmen and Eastern financiers; Kirkpatrick Sale wrote of the “Power Shift” signaled by the “Rise of the Southern Rim”; the editors of Ramparts surveyed the debate and found a common element in the growing power of “Big Brother and the Holding Company”—the national security state and monopoly capitalism.
For all the narcotic paranoia of counterculture, we know a remarkable amount from these books. And yet almost none of it gets reiterated in contemporary accounts of the period. Where should we place the sprawling corruptions revealed by the investigations, in the story of our national maturation from a commodity-exporting, tariff-protected, developing society to the technological and military center of a global empire? Our existing historiography of the “Rise of the Right” rarely accords Watergate this climacteric impact. Yet the financial interests revealed by the scandal betray a decisive conflict over national policy at a turning point in twentieth-century global history. Our understanding of political competition today should turn on this broader question of interpretation, as the course of history appears once again to be crashing against uncertain embankments.