Meanwhile, Back at the Supermarket

...Under the circumstances, the President is seeing less of Connally these days...

...If the gamble fails, however, he will have no time left to try his luck on another combination...

...The freshly devalued dollar is being sold short without remorse in nearly every major foreign capital...

...economy to respond to even the most dramatic Presidential spin of the wheel...

...There are a good many housewives who would dispute that claim...

...In the words of one official, the President is "going to sweat this one out...

...In a cause-and-ef-fect process, the financial communities in both Europe and Japan are once more betting against the Administration's ability to cope with monetary problems...

...But a bull market is incapable of restoring economic vigor if the underlying problems remain unsolved...

...Though a Wall Street rally may be politically desirable, the President's managers do not believe it will be enough to insure his reelection...

...Now that the exhilarating moments of the wage-price freeze are mere memories, Nixon prefers to spend his working hours with Henry Kissinger and, for that matter, Chou En-lai...

...More than six months have passed since the President announced his new economic program...

...Herbert Stein, who recently was placed in charge of the official economic crystal ball as chairman of Nixon's Council of Economic Advisers, has said he looks forward to a "selective decontrol" over the next several months, with "a possibility that the controls will go before the election...

...But since the Nixon stabilization program has never had a practicable enforcement mechanism and remains riddled with escape clauses, Stein's prediction cheered no one and severely dampened the morale of Price Commission and Pay Board functionaries...

...With the campaign just under way, does Nixon propose to antagonize a business community that already has its hands full coping with inflationary labor contracts the Pay Board cannot control...

...Nevertheless, it must be some comfort to Nixon that in their private calculations they have yet to dip their brushes into the deep shades of gloom favored by Democratic candidates and their advisers...

...Small wonder, then, that the Administration??no less shy than its predecessors in calling attention to its virtues??has yet to claim success for the Phase II controls that supplanted the freeze in November...

...But they are also highly inflationary...

...The projected 1973 deficit of $25.5 billion would be the second largest of the postwar era, exceeded only by the $38.8 billion deficit for the current fiscal year...

...Having set the Administration on a totally new economic course last August, and having trimmed the sails anew in his January budget message, Nixon finds himself at the helm of a vessel not fully under his control...

...Nixon has had a way of surging ahead in the stretch, but in 1972 the economic track may prove too slow and muddy for him...

...The fact of the matter is that in major collective bargaining agreements wages are going up at an average annual rate of 11 per cent, just as they did in 1971...

...This will enable Nixon to campaign (in a restrained manner, as befits a President) on a new theme: his demonstrated capacity to turn the economy around toward the goal of full peacetime prosperity...

...After all, one could hardly expect such loyal Nixon lieutenants as John Connally and Donald Rumsfeld, the council's respective chairman and director, to lend their names to a document publicly reporting that no real progress has been achieved in reducing wage increases to the Administration's 5.5 per cent standard...

...Of course, the council cannot publicly acknowledge that without demolishing yet another tenet of the Nixon economic gospel...

...Moreover, he is quite willing to tell reporters and senators of his doubts??presumably in the belief that an official forecast of unrelieved high unemployment can minimize its political importance...

...But to be fair about it, often as not the decision to speculate against the dollar is being made in the New York headquarters of multinational corporations, with cold-hearted foreigners playing only a supporting role...

...It must dry out quickly if he is to prevail in the race...

...What leverage he may have left to change the nation's economic course is contained in the fiscal 1973 budget, which will come into play during the campaign...

...This is a brutal business, somewhat akin to telling a former mistress that you will again return her love if she makes herself more beautiful, and then spurning her once she has done so...

...Recently the Price Commission noted that while the wholesale price index for December reflected the sharpest increase since last February, the bulk of the increase was attributable to a rise in agricultural food products, which are uncontrolled...

...As a convert to Keynesian ideology, Nixon intends these policies to have a direct stimulative impact on the economy...

...Last month the Cost of Living Council, which determines policy for the economic stabilization effort, said in its first full-scale published report: "The postfreeze program has not been in effect for a sufficient period...

...to permit a comprehensive evaluation of its effectiveness...

...In addition, the Cost of Living Council would have us believe that "many new wage increases may be smaller than the limits set by the standards," since "labor markets are relatively slack...

...In a political year not likely to be remembered for official understatement, that disclaimer stands as a paragon of credibility...

...Yet labor markets could sag until the bottom dropped out without effectively altering critical wage scales, since powerful unions and their corporate counterparts have largely insulated themselves from the demand side of the economy in negotiating labor agreements...

...Nixon hopes (he may even believe) that the measures already taken will stimulate the economy sufficiently by the fall to check unemployment and induce consumer confidence without triggering a wild resurgence of inflation...

...Whose investigation...

...MEANWHILE BACK AT THE SUPERMARKET BY ANDREW J. GLASS Washington While the President has been seeking to impart cosmic significance to his China journey and the trip he will make to Russia in May, his true political fortunes have been unfolding more mundanely in neighborhood supermarkets throughout the land...

...Kissinger, and hope that the press and public will become equally absorbed in these adventures...

...Meanwhile the Democratic challenger, thus deprived of his only viable issue, will retreat in dismay and frustration...

...By that he means Nixon will focus his full attention on the diplomatic moves of his modern-day Metternich, the peripatetic Dr...

...What regulations...

...It is true that the President puts foreign affairs ahead of domestic problems, but that is not the point...

...it takes at least six months for the U.S...

...For in the end, November's Presidential election is more likely to turn on the continuing increases in grocery prices than on televised images of Richard Nixon nibbling Peking duck...

...To further his political interest, Nixon could still attempt to send the stock market zooming by inducing the Federal Reserve Board to lower interest rates drastically, or perhaps by calling for a new round of tax cuts...

...But whatever the source of the increase, the psychological impression on the public is the same...

...Looking at it another way, the White House is in the midst of a great gamble...

...The freeze has been allowed to thaw considerably and his economic managers have been shunted from the limelight, their pictures being neither bright nor dark but a murky gray...

...Overall, the economic situation is a good deal more critical than is readily apparent...

...The impact of the postfreeze surge in wages and prices (plus the recent series of orders exempting major segments of the economy from all controls) has kept the Price Commission and Pay Board pumping at full steam to stay in place...

...With no real friends at the White House, the bureaucrats serving on the wage-price boards hope somehow to muddle through, and therefore grasp at straws...

...In a January 14 comment to the New York Times, Price Commission Chairman C. Jackson Grayson Jr., another Administration champion of understatement, said that Stein's remarks were "premature" and "could distort the whole control mechanism," because "if companies start thinking we will be going out of business soon, they might increase their profit margins in violation of our regulations and gamble that controls will end before they are investigated...

...Treasury Secretary John Con-nally, feeling not at all secure in his role as the chief economic panjandrum, wonders whether the unemployment rate can be brought below 5 per cent of the labor force before Election Day...

...By early September, if all goes according to Presidential plan, the economy will start to sprout some measurable signs of improvement...

...There is simply no energy left for effective regulations and elaborate investigations...