Democrat John B. Connally's (1917-1993) appointment as Secretary of the Treasury was seen as a shrewd political move for President Nixon, who had to reorganize his Republican cabinet in response to Democratic gains in the 1970 congressional election. In response to deteriorating domestic and international economic conditions, Nixon announced his "New Economic Policy" in 1971. Internationally this meant, "closing the gold window," or an end to the United States's legal obligation to exchange dollars held by foreign banks for gold. For the first time since the 1944 Bretton Woods Conference, the dollar was no longer pegged to gold and world currencies floated (this was formalized by Treasury Secretary George Shultz in 1973).
Domestically Nixon and Connally initiated deficit spending under the name of a "full employment budget," and imposed a wage and price freeze. Connally was described by New York Times columnist James Reston as "the spunkiest character in Washington these days.... He is tossing away computerized Treasury speeches, and telling American business and labor off the cuff to get off their duffs if they want more jobs, more profits and a larger share of the competitive world market." Connally resigned in 1972 to campaign for Nixon's reelection.
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