When the Nixon administration imposed wage and price controls, I was a correspondent in Chicago for Business Week magazine.
The rate of inflation as represented by the CPI slowed in 1972 to 3.2% from 4.3% in part because of wage and price controls, and then rose 5.6% in 1973.
Things came to a head in July of 1971 when Nixon called a meeting with Shultz and Connally to tell them he indeed decided to close the gold window and impose wage and price controls.
Among the proposals he wrote about most frequently were: severing the link to gold and letting the dollar float, fighting inflation by reducing the growth of the money supply, ending the draft, abolishing wage and price controls, and cutting taxes.
Digging into history, Wigmore points out that the bad crashes in the past usually coincided with bad policy decisions by governments: In 1929 protectionism was on the rise, and in 1973-74 there were the politically inspired Arab oil embargo, wage and price controls, the Vietnam War and Watergate.
Against the wishes of the Allied occupiers, he overnight threw out the German system of rationing and wage-and-price controls.
Wartime wage-and-price controls were swept away, as was the rationing of food, gasoline and other items.
FORBES: Put Uncle Sam On WeightWatchers And The Economy Will Expand
Despite espousing free-market principles, Nixon actually went on to impose wage-and-price controls as well as protectionist measures on foreign trade.
When the government recognizes that all its efforts to control inflation are too tepid and thus futile, it will eventually institute price and wage controls.
On the government side, unions were powerful, price and wage controls were a reality, and tax rates were high.
The government supercharged growth, stimulating demand with wage increases, price controls, an undervalued peso and public works.
应用推荐