Skip to comments.Remembering Nixon's wage and price controls
Posted on 08/20/2011 4:29:14 PM PDT by rabscuttle385
Remember "TARP," "Too Big to Fail," "Government Motors," "pay czar," the buzzwords of the Bush-Obama era? They reflected a disturbing trend toward presidential interference in economic life.
Forty years ago this week, President Richard Nixon showed us just how dangerous unchecked executive power can be to the free-enterprise system.
On Aug. 15, 1971, in a nationally televised address, Nixon announced, "I am today ordering a freeze on all prices and wages throughout the United States."
After a 90-day freeze, increases would have to be approved by a "Pay Board" and a "Price Commission," with an eye toward eventually lifting controls -- conveniently, after the 1972 election.
Putting the U.S. economy "into a permanent straitjacket would ... stifle the expansion of our free enterprise system," Nixon said. As President George W. Bush put it in 2008, sometimes you have to "abandon free-market principles to save the free-market system."
(Excerpt) Read more at washingtonexaminer.com ...
Bush was not the worst president we have ever had, but that quote is just pure nonsense.
Interesting to note how Libertines are always trash talking Bush Nixon et al but seem strangely incapable of ever saying anything at all about the Obama Democrat’s Progressive Fascist agenda.
,,,And don’t forget OSHA.
Because Libertarians are far more in line with the Rat party than the GOP. Legalizing drugs trumps everything, don'tcha know.
Apparently talking about what happened 40 years ago is way more relevant to Libertines then talking about what happened politically in the last 3 years.
You are 100% correct.
We have wage and price controls today... in the health care industry. Medicare and Medicaid limit what doctors and hospitals can charge. I don’t believe they started with Nixon whole country fiasco, but their result is the same. Your only option to accepting their prices is to not see ANY of their patients, an option that would put many doctors and nearly all hospitals out of business. It is further complicated by the HMOs (authored originally by Teddy K and signed into existence by Nixon) that extend monopolistic powers to many private insurers. The high cost of health care to those outside these price controlled monopolies is more the result of their subsidizing those covered ‘fee riders’ than the uninsured ‘free riders’ Obama (and Romney) liked to discuss. A free market always will work better and any true fix to the health care ‘problem’ starts with restoring one there. Restore freedom and wherever else the government shackles economic freedom and you’ll see the best health the world has known since Eve bit into the apple.
Neither of these men understood the Free Market system.
I got three words for you: “Medicare Part D”
Largest entitlement expansion in a generation, and a significant contributor to the country being broke today.
Maybe it’s because you expect Democrats to be socialists, but Republicans run as defenders of the Free Market.
Gee, we just saw a great example of the GOP defending free market principles by raising the debt ceiling 2 trillion dollars!
Isn't of squealing "ad homine" "strawman" every time someone points out a fact about the Libertine party you cannot answer, address the point.
If you take note, we were actually growing out of the debt we were in despite part D. What you clearly won't recognize is who actually bankrupted us. Notice the graph moving in the wrong direction in '08. I wonder what happened then?
I don't like part D either, but it is far from what broke the camels back. Put the blame where is squarely belongs.
Let's not forget the Earned Income Tax Credit, first proposed by Nixon, giving tax "refunds" to people who didn't pay taxes. One of those quirky things passed by congress too late for Nixon to sign into law, which he had pledged to do. He was gone when signing time rolled around, Gerald Ford signed it.
Increased under every administration since, without exception.
Also comment #17, one of the largest pure communistic acts of wealth redistribution.
Oh, Nancy Pelosi is absolutely responsible for her part in the budget blowout, but the person who signed those budgets is equally responsible.
With regards to “growing out” of the debt, I’m afraid that is an illusion caused by the enormous housing bubble and the apparent, but false, impression of wealth and prosperity it gave to the GDP numbers.
The plain truth is that, once you back out the growth of debt from GDP, the United States economy has been stagnant since 1983.
I didn't say a word about 'ad homine' or 'strawman'.
I pointed to the recent GOP controlled House compromising free market principles and raising the debt ceiling.
The fact is that the GOP very rarely stands by any freedom principles.
And I am not a member of the Libertarian Party, I vote GOP.
So your blaming Reagan.
I also forgot about Nixon scraping Bretton Woods.
I cast my first vote for Nixon. My family adored him. On hindsight, he was one of the most liberal presidents of the 20th century -- just behind FDR, Wilson and LBJ. But not far behind.
No I am not. I am simply citing the actual factual data. There are many other potential explanations and it is a gross oversimplification to say everything is the fault of the person who was President at the time.
Observe the following chart:
What you are seeing is the red line, which is GDP change without debt included, and the blue line, which is GDP change attributable to debt. The facts are undeniable - we have gone nowhere economically in three decades.
Experience confirms this. Are you better off than you were three decades ago? If so, you are in the minority.
The blame, in my opinion, lies squarely on purveyors of debt.
With your chart, I see a direct correlation between throwing away Bretton Woods in 1971 and making the dollar a fiat currency and things going haywire. I will blame Nixon. I am a proud over-simplifier after all.
and, does anyone remember the run-up in interest rates in 1979-80? Iff’en I ‘ember ‘zact’y, t’was about 18 to 21%.
And we had four kids to feed, and were trying to buy our very first house, after years of renting!
How is it the rate of debt change collapsed starting with 2007Q1 when in fact it has skyrocketed? Currently 10% of GDP is debt spending - a huge number.
It’s useful to learn from the past. It’s frequently noted among conservatives (including me) that it took a Carter to bring us a Reagan; less so that it took Nixon and Ford to bring us Carter.
Since the primary season hasn’t even started yet, this is a good time to try to avoid making the same mistake on some RINO running now. It makes a whole lot less sense to start now with the nagging that we must unite behind someone who hasn’t been nominated yet.
To illustrate I give you the example of the eight foot 2x4. It disappeared since it was under the price control regime.
But since ten foot 2x4’s were not they were abundantly available to be sawed off to make eight foot 2x4’s.
I rest my case.
You have a need for a read. Did you not see linked below the article, MORE BY GENE HEALY? Obamaphiles still longing for Camelot
Yes, it is, isn't it?
Time for my little history lesson, kids.
Back in the hippy-dippy days of the Nixon administration, Republicans (of which I was one, along with everyone in my family except my union-loving maternal grandfather) were obligated to not raise a ruckus about what Tricky Dick was doing if they wanted to go anywhere in the party.
You didn't want to side with the peaceniks and the drugged-out rock-and-rollers and the commies in the universities, after all. They were scum and Republicans are by nature more civilized, more urbane, more intelligent than to get mixed up with free-speechers, hippies and the free-love set which was just about totally anti-Nixon. And on top of that, they never bathed.
Well, August 15, 1971 changed all that. For many free-market oriented conservatives, Nixon had committed a treasonous act by instituting wage and price controls and getting the U.S. officially off he gold standard. His trip to China was generally not well received, either, but it was nothing as compared with his now admitting to be a full-fledged Keynesian. "We're all Keynesians Now."
The turmoil Nixon caused in the Republican Party can only be described as HUGH. My dad, who had been serving as county precinct chairman for several terms, could no longer abide the back-stabbing that soon erupted and resigned. My mother-in-law was essentially ridden out of the party for telling it like it was, and never invited back. She continued to vote Republican until her dying day but did not lift one finger to help her fair-weather friends who believed Nixon could do no wrong.
I have been told that these purges were not a local phenomenon limited to one area, but went on nation-wide in Republican circles.
In hindsight, Nixon caused immense damage to the party not just because of Watergate and all that followed but also his abandoning the conservatives who were and are the party's main get-out-the-vote workers at the local level. Many never forgave Nixon; others were OK with his treasonous acts but never forgave those who criticized him.
It was not a good time to be a Republican is all I can say.
Now, to the point MNJohnnie made about "libertines."
The Libertarian Party was formed by mainly former Republicans as a direct result of Nixon's wage and price controls and abandoning Bretton Woods. You can look it up.
I think that may have been more true of the rank-and-file people attracted to the LP and to libertarianism in general. I think that many hung around for a few years in waiting for something meaningful to happen just to walk away embarrassed at the antics of some prominent oddballs.
You are right on your assessment of Nixon. He is garbage. Put to the original point of MNJohnnie, the Libertines always slam the Right and forget about the Leftists. Just look at this piece from the founder of the modern Libertarian movement, Ron Pauls mentor.
If solid Conservative values is all the Libertarians wanted, why did they hate Reagan so much? He is, after all, the gold standard of Republican values.
Because he failed at what he promised to do: shrink the fedgov monster. That's all.
Look, I worked my butt off getting Reagan elected Governor and had many friends and associates working for him both then and after. His first term, getting things back in order after Pat Brown's unfortunate governorship was a success in most people's book. Things started sliding midway through his second term, and I'm sure there was a reason.
As President, Reagan could have walked the talk and taken the bold steps of dismantling the welfare state.
Why didn't he? He had broad public support even if Congress was run by the Democrats.
My own guess is he lacked the nerve after being shot by Hinckley.
Reagan at his very worst was ten times better than Nixon.
He was easily the best President in my lifetime in spite of his mistakes. We could use another one like him but I'm afraid it won't happen.
Once again, here we are slamming a solid Conservative instead of focusing on the malcontents and Leftists. Point proven by the original post.
Not being personally aware of anything meaningful happening in the early days of the Libertarian Party (no internet in the '70s, remember?), I'd like you to expand on your premise if you would.
I was not implying that "many" Republicans jumped ship and joined the LP after Nixon lit the fuse. Only that it was mainly disaffected Republicans who started the Libertarian Party. What happened later is another story, one which properly belongs on another thread.
The purpose of these discussions is not to slam but to elicit the facts.
If you are so concerned about hurting fellow Republicans, why do you frequent Ron Paul threads and drop your turds?
Because Ron Paul is a POS and is not even remotely Conservative or a Republican. I am not the only FReeper who finds him unappealing. Try reading what the big cheese has to say on the Ron Paul matter. Post #4.
There is a wide valley between Conservatism and Libertarianism. I am a solid Conservative. Nothing will change my mind on that. Especially pro drug, free love sorts like yourself.
You like to make unwarranted accusations, do you?
Was there anything I have posted on FR in the last 13 years that led you to that conclusion about me?
If you can find it, please show me. I must have been off my meds or something.
What we had been discussing, however briefly, was the impact of Nixon's wage and price controls. As I said earlier, in my opinion it was HUGH. And since both Nixon and Reagan are no longer with us, it is altogether fitting to evaluate them, warts and all, just as we routinely do Presidents of the other party.
The reason should be obvious: to prevent catastrophic mistakes in the future.
If you find this not to your taste, please do cheer for your candidate and try to ignore the naysayers. Then we won't have to be concerned about repeating history in the WH, because the 0bamanation will have secured another 4-year term, perhaps the last one of what was once a Republic.
Actually, that assessment is pretty close to the mark. Nixon closing the gold window was a major milestone on the path to the present monetary cluster****.
Hi DB, that chart represents ALL debt (from consumer to fed.gov), not just government debt. It is all the scarier when you realize that yes, government debt has been skyrocketing in a futile effort to stem the monetary effects of the popping of the housing bubble.
The sort that think it's just too cool to run candidates like a cop turned hooker, a Druid, a guy with blue skin, Howard Stern...
The anarchocapitalist sorts who would agree with Rothbard that the fall of Saigon was the death of a state.
Am I reading the chart wrong or does it not show that GDP was in fact flat clear back to 1953 without debt, and actually grew as debt mounted starting around 1971?
I don’t know who is more full of BS, you or that clown chart.
The numbers are too small before that point to deviate on the scale used. The scale is not in percentages but in absolute # of dollars.
Forget Watergate, he should have been impeached for the Wage and Price controls.
The source data is specified on the chart.
Do the math yourself if you are competent to (if not, your 3rd-grader should be able to help).
Lol. Yeah, I went over it again and gleaned some of its implications. It’s just about the worst statistical obfuscation I’ve ever seen. It’s a very obtuse way of depicting the abysmal GDP response to federal debt spending.