08/27/24 Not Price Controls Again!!!

Inflation makes politicians do crazy things. That is because voters are hypersensitive to the rate of inflation blaming politicians.  I assure you that Richard Nixon was not a socialist or communist but he did attempt to use government dictates to control prices when they rose too much for his political comfort. “Nixon issued Executive Order 11615 (pursuant to the Economic Stabilization Act of 1970), imposing a 90-day freeze on wages and prices in order to counter inflation. This was the first time the U.S. government had enacted wage and price controls since World War II. At the time, the U.S. also had an unemployment rate of 6.1% (August 1971) and an inflation rate of 5.84% (1971). To combat these problems, Nixon consulted Federal Reserve chairman Arthur Burns. An import surcharge of 10 percent was set to ensure that American products would not be at a disadvantage because of the expected fluctuation in exchange rates. Politically, Nixon’s actions were a great success. The American public believed the government was rescuing them from price gougers (Wikipedia)” …but otherwise economically not so much including his export embargo on soybeans. The dollar collapsed and oil priced in dollars soared. Nixon-omics had a long-lasting disruptive impact on the US economy. Then…