View Full Version : Nixon and the Post-Watergate Economy
Emperor Norton I
August 28th, 2009, 12:22 PM
I'm not an economist by any stripe and have only an idea of the economy limited from about 1980 to today, which is why I ask this. How would Richard Nixon, had he not faced Watergate, have handled the economy/economic issues between 1974 and 1976? Similarly, how would this have effected the economy in actuality, and things to come in ensuing years?
Emperor Norton I
August 29th, 2009, 06:59 AM
Bump. Post or you get the whoopin' stick.
August 29th, 2009, 07:26 AM
More or less like Ford, the interesting is who is going to be the Republican candidate in 1976, for he would likely win, and afterward lose to a Democrat in 1980.
Emperor Norton I
August 29th, 2009, 11:09 AM
More or less like Ford...
Are you sure? Ford thought that the economic problems were caused by overconsumption, and acted accordingly (well, at least he just told people not to overconsume; I'm not sure if he actively did much). He also tried to remove Nixon's price controls on oil which I think failed. I'm not sure Nixon would have followed that same path, or would have be as ineffective if he did follow a similar path.
August 29th, 2009, 04:40 PM
Nixon was not all that terribly concerned about inflation (he took the US off the gold standard, and had Arthur Burns maintain an inflationary policy, because he blamed his 1960 defeat on overconservative Fed policy causing the recession in that year). He also was a fan of interventionist policy ("we are all Keynesians now" is actually a paraphrase of Milton Friedman, though he did say "I am now a Keynesian in economics" when he took the US off the gold standard).
I'd predict that he'd try additional price controls (which would all fail), as well as low interest rates to attempt to create economic growth and reduce unemployment, and several Keynesian government spending projects. It would probably lead to economic growth sooner, but at the cost of ~20% inflation for a couple of years.
August 29th, 2009, 04:59 PM
I think Wormguy pretty much hit the hammer on the nail there, as Im fairly certain Tricky Dick wouldn't have intiated the WIN(Whip Inflation Now) Campaign that Ford/Connally supported. I think an interesting factor however, if Nixon brought back the idea of "Free Enterprise" Zones to breath life into the decaying inner cities. Bobby Kennedy was a strong propent of the Zones before his death, and Thatcher actually started in Britain in '79. The Moderate Nixon wasn't afraid to use Big Government Programs(or anyone to that matter) as means to an end. So inflation could be ridicuously out of control by the time of the '76 election.
August 29th, 2009, 06:05 PM
Mrs. Thatcher, Robert Kennedy, and Nixon in ideological agreement on housing. Triple Entente of Enterprise! :):) Now you understand what Clinton meant when he said that RFK was the first New Dem...
August 30th, 2009, 09:14 AM
Nixon was fairly liberal on domestic policies (his advisor on the issues was, after all, Daniel Patrick Moynihan).
That invariably means he'd lean towards lower unemployment over lower inflation. Although wage&price controls don't particularly work, it's possible he would have expanded them.
Potentially Nixon may have tried to pass an (indexed-to-inflation, as he'd previously indexed SS to inflation) guaranteed annual income as part of a second attempt that included say the GAI + healthcare insurance in return for the elimination of welfare and Medicare (but, presumably, not Medicaid as Nixon's health insurance was via employers). It would be a tricky deal, but an interesting one for both sides. If Nixon did well in '74, Kennedy and the Senate might well have agreed.
That wouldn't help in the short-term, of course.
I doubt Nixon would have allowed the Fed to cause a recession to bring inflation down.
He might, however, have indexed the minimum wage to inflation. His only purpose with domestic programs was to keep his popularity high enough to have a free hand in foreign affairs. That would be highly popular, no matter how business might scream (Walmart, for instance, is a case study in Southern Businesses and their ways to get out of paying a real wage).
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