another unsourced copy/paste shitpost
heres the whole "article" if you want context.
http://www.econreview.com/events/wageprice1971b.htm
Oh Im sorry. Here Letsw just do the whole article and see if it contradicts the first paragraph I posted
President Nixon Imposes Wage and Price Controls
August 15, 1971. In a move widely applauded by the public and a fair number
of (but by no means all) economists, President Nixon imposed wage and price
controls. The 90 day freeze was unprecedented in peacetime, but such drastic
measures were thought necessary. Inflation had been raging, exceeding 6%
briefly in 1970 and persisting above 4% in 1971. By the prevailing historical
standards, such inflation rates were thought to be completely intolerable.
The 90 day freeze turned into nearly 1,000 days of measures known as Phases
One, Two, Three, and Four. The initial attempt to dampen inflation by calming
inflationary expectations was a monumental failure.
In 1971, the U.S. was also in the process of leaving the gold standard, which
was intended to allow the value of the U.S. dollar to fall. Compounding the
situation were such events as Fed Chairman Arthur Burns and the Committee on
Interest and Dividends (part of the controls apparatus) strenuously opposing
banks attempting to raise the U.S. prime rate from 6% to 6.25% in February
1973. Inflation rates were below 4% at the start of 1973, but reached 9% by the
start of 1974, which would have made the real prime rate a negative 3%. At the
same time, interest rates were going up in foreign countries, putting enormous
pressure on the dollar.
The wage and price controls were mostly dismantled by April, 1974. By that
time, the U.S. inflation rate had reached double digits.
While there were skeptics in August, 1971, there were a great many who
thought "temporary" wage and price controls could cure inflation. By 1974, this
notion was thoroughly discredited, and attention gradually turned toward a
monetary approach to inflation. In a complete reversal, the policy to curb
inflation in now thought to be an increase in interest rates rather than an
attempt to hold them down.
Return
http://www.econreview.com/events/wageprice1971b.htm
