Whereas Archie and Edith said "Mr. we could use a man like Herbert Hoover again" I paraphrase this as "Mr. we could use a man like Richard Nixon again." The irony is that at the time liberals hated Nixon, he was the epitome of conservative reaction. And actually Nixon, who was President at the time the show first aired, was Archie's man. Arch and the neighbor woman, Irene, who was good friends with Edith but of course Archie hated her had once had yet another fight and Archie suddenly declared, "Franklin Delano Roosevelt."
Irene for a moment turned pale, "You promised never to mention the name of my favorite President! Just for that I'll show you: Richard Milhaus Nixon."
"How dare you?!" Arch exclaimed.
So how could it be that a liberal can miss Tricky Dick? The vantage point of time . Since then we have suffered through 12 years of Reagan and 8 years of Dubyah Bush. Partly it's because anything seems better than Reagan-Bush by comparison. Partly it's just that policy wise the more we look back the more it becomes clear why so many on the Left have said that Nixon was the last liberal.
Think about it: he instituted wage-price controls, started affirmative action, the Environmental Protection Agency; during his presidency the draft ended and the voting age was dropped to 18. And it was he who declared we are all Keynesians now.
Bruce Bartlett at his blog had the youtube video of when Nixon came out with the wage-price freeze-and at the same time ended Bretton Woods.
http://capitalgainsandgames.com/blog/bruce-bartlett/2344/nixons-biggest-gamble-40-years-ago-today
According to Bartlett-who of course as a long time insider to Republican insiders is a good person to ask about this-Nixon actually did this as a purely political move. He was concerned about the 1972 election. The trouble is that the inflation rate had was soaring-had stated rising sharply in 1967-and he had Milton Friedman talking his ear off about how this was a monstrosity. But he feared that normal method for lowering inflation-where the Fed simply raised interest rates-would sharply slow down the economy maybe into recession. So for him the wage-price freeze was the safer (political) option.
It certainly did pay off politically:
"By and large, reaction to Nixon’s “New Economic Policy” was positive, especially among Democrats. Senate Majority Leader Mike Mansfield said he was “delighted.” Senator George McGovern said wage and price controls were “four years overdue.” Senator William Proxmire said, “The president has not only changed his game plan, but he has also reversed his field. I support his program.” Economist Arthur Okun, who chaired the CEA under Johnson, called the Nixon plan “a leap forward into realism.” The stock market recorded one of its best days in history on the following Monday."
Even McGovern his eventual foil in the 72 landslide liked the move. The next campaign wasn't the only reason for Nixon's huge gamble -though with him it was always the biggest:
"Another concern was that the international monetary system was falling apart. Established at Bretton Woods in the aftermath of World War II, its foundation was having the dollar convertible to gold at $35 per ounce, with other currencies fixed to the dollar. But inflation was putting severe pressure on the exchange rate system and for 10 years American presidents had been fending off European demands to trade their dollars for our gold."
"In mid-August, 1971, a crisis arose when Great Britain demanded $3 billion worth of gold (worth $150 billion at today’s gold price). This led Nixon to call a special meeting of his economic advisers at Camp David on Friday, August 13."
At first they did work at least in terms of taming inflation: "The Consumer Price Index only rose 4.4 percent in 1971 – 1.3 percent less than the year before – and 3.1 percent in 1972. But as the controls were phased-out, inflation caught up with its underlying trend and rose 6.2 percent in 1973 and a shocking 11 percent in 1974. A key contributor was a big increase in the price of oil that the OPEC demanded to compensate its members for the steep fall in the dollar after 1971."
"Although the policies announced on August 15, 1971, undoubtedly helped Nixon politically – he won an overwhelming victory in 1972 – they also undermined his position when their long-term consequences became evident. Catch-up inflation made that problem worse, forcing the Fed to sharply tighten monetary policy, which brought on a severe recession in 1974. This weakened Nixon politically when the Watergate scandal broke. He later told journalist Jude Wanniski that he thought he would have weathered it if the economy had been stronger."
For further reading on the very interesting subject of Nixon's economic policy see "Nixon's Economy: Booms, Busts, Dollars, and Votes." by Allen J. Matusow
Overall, that whole period of economic history tends to interest me-the Carter years as well, right through the 70s till the Misfortune occurred: the election of Reagan...
Largely because while the inflation hawks are always invoking the 70s as a cautionary tale for too much fiscal and monetary stimulus-for a recent example, on Friday there was a story of the commodity trader Jim Rogers warning of a "stagflation" -
For my piece on this please see http://diaryofarepublicanhater.blogspot.com/2011/10/jim-rogers-doubles-down-on-stagflation.html -
The 70s could not possibly be a more different economic environment than today. As Bartlett observes on a piece about the Reagan tax cuts-he argues that they were the right policy then but not now because the environment at the end of the 70s was so different:
"It’s important to remember that inflation was the central economic problem at the time Reagan endorsed the tax plan that had been developed in Congress by Congressman Jack Kemp of New York and Senator Bill Roth of Delaware, which proposed cutting the top income tax rate from 70 percent to 50 percent and the bottom rate from 14 percent to 10 percent."
"In 1979, the Fed began targeting the money supply, which brought on a recession in 1980. But inflation only fell to 12.5 percent. Continued tight money led to another recession in 1981 and 1982, which brought inflation down to 8.9 percent in 1981 and 3.8 percent in both 1982 and 1983. Ironically, this much more rapid improvement in inflation contributed heavily to the budgetary cost of the Reagan tax cut. Since taxes are assessed on nominal incomes and tax indexing didn’t start until 1985, the sharp fall of inflation shrank the tax base and increased the tax cut’s revenue loss"
"Today, by contrast, income tax rates are at a historical low – the top tax rate is just 35 percent and revenues are less than 15 percent gross domestic product versus 19.6 percent in 1981. The average federal income tax rate on a median family is less than 5 percent and its marginal rate is 15 percent. Inflation is nonexistent and the federal funds rate is close to zero."
"Therefore, there is no possibility of replicating the experience of the early 1980s because economic and financial conditions now are virtually 180 degrees opposite from what they were then." http://capitalgainsandgames.com/blog/bruce-bartlett/2343/why-reagan-tax-cut-worked-1981-and-why-it-wouldn%E2%80%99t-work-todayhttp://capitalgainsandgames.com/blog/bruce-bartlett/2343/why-reagan-tax-cut-worked-1981-and-why-it-wouldn%E2%80%99t-work-today
In this very intersting passage he makes a point that is important to remember-the collapse of inflation took out any cushion the government budget might have had for the tax cuts.
Why these warm thoughts of Nixon? Maybe it's because as Bartlett says, "Perhaps the main long-term impact of Nixon’s 1971 policy was to discourage future presidents from acting aggressively and unilaterally on domestic issues. That may be one reason why Barack Obama resisted using the 14th Amendment to counter Republican extortion on the debt limit, as I believe he should have, and seems incapable of coming up with anything remotely bold to deal with the continuing economic crisis."
I mentioned above that the economic history of the 70s interests me because it is so much different than today-there were problems but the problems were so different. The companion book to read with "Nixon's Economy" is "Jimmy Carter's Economy: Policy in an Age of Limits." by W. Carl Biven
See, that says it all: an age of limits. I don't like limits. It started even before Reagan with Carter. A Democrat who respected limits. See that's conservatism in a nutshell: you've got to respect limits. So as Bartlett says we have had no bold economic action since Nixon.
So the idea of bold economic leadership just seems like a thing of the past today. Even temperamentally I don't hate Nixon the way I hated Reagan and Bush the II-again speaking temperamentally I prefer Bush the I a great deal to the Son; the trouble with Bush Sr. is that he was weak and so ran as Reagan's third term; instinctively though he was much preferable to either Reagan or his son. His weakness made him deny his instincts that was his character defect.
Reagan and Bush the II after him were True Believers actually. Nixon on the other hand was a cynic. Even George Prescott Bush was not a True Believer-part of what hurt him was he could never play the fundamentalist game the way Reagan did, but that's because Reagan was a believer. I hate true believers. This no doubt will sound counter-intuitive to many but understand: just because someone's a True Believer doesn't mean he's more honest. Indeed nobody made more factual misstatements than Reagan and Bush II.
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