..........Energize your mind...Obtain intelligent synergy here !!
Powered by MaxBlogPress 

1,124 views
« Can Aol Reinvent Itself To Thrive Another Optimistic Day
What If The Delegate Selection By Dems & Gop Was Identical? »

Feb

29

Stagflation Then And Now- Recounting Nixon’s Price Controls

Topic: Business, Government, Politics | Email Editor Email Editor |Print This Post Print This Post

Pownce it! Pownce it! Technorati icon






Hold on there - all you curious minds. Don’t be gullible and believe much of what the Bush Administration proclaims is true, especially about today’s StagFlation economy. Some factual history is in order.

Much of the G.W. Bush White House modus operandi as you know, is on par with Ghengis Khan and Attila The Hun for faithfulness and benefits or rewards to anyone other than themselves.

Review of the current American situation will end most of the typical muddled GOP controversy, we have all come to expect.

The conventional measure of inflation is the Consumer Price Index. (C.P.I.), Richard W. Fisher of the Federal Reserve Bank of Dallas, dissented from the Fed’s decision to lower rates by a half-point, arguing that he viewed upside risks to inflation as being greater than the downside risks to longer-term economic growth, according to the minutes.

There are two very different sides to the StagFlation remedies. Lowering interest rates are to stimulate growth on the “Market” side (investors). Controlling inflation is definitely on the consumer side. It is being closely watched who is going to get real assistance - the consumer or Wall Street investors.

Seasonally Adjusted C.P.I 

     Expenditure                                         Compound
      Category          Changes from preceding month      annual     Un-
                                                           rate    adjusted
                                                          3-mos.   12-mos.
                     July Aug. Sep. Oct. Nov. Dec. Jan.   ended     ended
                     2007 2007 2007 2007 2007 2007 2008 Jan. 2008 Jan. 2008              

 All items..........   .2   .0   .4   .3  1.0   .4   .4       7.7       4.6
  Food and beverages   .3   .5   .5   .2   .3   .1   .7       4.5       4.9
  Housing...........   .1   .0   .2   .3   .4   .2   .2       3.5       3.1
  Apparel...........   .5  -.2   .0   .1   .4   .2   .8       5.6        .5
  Transportation....   .3  -.6   .7   .3  3.8  1.1   .7      24.6      10.2
  Medical care......   .6   .5   .4   .5   .4   .3   .6       5.4       5.1
  Recreation........  -.1  -.1   .3   .2   .1   .1   .2       1.3        .7
  Education and
     communication..   .2   .3   .1   .3   .0   .2   .3       2.2       3.0
  Other goods and
     services.......   .2   .1   .4   .2   .2   .4   .5       4.5       3.4
 Special indexes:
  Energy............   .1 -1.8  1.4  1.1  7.2  1.8   .8      45.9      20.4
  Food..............   .3   .5   .5   .2   .3   .1   .7       4.6       5.0
  All items less
     food and energy   .2   .2   .2   .2   .2   .2   .3       3.1       2.4
Consumer Price Index data for February are scheduled for release on Friday,
March 14, 2008, at 8:30 A.M. (EDT).

When the C.I.P. numbers exceed 4.0 is when the consumer is feeling the inflation pinch, and when it is sustained above 4.0 is when there is much discomfort and personal budgets are pretty much getting devastated. So lets compare today’s stagflation period and the Nixon price controls era of the 70’s (post Vietnam War), in which for the most part the price controls did work, even though many economists readily admit that it was an experiment.

C.I.P. 1960 - 1980

President Richard Nixon imposed price controls on August 15, 1971. Nixon ran his re-election campaign on his anti-inflation polices (price controls), and easily won a landslide re-election in November of 1972 with a rebounding economy. This peace time price-control policy was unprecedented, but also favored by a majority of the American People at the time and some economists.

 

Nixon Imposes Wage-Price Freeze

 

The only prices not covered were those of unprocessed agricultural products at the farm levels, and rents. Nixon also ordered the Internal Revenue Service to immediately begin thorough audits of companies which had raised their prices more than 1-1/2 percent above the January ceiling.

 

The Cost of Living Council took up the job of running the controls. Food and energy drove inflation in the 70’s and it is driving inflation today !

The Senate Majority Leader Edmund Muskie during the Nixon Administration stated succinctly: “I don’t believe that the best way or the fairest way to stimulate the economy is a series of large tax breaks for industry which far exceed their ability to expand, and which will depend on benefits trickling down to the consumer.”

In the elusive and often convoluted metrics of economics, one of the most important factors is the straight-forward matter of the public confidence. Albert E. Sindlinger, a Vice President of the Gallup Poll organization during the 70’s summed it up nicely - “Economics isn’t chemistry. You can take any theory you’ve got. If people think it’s going to work, it will work. If they don’t, it won’t.”

It would NOT be a stretch of one’s imagination that there are many voters who elected G.W. Bush who now are greatly dissappointed and who also expected much more from our leader than a single focus (Iraq invasion/occupation),where the domestic economy and most importantly The American People are NOT given a priority over Wall Street investors. The motive behind the Bush Administration’s current economic stimulus is EXACTLY that the American consumer will recklessly spend the economy back to better health, instead of doing what is right and paying down their debt. Talk about a genuine roll of the dice by a modern day free world leader!

 

 

 

[Ask] [backflip] [del.icio.us] [Digg] [diigo] [DotNetKicks] [DropJack] [Facebook] [Fark] [Faves] [folkd.com] [Google] [Ma.gnolia] [Mister Wong] [Mixx] [MySpace] [Newsvine] [PlugIM] [Propeller]