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{{Short description|37th president of the United States (1969–74)}} | {{Short description|37th president of the United States (1969–74)}} | ||
{{redirect|Nixon|other uses|Nixon (disambiguation)|and|Richard Nixon (disambiguation)}} | {{redirect|Nixon|other uses|Nixon (disambiguation)|and|Richard Nixon (disambiguation)}} | ||
{{Use American English|date=February 2019}} | {{Use American English|date=February 2019}} | ||
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At the time Nixon took office in 1969, inflation was at 4.7 percent—its highest rate since the Korean War. The [[Great Society]] had been enacted under Johnson, which, together with the Vietnam War costs, was causing large budget deficits. Unemployment was low, but interest rates were at their highest in a century.{{sfn|Ambrose|1989|pp=225–226}} Nixon's major economic goal was to reduce inflation; the most obvious means of doing so was to end the war.{{sfn|Ambrose|1989|pp=225–226}} This could not be accomplished overnight, and the U.S. economy continued to struggle through 1970, contributing to a lackluster Republican performance in the midterm congressional elections (Democrats controlled both Houses of Congress throughout Nixon's presidency).{{sfn|Ambrose|1989|pp=431–432}} According to political economist Nigel Bowles in his 2011 study of Nixon's economic record, the new president did little to alter Johnson's policies through the first year of his presidency.{{r|Bowles-Small}} | At the time Nixon took office in 1969, inflation was at 4.7 percent—its highest rate since the Korean War. The [[Great Society]] had been enacted under Johnson, which, together with the Vietnam War costs, was causing large budget deficits. Unemployment was low, but interest rates were at their highest in a century.{{sfn|Ambrose|1989|pp=225–226}} Nixon's major economic goal was to reduce inflation; the most obvious means of doing so was to end the war.{{sfn|Ambrose|1989|pp=225–226}} This could not be accomplished overnight, and the U.S. economy continued to struggle through 1970, contributing to a lackluster Republican performance in the midterm congressional elections (Democrats controlled both Houses of Congress throughout Nixon's presidency).{{sfn|Ambrose|1989|pp=431–432}} According to political economist Nigel Bowles in his 2011 study of Nixon's economic record, the new president did little to alter Johnson's policies through the first year of his presidency.{{r|Bowles-Small}} | ||
Nixon was far more interested in foreign affairs than domestic policies, but he believed that voters tend to focus on their own financial condition and that economic conditions were a threat to his reelection. As part of his "[[New Federalism]]" views, he proposed grants to the states, but these proposals were for the most part lost in the congressional budget process. However, Nixon gained political credit for advocating them.{{sfn|Ambrose|1989|pp=431–432}} In 1970, Congress had granted the President the power to impose wage and price freezes, though the Democratic majorities, knowing Nixon had opposed such controls throughout his career, did not expect Nixon to actually use the authority.{{r|Bowles-Small}} With inflation unresolved by August 1971, and an election year looming, Nixon convened a summit of his economic advisers at [[Camp David]]. Nixon's options were to limit fiscal and monetary expansionist policies that reduced unemployment or end the dollar's fixed exchange rate; Nixon's dilemma has been cited as an example of the [[Impossible trinity]] in international economics.<ref name=":1">{{Cite book|last=Oatley|first=Thomas|url=https://books.google.com/books?id=4GJoDwAAQBAJ|title=International Political Economy: Sixth Edition|date=2019|publisher=Routledge|isbn=978-1-351-03464-7|pages= | Nixon was far more interested in foreign affairs than domestic policies, but he believed that voters tend to focus on their own financial condition and that economic conditions were a threat to his reelection. As part of his "[[New Federalism]]" views, he proposed grants to the states, but these proposals were for the most part lost in the congressional budget process. However, Nixon gained political credit for advocating them.{{sfn|Ambrose|1989|pp=431–432}} In 1970, Congress had granted the President the power to impose wage and price freezes, though the Democratic majorities, knowing Nixon had opposed such controls throughout his career, did not expect Nixon to actually use the authority.{{r|Bowles-Small}} With inflation unresolved by August 1971, and an election year looming, Nixon convened a summit of his economic advisers at [[Camp David]]. Nixon's options were to limit fiscal and monetary expansionist policies that reduced unemployment or end the dollar's fixed exchange rate; Nixon's dilemma has been cited as an example of the [[Impossible trinity]] in international economics.<ref name=":1">{{Cite book|last=Oatley|first=Thomas|url=https://books.google.com/books?id=4GJoDwAAQBAJ|title=International Political Economy: Sixth Edition|date=2019|publisher=Routledge|isbn=978-1-351-03464-7|pages=351–352|language=en}}</ref><ref>{{Cite web|last=Gowa|first=Joanne|date=1983|title=Closing the Gold Window: Domestic Politics and the End of Bretton Woods on JSTOR|url=https://www.jstor.org/stable/10.7591/j.ctvr7f40n|url-status=live|website=Cornell University Press|language=en|doi=10.7591/j.ctvr7f40n}}</ref> He then announced temporary wage and price controls, allowed the dollar to float against other currencies, and ended the convertibility of the dollar into gold.{{sfn|Aitken|pp=399–400}} Bowles points out, | ||
<blockquote>by identifying himself with a policy whose purpose was inflation's defeat, Nixon made it difficult for Democratic opponents ... to criticize him. His opponents could offer no alternative policy that was either plausible or believable since the one they favored was one they had designed but which the president had appropriated for himself.{{r|Bowles-Small}}</blockquote> | <blockquote>by identifying himself with a policy whose purpose was inflation's defeat, Nixon made it difficult for Democratic opponents ... to criticize him. His opponents could offer no alternative policy that was either plausible or believable since the one they favored was one they had designed but which the president had appropriated for himself.{{r|Bowles-Small}}</blockquote> | ||