All the talk of renewed inflation brought back some terrible memories for me, and I wrote about them at New York:
When I was a freshman college debater at Emory University in the fall of 1970, the national debate topic was not Vietnam, but the desirability of wage and price controls. Little did we know that just months ahead a Republican president would impose a wage-price freeze, long the anti-inflationary prescription of the left wing of the Democratic Party. But the surprise known in financial circles as the “Nixon shock,” nearly a half-century ago (on August 15, 1971) showed how pervasive the fear of inflation — running at just over 5 percent in 1970 — had become.
That’s ancient history now, even to those of us who remember the double-digit inflation of the late 1970s, and the particularly horrid scourge of “stagflation” (high inflation and unemployment simultaneously). Inflation seems to have been tamed by wise monetary policies. The periodic warnings from 21st-century conservatives that low interest rates and federal budget deficits would create inflation didn’t much bother me. It was like hearing an old priest chant a forgotten litany in a lost language — just one among many ritualistic arguments for the tight credit and reactionary social policies these people favored instinctively as a sort of class self-defense posture.
The
current surge in consumer prices doesn’t necessarily change that picture; the current post-pandemic (we hope) economic environment was sure to produce a spike in wages and prices that cannot be projected into a future where something approaching normalcy will surely return (though the real-estate bubble is indeed troubling). But now I am beginning to hear echoes of the inflation panics of the not-so-distant past, which make me tremble.
Like Tim Noah, I suspect there may be a generational lapse in understanding the politics of inflation:
“I don’t care to be condescended to by a bunch of Gen Xers and Millennials about my ’70s-bred fear of inflation. It feels too much like the condescension we Boomers directed toward Depression babies whenever they warned us that we were playing with fire in deregulating the financial markets. Poor dears, we thought, traumatized for life by the 1929 crash and one-third of a nation ill-housed, ill-clad, ill-nourished.
“The Depression babies turned out to be right, of course.”
Noah makes it clear he’s not arguing inflation per se is bad for the economy. It is, however, bad for progressive politics, and not just because “stagflation” probably killed the Carter presidency and ushered in the Reagan era far more than the Iranian hostage crisis or other better-remembered Democratic foibles. The deflationary economic strategies of the 1980s weren’t called “austerity,” but rather a corrective for undisciplined policies that fed wage and price spirals which in turned hammered the value of savings, the living standards of those on fixed incomes, and the political case for federal domestic spending.
Most lethally for progressivism, the conservative supply-side tax-cutting when combined with inflationary fears can create enormous pressure for public disinvestment and the shredding of safety nets (which is why reactionaries happily labeled the intended result “starving the beast”). We are still living with some of the long-term consequences of anti-inflationary backlash. As Noah points out, California’s Proposition 13 ballot initiative in 1978 and similar “tax revolts” were a by-product of price spirals that boosted tax assessments on property and income alike.
But sometimes lost in an examination of the right’s exploitation of inflation fears is the abiding fact that the left has no clear prescription for dealing with it, either, other than by denying its existence or significance (sometimes rightly, sometimes wrongly). Ironically, that was made most evident by the supposedly illiberal Richard Nixon’s surprising use of the great liberal instrument for taming inflation.
The veteran ex-conservative economic and political analyst Bruce Bartlett has penned an exceptional explainer on the background and consequences of the “Nixon shock,” particularly its international dimensions, and the role played by Treasury Secretary John Connally, who like his boss and ally Nixon was more focused on short-term politics than on long-term economic realities. What’s clear is that Nixon was convinced a recession induced by the Eisenhower administration and its Federal Reserve Board appointees designed to kill inflationary pressures also killed his 1960 presidential candidacy. As prices spiked in 1970, he was terrified the same thing could happen in 1972.
Nixon had inherited (and temporarily extended) an income-tax surcharge from LBJ that was designed to pay for the skyrocketing costs of the Vietnam War, but its effects were limited. So with his signature televised bombshell reveal (the one he deployed a month earlier to announce his trip to China), amid great secrecy, Nixon rolled out a combo platter of initiatives to fight inflation and international economic instability. They included a suspension of fixed currency exchange rates and the convertibility of the dollar to gold (to head off a raid on gold supplies triggered by a British demand for a major conversion); an import surcharge (to prevent a worsening of the trade balance); and most significantly for most Americans, a 90-day freeze on wages and prices to be followed by an indefinite period of controls by federal panels.
As political theater, Nixon’s speech announcing a “new economic policy” was, well, Nixonian. He began with dessert: an assortment of tax breaks and job-creation incentives balanced by mostly unspecified spending cuts; only then did he mention the wage-price freeze. After promising to “break the vicious circle of spiraling prices and costs,” Nixon moved on to his international proposals, which he downplayed as “very technical,” while assuring viewers that “if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.”
Nixon’s wage and price controls were initially very popular (as polls had told the White House they would be) and did indeed hold down inflation through the reelection year of 1972, when Nixon won his famous landslide reelection over poor George McGovern, in part by goosing federal appropriations to create a mini-boom. By then the administration had moved on to a more discretionary system for regulating wage and price increases, which generated rumors of employers currying favor with generous donations to CREEP (the Committee to Reelect the President), the notoriously corrupt operation heavily complicit in the Watergate scandals that brought down the Nixon presidency. Between the suppressed and eventually unleashed inflationary pressures and the oil-price shock Nixon’s international economic policies helped create, the country paid a very high economic price for the brief respite from inflation the wage-price freeze earned him. He sowed the wind with even greater inflation, and his successors Gerald Ford (whose feckless “Whip Inflation Now” campaign was widely mocked) and Jimmy Carter reaped the whirlwind.
Before you dismiss these events from 50 years ago as irrelevant, consider how much Nixon’s short-sighted approach sounds like something President Donald Trump might have done if inflation had became a political problem during his tenure (or in, God help us, a future term). Indeed, any president mulling Nixon’s choice of recession-inducing fiscal or monetary policies might be tempted to resort to the easy-to-understand, if dangerous, strategy of wage and price controls in which the pain is mostly back-loaded, particularly in or near an election year. Old folks remember how it preceded Nixon’s landslide 1972 win, followed by a decade of economic pain and multiple decades of political misery for progressives.
Here’s the problem as I see it. I believe impeachment is doable although by no means a sure bet. It would no doubt be an almost completely partisan vote with defections on both sides but I think at the end, the “yeas” would prevail.
However, as many others have already pointed out, conviction in the Senate is another matter. Even if every single Democrat plus the two Independents who caucus with the Democrats were to vote to convict, unless they get some Republican votes, it’s not going to happen. I don’t know that the people clamoring loudest for impeachment understand that. I’m afraid they’ll see it as just another “DLC Repug-lite” cowardly sell-out even if all the Democrats (plus Leiberman and Sanders) vote for conviction.
I agree that from the partisan perspective of aggregating and holding power, impeachment may not be the best strategy. Undoubtedly, Rove is holding the revenge card up his sleeve that he’ll use in the media to brand Democrats petty children who are simply finding their opportunity to repay the GOP for their impeachment of Clinton. The MSM also undoubtedly would be gleeful in their punditry, ascribing all the motivations and reactions Gitlin outlines. But, isn’t such a partisan strategy just another aspect of the political cynicism by which voters are so repulsed?
However, impeachment should not and need not be about vengeance–whether as tit-for-tat vis-a-vis WJC, or for the actual victims of the crimes of the Bush White House. Rather, as John Nichols illuminates in The Nation (8/13/07) and echoing the sentiments of Bill Moyers panelists, “…the point of impeachment is not the transitory crimes of small men but the long-term definition of great offices. …the Founders intended impeachment less as a punishment for office-holders than as a protection against the dangerous expansion of executive authority. If abuse of the system of checks and balances, lies about war, approval of illegal spying and torture, signing statements that improperly arrogate legislative powers to the executive branch, schemes to punish political foes and refusals to cooperate with Congressional inquiries are not judged as high crimes, the next President, no matter from which party, will assume the authority to exercise some or all of these ilegitimate powers.” Indeed, the partisan temptation to do so will be great, even if just as a matter of righting the wrongs done by a previous administration.
So, the Congress has a solemn, non-partisan duty to our Constitution to execute an impeachment not only against Bush and Cheney, but also against any scoundrel, tyrant or demagogue that so abuses the powers of their offices and damages our Democracy. That the Democrats make up the majority of the Congress right now, it falls to them to muster the necessary support for those articles. But, it also falls to all MOGs to weigh the facts of these matters objectively and to acquit their Constitutional duty. To do otherwise–whether as a matter of winning elections or as a matter of partisan solidarity–is merely to succumb to political cynicism. Such may be considered complicity in the same crimes as those accused, since it is a withholding of the last instrument necessary in preserving our system of checks and balances–and in spite of Justice.
Perhaps, then, a national civics lesson is in order, a Prophylactic for the People against the inevitable slings and arrows of the MSM, screeching of vengeance and pettiness and disloyalty in “war time” like a chorus of so many howler monkeys, a cacophony of “sound and fury, signifying nothing.”
Perhaps also, for this one action, all Democrats and any Republicans of conscience who would join them, should declare themselves Independents, making it clear to the People that this is an action of Our supreme legislative body performing its Constitutional duty.
Nichols concludes, “No matter how unsucessful we may think [Bush’s] tenure has been, it will leave a mark on the Republic. If that mark is of a presidency without limit or accountability, Bush and Cheney will have changed the country far more fundamentally than any of their predecessors.”
Here one is reminded of the legacy of Julius Caesar in the course of the Roman state. While the “noblest” Romans assassinated and buried Caesar, the fundamental mutation to tyranny that he wrought persevered. Republic became Empire. But, the Pax was a pox upon all houses. The brutality necessary for imperial rule spread from the reaches of empire back to mother Rome, where fear and poverty and oppression prevailed until the Fall.
Are we not already seeing these same signs as we enter upon a new era of imperial executive? Are our armies not already waging an unwinnable, unending war against a shadowy enemy of ideology? Are we not already refitting our society for the paranoia of an all-seeing eye? Have we not already succumbed to a politics of effete consent?
So, it is not enough to punish these mere men for their transgressions, though justice demands it and impeachment will accomplish it. Such ad hominem penalty is merely cutting a head from the hydra of imperialism, for another will grow back in its place. No, that imperial dragon must be slain. But it will take more than a partisan Brutus. It will take a People expressing their Will for the persistence of democratic self-governance through the only vehicle We have: the Congress. That vehicle is so much bigger in its Constitutional sense and its Democratic import than any political party. And ultimately, the members thereof must act in accordance with the Will of the People to restore balance and integrity to our great Nation.