Political commentator Jeff Greenfield has an excellent column on the Politico website about the effect of inflation on presidents and politics.
It’s no surprise that the effect is extremely damaging to incumbents. Persistent inflation from 1971 to 1982 encouraged voters to remove two presidents, Gerald Ford and Jimmy Carter, from office. There were indeed other reasons that both incumbents lost — Ford in 1976, Carter four years later — but years of rising prices clearly took their toll.
Inflation has been extremely tame in the United States for most of the past three decades. But recent statistics are not good news for the Democratic Party, which controls both the White House and Congress.
Prices are up 6% from a year ago, and Greenfield noted that President Biden says getting prices under control is a priority. But decades of history says there are very few things that presidents can do about rising prices.
“Inflation has a unique power to kneecap a presidency,” he wrote. “Incumbent presidents and their parties do not do well at all when inflation (and attempts to cure it) are on voters’ minds come election time. ...
“If that’s not enough to unsettle the White House and its allies, consider this: Presidents have almost no power to ease the pain of inflation, and the voting public cuts presidents no slack at all because of that impotence.”
He’s right. In the 1970s, three presidents tried various things to cool rising prices but failed. In 1971, Richard Nixon got Congress to impose a 90-day freeze on wages and prices. It worked for about 90 days; prices rose again as soon as the freeze thawed.
In 1974, Ford coined the term Whip Inflation Now, and even gave out millions of souvenir buttons that said “WIN.” Unfortunately, WIN lost.
In the late 1970s, Carter responded to five years of sharply higher oil prices by requiring businesses to raise thermostats to reduce energy use. But by 1980, when he was running for re-election, inflation hit 13%.
In the end, ironically, it was Carter who made the decision that applied the only provable remedy to rising prices. He appointed Paul Volcker as chairman of the Federal Reserve, and in 1980 the Fed raised interest rates as high as 21% to force cutbacks in borrowing.
It worked — at the cost of a nasty recession in the early 1980s and the loss of 4 million jobs. But by 1984, unemployment had come down and inflation was below 4% for the first time in a while. It set the stage for a long period of stable prices, to the point that no one today 45 or younger can recall an inflationary economy.
Biden and his advisors believe that inflation will come down in 2022 as supply chains return to normal. But they predicted the same thing would happen this year. So far, no luck.
As Greenfield noted, we are a long way from the high inflation of the 1980s. But inaction runs the risk of even higher prices. No doubt the Federal Reserve is paying close attention.
— Jack Ryan, Enterprise-Journal
