Looking for relief from inflation? History taught us this isn't the remedy
Description
Imagine if the inflationary pressures forcing restaurants to hike menu prices were halted with the swipe of a pen. As far-fetched as that might sound, a government-directed halt to all cost increases was tried once, roughly 50 years ago. And the results didn’t exactly meet expectations. There’s a reason the move was known as the Nixon Shock.
That’s Nixon as in Richard Nixon, the president whose name is now synonymous with abuse of power. Although his forte was foreign affairs, the Republican bet he could take domestic action that would ensure re-election in 1972. So he used an executive order to freeze all prices and wages. His ridiculous fear of losing was also why the White House sanctioned a break-in at Democratic headquarters housed in an upscale mixed-use complex called Watergate.
Both moves were disasters. The fallout from Watergate continues to shape politics today. But the effect of the price and wage freezes is largely forgotten. Learn why that’s the case in this week’s edition of our retro-focused podcast, Restaurant Rewind.
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