As I heard Vice President Harris outline her plans to combat price gouging, I realized that many of our fellow citizens may be too young to remember our American experiment in price control in 1971. I remember it well, because I was swept up in its effects.
President Nixon attempted to combat inflation and high prices with a national price control program in August 1971. It also controlled retail prices, rents, and wage increases.
In my case, there were two immediate negative consequences:
My employer had granted me a planned pay rise, but they told me that because of these new controls, they could not approve the original planned increase. At the same time, however, my rent went up because my landlord said the increase had already been planned. How did this contradictory result come about? The price control program included procedures and created its own new bureaucratic system, including the Cost of Living Council (CLC) and the Economic Stabilization Board (ESB). These bodies began issuing judgments and declarations, and if an affected party had the means to work through these judgments or formally appeal to one of these bodies, an exception or exclusion could be made. So the landlord worked his way through the system and his planned rent increase was approved, but my planned pay increase fell victim to the controls. I did not have a large law firm to research judgments, draft a petition, or write appeals to the ESB or CLC.
Others like me also experienced rising costs but no revenue. These were difficult times. Soon, there were also shortages in stores and empty shelves. Why? Because manufacturers and grocers saw rising shipping and other costs, but the prices they could charge for their goods generally stayed the same. So instead of stockpiling and selling, losing money on each sale, they simply didn’t order anything. It was hard to find the items they needed. Gasoline shortages led to long waits at gas stations.
Eventually the Nixon administration abandoned the plan and it was rescinded. Prices, as I recall, shot up as soon as the goods became available.
I suspect that seniors like me – voters in their 70s – will remember those days as I do. Hopefully we won’t repeat that failed experience under a new administration.
Thomas Stindt lives in Northridge, California. His family has been visiting the Reno area for two generations. He is an Army veteran and retired attorney who has been a volunteer police officer for the past eight years.
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