On this day in 1974, Gerald Ford delivered his "Whip Inflation Now" speech, before Congress.
Ford declared inflation "public enemy number one." At the time, the Consumer Price Index was climbing at an annual rate of 11.8%. The peak in price inflation wouldn't occur until April 1980, nearly 6 years later, when the annualizedCPI rate came in at 14.6%.
In his book The Age of Turbulence, Alan Greenspan as the Chairman of the Council of Economic Advisors captured the madness of the Whip Inflation Now campaign quite nicely:
I was horrified to learn how is White Hous staff planned to tackle the issue [inflation]. My first experience of policymaking in the Roosevelt Room of the White House almost sent me racing back to New York. It was a senior staff meeting at which the speechwriting department unveiled a campaign called Whip Inflation Now. WIN as they wanted it to be known ("Get it?" one asked), was a vast program that would involve a national voluntary price freeze, a summit conference in Washington in October to discuss inflation with preliminary task forces and minisummits all over the country, and many other features. The speech writers had ordered up many millions of Whip Inflation Now buttons, samples of which they handed out to us in the room. It was surreal. I was the only economist present, and I said to myself, This is unbelievable stupidity. What am I doing here?
Of course, Greenspan did not leave. The lure of power was just too great for him and so Murray Rothbard could write this years later:
Greenspan's real qualification is that he can be trusted never to rock the establishment's boat. He has long positioned himself in the very middle of the economic spectrum...
There is one thing, however, that makes Greenspan unique, and that sets him off from his Establishment buddies. And that is that he is a follower of Ayn Rand, and therefore "philosophically" believes in laissez-faire and even the gold standard. But as the New York Times and other important media hastened to assure us, Alan only believes in laissez-faire "on the high philosophical level." In practice, in the policies he advocates, he is a centrist like everyone else because he is a "pragmatist."
As an alleged "laissez-faire pragmatist," at no time in his prominent twenty-year career in politics has he ever advocated anything that even remotely smacks of laissez-faire, or even any approach toward it. For Greenspan, laissez-faire is not a lodestar, a standard, and a guide by which to set one's course; instead, it is simply a curiosity kept in the closet, totally divorced from his concrete policy conclusions.
Thus, Greenspan is only in favor of the gold standard if all conditions are right: if the budget is balanced, trade is free, inflation is licked, everyone has the right philosophy, etc. In the same way, he might say he only favors free trade if all conditions are right: if the budget is balanced, unions are weak, we have a gold standard, the right philosophy, etc. In short, never are one's "high philosophical principles" applied to one's actions. It becomes almost piquant for the Establishment to have this man in its camp.
Over the years, Greenspan has, for example, supported President Ford's imbecilic Whip Inflation Now buttons when he was Chairman of the Council of Economic Advisers.