This Sunday will mark 50 years since President Richard Nixon ushered in a new era of government control.
On August 15th, 1971, the then-President announced a plan for a “New Economic Policy.” This included executive orders for 10% surcharges on imported goods and freezes on wages and prices. Worst of all, it ended the liquidity between U.S. gold and U.S. dollars.
With the sweep of a pen, one man forced government control over free enterprise and brought us into the era of fiat money.
To put this “inflation-fighting” policy into perspective, consider a few common expenses the year these policies were enacted vs. today.
A cheeseburger in 1971 cost $0.30. Today, it costs an average of $2.50.
The average car cost $2,700 in 1971. Now, it’s closer to $40,000.
The median cost for a home in 1971 was $25,200. Today, it’s around $300,000.
Or, to put it simply… $100 back then is worth $675 today.
If the goal was to ease inflation, I’d venture to call this “New Economic Plan” a failure. It’s no wonder these policies are now referred to as the “Nixon shock.” They were a haphazard attempt to exert control over the economy and backfired miserably.
Looking back now, you’d think that people would have been outraged when this big plan to control our money was announced…But it was actually quite well-received.
Politically, the move proved a huge success. By and large, it bolstered public faith in the President as a strong leader who was willing to take risks and wield power… But not everybody felt that way.
In a column in the New York Times the following month, Murray Rothbard unleashed an impressive tirade against Nixon’s attempt to control the flow of money:
“On Aug. 15, 1971, fascism came to America. And everyone cheered, hailing the fact that a “strong President” was once again at the helm. The word fascism is scarcely an exaggeration to describe the New Economic Policy. The trend had been there for years, in the encroachment of Big Government over all aspects of the economy and society, in growing taxes, subsidies, and controls, and in the shift of economic decision-making from the free market to the Federal Government…
But the wage-price freeze, imposed in sudden hysteria on Aug. 15, spells the end of the free price system and therefore of the entire system of free enterprise and free markets that have been the heart of the American economy. The main horror of the wage-price freeze is that this is totalitarianism and nobody seems to care…
The worst part of our leap into fascism is that no one and no group, left, right, or center, Democrat or Republican, businessman, journalist or economic, has attacked the principle of the move itself. The unions and the Democrats are only concerned that the policy wasn’t total enough, that it didn’t cover interest and profits. The ranks of business seem to have completely forgotten all their old rhetoric about free enterprise and the free price system; indeed, The Washington Post reported that the mood of business and banks is “almost euphoric.”…
The conservatives, too, seem to have forgotten their free enterprise rhetoric and are willing to join in the patriotic hoopla. The New Left and the practitioners of the New Politics seem to have forgotten all their rhetoric about the evils of central control…”
There’s plenty to unpack (and enjoy) about this furious column. And if this is your first introduction to Rothbard, I strongly encourage you to read his work: it’s full of equally spicy tirades against big-government controls.
But I want to focus on one particular element of his response: the use of the term “fascism.”
The modern left just loves to cry fascism. So much so, the militant group Antifa (which is supposed to be short for anti-fascist) has sprung up in every major city in the country. They smash Apple stores and graffiti federal courthouses, all in the name of bringing down “fascism.”
But, in reality, our government is fascist in far more subtle ways. It oppresses us through methods that don’t always make the evening news, trend on Twitter, or cause mass protests.
The government devalues our savings, plunders our money through taxes, then spends that money on doomed-to-fail government programs. And most recently, it even shuts down entire industries and economies for fear of a virus… While printing trillions in “stimulus” money. It’s bleak, to say the least.
And until more people start actually learning about sound money instead of smashing out windows and screaming “fascism,” it’s not going to get any better.
Fortunately, that’s still a possibility. And it can be as simple as picking up a book.
If you’d like to teach your children about how the Federal government manipulates us through our money, I recommend starting with our third children’s book, The Tuttle Twins and the Creature From Jekyll Island.
This book is a kid-friendly version of G. Edward Griffin’s classic treatise on government and money. And as you read through it with your children, you might just learn a thing or two!
It’s never too late for us to start caring, learning, and fighting back against government control over our lives.
People may have fallen for the “Nixon shock” back in the day, and they may be falling for Joe Biden’s “American Rescue Plan” right now… but that doesn’t mean we can’t save the future. So let’s get to reading.
Until next time…