Nixon economy

What was the primary focus of "Nixonomics" when Nixon took office, and what was the inflation rate he inherited?

The primary focus was controlling inflation, which had already reached 5% by the time Lyndon Johnson left office.

Why did Nixon push out long-serving Federal Reserve Chairman William McChesney Martin in 1970?

He feared McChesney Martin's strategy of limiting the monetary supply to fight inflation would trigger an economic recession.

Who replaced McChesney Martin as Federal Reserve Chairman, and how did Nixon influence him?

Arthur Burns replaced him, and Nixon exercised heavy control over him, ordering him to ensure easy credit to help Nixon win the 1972 election.

How did Nixon respond to Arthur Burns' warnings that his policies were harming the economy?

He dismissed the warnings and threatened to reduce the institutional power of the Federal Reserve.

What did the 1970 Economic Stabilization Act give the president the power to do?

It gave the president the executive power to implement direct wage and price controls to fight inflation.

What dramatic action did Nixon take in 1971 using the Economic Stabilization Act?

He signed an executive order creating a 90-day national wage freeze, the first use of wage freezes since the Korean War.

What was the "Nixon Shock" of 1971?

Nixon disconnected the US dollar from the value of gold, ending the international Bretton Woods System in an attempt to control inflation.

How did the stock market immediately react to the announcement of the Nixon Shock?

The stock market recorded its largest single-day gain at the time, with the Dow Jones Index surging by 33 points.

What was the 1971 Smithsonian Agreement?

A provisional exchange rate agreement put into place between major economies following the initial Nixon Shock.

What major change happened to the US dollar from 1973 onwards, and what did it mean for inflation control?

The dollar became a permanently floating currency, meaning the government could no longer directly manipulate its value to fight inflation.

What global crisis in 1973 devastated Nixon's efforts to control American inflation?

The 1973 Oil Embargo, where Arab nations led by Saudi Arabia hiked oil prices for countries supporting Israel in the Yom Kippur War.

By how much did the price of a barrel of oil increase by 1974 due to the embargo?

The price of a barrel of oil skyrocketed by 300%.

What is "stagflation," and what caused it to grip the US economy in the 1970s?

A toxic economic combination of high inflation and economic stagnation, which was fueled heavily by the 1973 Oil Embargo.

What was the US inflation rate by the time Nixon resigned from office in 1974?

Driven largely by the energy crisis, inflation had peaked at 12%.

What political toll did a 6% unemployment rate take on Nixon's party in the 1970 midterm elections?

The high unemployment rate cost the Republican Party 11 seats in the House of Representatives.

How did Nixon break with traditional Republican fiscal policy in 1971 to combat unemployment?

He ran a massive $26 billion budget deficit to fund federal spending and minimize job losses.

How severe was the 1973–1975 recession, and how many jobs were lost under Nixon?

It was the worst recession the US had experienced since the Great Depression of the 1930s, resulting in 2.3 million lost jobs.

What was the national unemployment rate by the time of Nixon's resignation in 1974?

Unemployment had climbed to 7%.