News about the potential for a continuing increase in inflation in the coming months has sounded an alarm for many people. Supply chain disruptions and other factors due to the Covid-19 pandemic are the likely suspects for what has, in practicality, meant a five percent rise in the cost of goods and services to consumers and manufacturers alike. Some economists are calling these increases temporary, while others are not so sure. Dealing with inflation is nothing new to boomers, since we lived through one of the most volatile decades in our country’s economic history.
The decade of 1970 to ’79 saw an inflation rate of 7.25 percent, the worst since 1900. Compare that with a rate of 1.8 percent in the 1950s, and 2.45 percent in the 1960s. So what happened in the 1970’s to cause such a jump in inflation? A mix of world events and domestic political mayhem caused prices to go up, and interest rates to rise to an unprecedented level of up to 20 percent.
Richard Nixon was president, and still dealing with the process of ending the war in Vietnam, when in October of 1973 he asked Congress for $2.2 billion dollars in emergency aid for Israel following the Yom Kippur War. The Organization of Petroleum Exporting Countries (OPEC) responded with an oil embargo against all western countries that supported Israel. Overnight, oil became scarce as OPEC shut down all exports to the U.S., Netherlands and Denmark. The U.S. imported about 30-35 percent of its crude oil at that time. The Federal government asked Americans to conserve energy as much as possible, as prices practically doubled and gas rationing was instituted in every state.
The price of manufacturing was already on the rise in the country before the embargo, and Nixon had the Watergate scandal growing ever more, to the point that it ultimately brought down his presidency. In August of 1974, Nixon resigned and Vice President Gerald Ford became president. By that point, Egypt and Israel had agreed to a cease-fire and the oil embargo was lifted. It did not stop the rising inflation in the U.S.
On October 8, 1974, President Gerald Ford addressed Congress and proposed a grassroots campaign called “Whip Inflation Now.” The president asked Americans to come together to save more, practice disciplined spending and conserve energy, instead of instituting policies of government intervention to restrict prices. This included suggestions for carpooling and driving less, turning down thermostats and starting a vegetable garden. To get the American public excited about his program, Whip Inflation Now merchandise was produced, from t-shirts to sweaters; footballs to gym bags; watches to earrings; and pins to buttons.
People who pledged to support the voluntary measures were encouraged to wear a WIN button. The public campaign was doomed from the start as people began wearing the buttons upside down to to spell NIM, which was meant to stand for “No Immediate Miracles,” or “Need Immediate Money.” Alan Greenspan, the Chairman of Economic Advisors at the time and initially, but reluctantly, onboard, called the idea “…unbelievably stupid.” Ford’s program was a flop with the public.
Mister Boomer has a WIN button somewhere in his boxes of memorabilia. His looks just like the one pictured. Mister B can’t remember how he got the button, though he knows someone gave it to him. He did not sign any loyalty pledge of support, which were available through local newspapers. Signing the pledge and mailing it to Washington would garner the sender a WIN button in return.
Inflation in the 1970s hit home for Mister Boomer through more than gas rationing and the rise of oil prices. In the mid-70s, he purchased his first new car, and found the interest rate on his auto loan at more than 12 percent. Amid the resulting recession, boomers learned to tighten their belts and make do, as their parents had done during the war.
Did you have any Whip Inflation Now merchandise or a WIN button, boomers?