Booms, Busts, Dollars, and Votes
Sales Date: April 24, 1998
336 Pages, 6.00 x 9.00 in
- Published: April 1998
Though Richard Nixon came to office preoccupied with foreign policy, he soon had to grapple with an economy that threatened him with political defeat. Following the advice of Milton Friedman, the president placed his initial hopes for good times in the economics of caution. But when the economy dipped into recession and cost the Republicans victory in the Congressional election of 1970, Nixon turned for rescue not to his economists, but to a politician, the former Democratic governor of Texas, John Connally, who became Secretary of the Treasury midway through the first term.
“I can play it round, I can play it flat, just tell me how to play it,” Connally liked to say. Together, Connally and Nixon set out to save Nixon’s presidency by any means necessary. In a televised speech on August 15, 1971, Nixon stunned the world and reversed his political fortunes by announcing a series of measures that contradicted everything he was supposed to believe in—wage and price controls, abandonment of the international gold standard, depreciation of the dollar, and deficit spending. “This will put the Democrats in a hell of a spot, this whole speech,” the president exulted. He was right. The economy took off in 1972. Nixon took the credit. And his reelection by a landslide was assured.
Historian Allen J. Matusow now presents the first comprehensive history of Nixon's political economy. He depicts a president who disliked the subject but was forced to pay attention or lose his dream of effecting a historic realignment of the political parties in America. The study derives its authority from extensive archival research in Nixon’s presidential papers, including notes by Haldeman and Ehrlichman of crucial conversations in the Oval Office. Matusow shows the poverty of contemporary economic theory, Nixon’s willingness to sacrifice the world economy for his domestic political purposes, and his desperate attempts to find something, anything, that might work. Lurching from one set of policies to another, Matusow argues, Nixon achieved only illusory successes that ultimately brought on a decade of economic disaster.
Nixon’s Economy will contribute significantly to the emerging reinterpretation of a pivotal presidency. For scholars of the era the book will be required reading. For students and general readers, it will help explain in lucid prose the politics and economics of our own time. Narrative history that tells a good story, this book will reveal yet another Nixon, while offering a compelling case history of how politicians shape and sometimes mis-shape the performance of the American economy.
"Matusow’s monograph is an incisive analysis of a little-known aspect of the Nixon years."—Washington Post
"A very readable and insightful study of a critical period in American economic history."—Wall Street Journal
"Matusow provides lucid accounts of such complicated issues as wage-and-price controls, dollar devaluation, demise of the gold standard, and the emergence of the global economy."—Library Journal
"Matusow’s important study of Richard M. Nixon’s economy fills a gap in the historical literature. A gracefully written work, it is replete with penetrating and often startling insights, sharp analysis, and impressive research, and it offers a fresh account of how economic policy was shaped in accordance with the political objectives of the Nixon presidency."—American Historical Review
"We shall not soon find an account of policy making in the White House that throws so much light on the way in which the thirty-seventh president of the United States conducted the country’s economic business—nor one that illuminates Mr. Nixon’s understanding and practice of politics—as Professor Matusow’s."—Journal of American History
"A fascinating book. Matusow writes very well and manages to make complicated economic ideas very clear. His portraits of major players such as Herbert Stein, John Connally, and George Shultz are extraordinarily shrewd. The result is a history of presidential mismanagement that reveals a great deal, not only about the Nixon years, but also about the formidable obstacles that block the making of well-informed and coherent federal economic policy."—James T. Patterson, author of Grand Expectations: The United States, 1945–1974
"An important and stimulating book that contributes substantially to the ongoing reinterpretation of Nixon’s presidency, vividly demonstrating how Nixon’s quest for a new majority animated and gave coherence to his economic policy choices."—Bruce J. Schulman, author of Lyndon B. Johnson and American Liberalism
List of Abbreviations
1. Nixon and the Fed
2. The Fiscal Ironies of 1969
3. Election Year 1970
4. The Decline and Fall of Gradualism
5. Trade, Politics, and the New Mercantilism
6. Camp David
7. Election Year 1972
8. The Great Inflation
9. Oil Shock
10. The Great Recession