Millenium Countdown: 1971
Paper: Nevada Appeal – 28 days to the millennium – Friday, Sept. 3, 1971
Owner: Donald W. Reynolds
General Manager: Jack D. King
Editor: John S. Miller
Advertising Manager: James Collins
Circulation Manager: Robert Goertz
Production Manager: Denis E. Shedd
Published Sunday through Friday at 102 S. Division Street.
A Nevada owned member Donrey Media Group.
Price controls, wage freeze take over economy
By Kelli Du Fresne
In early September 1971, Carsonites and all of the U.S. are under the control of the first phase of President Richard Nixon’s economic stabilization policies.
Beginning Aug. 15, wages and prices were frozen for 90 days at May 25, 1970, levels.
The plan was put into action in four phases and lasted until April 30, 1974.
Advertising was touting sales that fight inflation, which since the end of World War II had risen 207 percent, while wages had climbed between 40 and 60 percent.
Carson residents had mixed feelings and experiences with the price freeze, but several housewives were glad to see grocery prices going down. In an article, reporter Dan Borsuk wrote: In an Appeal survey, Carson City housewives indicated both approval and disapproval towards President Nixon’s wage-price freeze. Some housewives took impartial stands.
The women were asked what their opinions were in regards to the freeze and how it has affected their families.
“I don’t think that it’s fair,” commented Mrs. Elaine Houston. “Either there is one or there isn’t one. Some people can still get raises and company profits will climb.”
After considering how the freeze has affected her family, Mrs. Houston remarked, “We just moved up here. I don’t know how it’s going to affect us.”
“I think that it was a good policy because I think that the prices and wages are becoming too inflated,” said Mrs. Milton Brown.
“We made temporary savings on health insurance, which was a saving of about $70. I think that it’s good to freeze wages so that we can get an overall look at the whole salary schedule, that is out of balance. I think some men are making too much and others too little,” said Mrs. Brown.
The freeze will also allow the Browns to look around for a new automobile. “The automobile prices are frozen so we’re planning to buy a new car. We feel that we can save as much as $200 with prices frozen as they are.”
Mrs. Harold Ransford of Carson City also likes President Nixon’s wage-price policy. “I think that it is a wonderful idea. My husband is on a pension, but grocery prices keep going up so I think that it is a good idea to freeze prices.”
A Carson widow also thought that the freeze was good for grocery prices. “I think that it’s good. The prices of groceries should be stabilized.”
Mrs. Dorothy Baney had some reservations with the wage-price freeze. “I think that it’s fine as long as everyone goes by it,” she said. “If it doesn’t apply to everyone then it isn’t fair.”
Mrs. Baney said that she will not lower her rentals for winter rates.
“I go along with it,” Mrs. Paul Doyle remarked. “I think that something had to be done. Those unions are out of line.”
According to Mrs. Doyle, the freeze has not affected her or her husband, who is retired.
Mrs. Walton Deighton said “there are pros and cons. It hasn’t affected us in any way. Our economy is in some kind of mess so we have to start somewhere to correct it.”
“I think that it’s a good idea but I don’t see how it can last three months,” commented Mrs. Kim Barboutis. There have been no noticeable effects yet, said Mrs. Barboutis.
Martin Garry, of Minden, now a 71-year-old retired stockbroker, DJ and weightlifter, remembers the price freeze well.
“I remember that year well. That was the year I got sued,” he said. “Price control doesn’t work. You have to have a free market. Supply and demand controls the price. If you interfere with that natural thing, there’s no cure for it. You can’t take (price control) off.”
Garry said he had a client trading commodities, which is very risky. The prices were pretty good while the controls were on but once they took them off and prices went through the roof, he lost money.
Garry said the client tried to sell the commodity stocks, but in the early 1970s when commodity prices shifted more than a nickel, trading was locked.
Garry’s client lost his money and sued him for not selling the locked-out stocks.
“It was a two-week trial,” he said. “It took me more than three days to unravel all the lies he told. In the end 12 out of 12 jurors agreed he was lying. That’s my experience with price controls.
“When you put on price controls they don’t work. Where there’s a low price there’s no product. When the price controls are taken off, you have lots of product, but the price jumps.”
The Appeal ran the following editorial on the wage and price freeze the same day as the survey.
WASHINGTON (NEA) The open warfare between the Nixon administration and labor leaders like George Meany and Leonard Woodcock over the president’s wage-price freeze is very serious. In the developing combat, neither side has been wise in the use of rhetoric, tactics or argument.
Treasury secretary Connally erred in applying the word “malarkey” to labor’s objections. So did Labor secretary Hodgson when he said Meany was “out of step” with the union rank and file.
Meany lost his cool in trying to belittle Hodgson by calling him a janitor, thereby seeming to insult thousands of unionized janitors. Woodcock’s stuff about Nixon having the hand that “wielded the dagger” against labor bore the marks of a juvenile tantrum.
Technically, Nixon was on sound ground when his people, answering labor’s complaint, said existing law does not sanction controls on business profits, dividends, interest rates.
Tactically, the President would have been better off if he had indicated intent to seek some sort of legal check or review of these now unrestrained elements in the economy. And key labor leaders might have been brought into more cooperative mood had they been told, even a few hours in advance, what Nixon was going to drop on them the night of August 15.
For their part, the labor chiefs would have been well advised to fight their battle without the threats to wreck the 90-day freeze. They seem to have postured themselves in the role of totally selfish men.
Their emotional recklessness in the heat of combat has made it sound as if a high proportion of the nation’s workers were not much above the starvation level, as if the freeze actually menaced the economic survival of many, many workers.
Well, the available official figures from the Bureau of Labor Statistics don’t support this impression.
In the years since World War II, direct money wages for most groups of U.S. workers have just about tripled. Of course, inflationary forces have also lifted the cost of living – but less rapidly overall.
Therefore, according to a BLS study, workers’ real wages since 1946 have advanced around 60 per cent on the average. Moreover, new kinds of compensation – such as employer-financed pension and health plans – have developed. Says a BLS document on wage trends:
“Since the average rate of increase in employer expenditures on fringe benefits was more rapid than for money wages, the average gain in real compensation from 1946 on typically exceeded 60 per cent.”
Admittedly, not all of these gains have been available for increased personal consumption or savings. Federal and state income taxes have risen markedly during the periods and so have Social Security taxes.
BLS says that, after allowing for these taxes, the workers’ postwar advance in real “spendable” earnings was still in the range of 40 per cent. What these figures mean is that, increasingly over the postwar generation, American workers have been able to buy the things they need and want.
“Want is a key word, for human wants have been escalating right along with wages and prices. More and more people want, and have been getting, houses they can own, cars, costly appliances, air conditioning, college for the kids, television sets, radios, etc.
The freeze is no menace to most workers’ basic needs. Half of U.S. union members live today in suburbs in modest affluence. What Meany and Woodcock really are protesting is any possible halt to the fulfillment of the American workers’ steadily rising economic expectations.
(Newspaper Enterprise Assn.)