Whip Inflation Now – WIN

Inflation occurs when too much money is chasing too few goods and services. If ten people each want one hamburger, but only five hamburgers are available, the price of each hamburger will increase, because demand exceeds supply. If fifteen hamburgers are available, the price of each hamburger will decrease, because supply exceeds demand.

Inflation is over 9% in the US, the highest rate since the early 1980s. People in nations across the globe are watching their wages, their savings, and their economic stability evaporate as prices for goods and services skyrocket. Titans of business, whose basic needs of living cost a tiny portion of their net worth, are unfazed. Wage earners, retirees, and average citizens from Andorra to Zimbabwe, suffer.

In 1974, inflamed by the Arab oil embargo, economic stagnation, and high unemployment, inflation in the United States stood at 12.3%. President Gerald Ford, wary of price controls, implemented a public relations program called Whip Inflation Now (WIN). At this time, food and petroleum prices were the primary drivers of this inflation. In his speech introducing the program, the President called for individuals, families, and communities to join with government to help beat inflation.[1] Though the program was widely ridiculed, Ford proposed some actions, by the people and by the government, that are worth remembering today. He said that none his recommended actions would suffice alone, but together these actions, done by people of industry and goodwill, would whip inflation.

1. Food – Produce food at full capacity. This included government action to ensure the availability of means, such as fertilizer, and ends, such as reasonable prices. Ford would accomplish these means and ends by eliminating regulations and restrictive practices, such as acreage limitations, rather than price controls.
2. Energy – Develop a national energy policy. This included weaning America off foreign energy sources such as oil and increasing US use of domestic energy sources such as renewables (solar, wind, hydroelectric, geothermal), nuclear, coal, and natural gas. Ford wanted automakers to increase gas mileage by 40%, “by agreement or by law.”
3. Restrictive Practices – Eliminate anticompetitive and inefficient practices whether arising from government, industry, or labor, including vigorously enforcing anti-trust laws. The president told the Council of Wage and Price Stability to evaluate the inflationary effects of government action, asked Congress to implement a National Commission on Regulatory Reform, required all executive branch initiatives to be reviewed to minimize inflationary effects, and urged state and local governments to do the same.
4. Monetary Practices – Ensure a moderate expansion in the availability of capital to allow overall economic expansion. This would include a 10% investment tax credit to encourage companies to grow and create more jobs and other tax legislation.
5. Helping the economically depressed – Ford asked Congress to expand unemployment benefits and institute a Community Improvement Corps which would provide short-term jobs for the unemployed. Within the Executive Branch, he funded an additional 170,000 public sector jobs.  
6. Stimulate Housing – The US population grew from 140 million in 1945 to 216 million in 1975, and affordable housing did not keep pace with the demand. Ford asked Congress to expand federal involvement in making homes available to all Americans.
7. Thrift Institutions – Inflation and high interest rates damaged savings and loan businesses as well as credit unions. In turn, these institutions were constricted in their ability to fund home mortgages.
8. International Interdependency – Ford argued that to ensure American stability and prosperity, we needed to help make the whole world more stable and prosperous.
9. Federal taxes and spending – The President asked Congress, and voters, since an election was only four weeks away, to approve a 1-year temporary tax surcharge of 5 percent on corporate and upper-level individual incomes. Ford also proposed a federal spending limit of $300 billion for 1975.

President Gerald Ford suffered defeat in the 1974 mid-terms and did not win reelection to the presidency in November of 1976. Some of his proposals, like the tax increase, would be rejected out of hand by Republicans, and many Americans, today. Other proposals are much more likely to be implemented. Ford’s overall theme was about cutting regulations and shrinking government. Worldwide, but especially in the United States, regulations have become a python, encircling every aspect of organizational and individual behavior, and squeezing the life out of both.

President Joe Biden also has a plan to stop inflation.[2] It includes:

1. Lowering fuel costs – Release one million barrels of oil per day from the Strategic Petroleum Reserve. Make 15% ethanol gasoline available. Punish companies who let wells on federal lands go idle. Biden has asked Congress to pass tax credits for clean energy vehicles and impose fuel economy standards on manufacturers.
2. Lowering other costs – Allow Medicare and Medicaid to dictate medication costs to drug companies, thereby decreasing costs of medicine and functioning as a de facto price control. Expand tax credits for families to use the Affordable Care Art (ACA). Giving over $1 billion to agricultural small businesses and workers. Asking Congress to fund childcare. Spending more federal money to support house construction and borrowing. Improving infrastructure, including roads, bridges, airports, ports, power grids, and digital communications.
3. Increasing revenue – Increasing taxes on corporations, and a minimum 20% tax on individuals with a net worth of $100 million or more. These taxes would include unrealized capital gains, which means that if a person’s stock portfolio value increased by $1 million, even if the holder did not sell the stock and thereby get the money, the holder would owe $200,000 in taxes.   

The Biden plan says little about decreasing the burden of regulation, and much about spending money. It does not ask for a generalized tax increase like the Ford plan did. Biden’s plan does not include monetary policy, and does not call for national strategies for energy, or other key issues. Biden wants to institute price controls over 1.8% of US Gross Domestic Product (GDP), 10% of the 18% of US GDP spent on health care.[3] Notably, Biden explicitly blames Russian President Vladimir Putin and the Russians for inflation, but Ford did not explicitly blame the Arabs for the oil embargo, the Israelis for the Yom Kippur War, or the Soviets for the Cold War.

Conclusion

Governments are responsible for setting up the economic conditions in which individuals and organizations can thrive. They are responsible for equal opportunity, not equal outcome, for all citizens. But governments generally fall short of what they attempt, and inflation is no exception. Individuals and groups are the best suited to protect themselves against the hazards that they face, such as inflation. Contrasting Ford’s plans with Biden’s plans contrasts a moral, responsible man willing to take a risk for his nation with a spendthrift offering more than he can possibly deliver in pursuit of an ill-advised and power-hungry social agenda.

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[1] October 8, 1974: “Whip Inflation Now” Speech, https://millercenter.org/the-presidency/presidential-speeches/october-8-1974-whip-inflation-now-speech.

[2] The Biden-⁠Harris Inflation Plan: Lowering Costs and Lowering the Deficit, https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/10/the-biden-harris-inflation-plan-lowering-costs-and-lowering-the-deficit/.

[3] The Hutchins Center Explains: Prescription drug spending, https://www.brookings.edu/blog/up-front/2017/04/26/the-hutchins-center-explains-prescription-drug-spending/#:~:text=In%202015%2C%20the%20U.S.%20spent%20%24325%20billion%20on,GDP%2C%20or%2010%25%20of%20total%20national%20health%20expenditures.