Welcome Back, Richard Nixon!

Who would have thunk it? Fifty years after he resigned his office in disgrace and 30 years after his death, Richard Milhous Nixon is suddenly in vogue again. You may not hear his name mentioned, but you will be hearing a lot about one of his most controversial (and failed) economic policies between now and Election Day.

Ironically, the policy in question isn’t being promoted by his fellow Republicans, who remain free-market capitalists, but by the Democrats whom he despised. That’s right, folks; soon-to-be Democratic Party presidential nominee Kamala Harris is championing the wage and price controls that President Nixon hitched his economic wagon to back in 1971.

The previous year, Congress had passed the Economic Stabilization Act of 1970, which authorized the President to stabilize prices, rents, wages, salaries, interest rates, and dividends. That, my friends, is Socialism 101. Fearing his re-election chances would be hindered by high inflation, Nixon decided to use the new law to stop rising prices in their tracks.

On Aug. 15, 1971, in a nationally televised address, Nixon announced, “I am today ordering a freeze on all prices and wages throughout the United States.” Under Nixon’s plan, there would be an initial 90-day freeze, after which any increases would have to be approved by a “Pay Board” and a “Price Commission”.

Surprisingly, public reaction was positive, with 75% of Americans supporting the measures. However, economist Milton Friedman wasn’t a fan, predicting that price controls would set the stage for food shortages and runaway inflation… and that’s exactly what happened. Fortunately for Nixon, those things didn’t happen until after he was re-elected in 1972.

By the time Nixon reimposed a temporary freeze in June 1973, it was obvious that price controls didn’t work. As Daniel Yergin and Joseph Stanislaw wrote in The Commanding Heights: The Battle for the World Economy: “Ranchers stopped shipping their cattle to the market, farmers drowned their chickens [rather than sell them at low prices], and consumers emptied the shelves of supermarkets.”

The after-effects of Nixon’s price controls weren’t fully felt until the late 1970s. Price hikes from the 1973 Arab oil embargo made it politically difficult to roll back controls on gasoline, which eventually led to gas shortages and long lines at the pumps… an economic debacle that infuriated voters and helped cost Jimmy Carter his re-election in 1980.

So, why would Kamala Harris want to resurrect such a draconian policy that was an abject failure the first time around? That’s the easiest question of all to answer. First, she could care less about the long-term effects of price controls because she is only focused on winning on November 5th… and just like they were in 1971, price controls are initially popular because they sound better than they are.

Second, micro-managing the economy is what Socialists do. It’s in their DNA. They hate capitalism and the free-market system, because it prevents them from exercising complete control over people’s lives. Socialism is all about gaining and maintaining centralized power… period.

Will Kamala’s ploy work? I am sure that her internal polls show that uneducated consumers – who are most likely uneducated voters – will applaud the idea of stabilized prices. Until that is, shelves start getting a bit bare and some items (remember the drowned chickens and the eggs they lay?) become increasingly scarce.

According to Peter Zaleski, an economics professor at Villanova University, most supermarket chains operate on a 1% profit margin. That means there is very little room for error and so, when production and transportation costs go up, but Kroger and Publix aren’t allowed to adjust their prices accordingly, something will have to give.

That’s the problem with Socialism in general, politicians as a whole, and Kamala Harris in particular. Not only does she lack real-life business experience, but like most candidates who are laser-focused on Election Day, Ms. Harris is extremely short-sighted and self-serving.

Whatever it takes to get elected is all that matters… and let the consumers and the chickens be damned.