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Richard Nixon

Nixonomics, a portmanteau of the words “Nixon” and “economics”, refers to U.S. President Richard Nixon's economic performance. Also the first president to have his surname combined with the word "Economics".

Nixon inherited a weak economy from President Lyndon B. Johnson, who didn’t follow the advice of his economists. In 1969, a tax bill passed that held several Nixon ideas, including a repeal of the investment tax credit and removal of two million of the nation's poor from the tax rolls. After a year it was becoming obvious that the plan wasn’t working. Nixon gave his budget plan to congress in 1971 in which he was to use a $11.6 billion deficit. Nixon then publicly agreed with Keynesian economic principles which stated that government expenditure could take the nation out of their recession, which was a considerably unusual view for a Republican president.

Arthur Burns, Nixon's appointee to chair the Federal Reserve, shifted away from a tight-money policy because the nation’s unemployment was sharply rising as was inflation. In the early months of 1971, Nixon started criticizing the growing wages in the steel industry, so he created the Tripartite Committee to keep a closer watch on the construction industry. The treasure secretary John Connally announced that the government would need to start taking new measures. Despite this, unemployment had reached 6 percent.

In August the government had made a new plan for the economy with rather extreme measures, measures which would later me dubbed “Nixon Shocks”. The plan was announced on August 15, 1971 in a national televised address. Nixon declared that the gold window would be closed and that gold would no longer be transferable to US dollars. This created an 8 percent devaluation to the dollar, as compared to other of the times major currencies, stimulating American exports and the domestic economy. A 90 day freeze on wages and prices and the establishment of the cost-of-living council was also announced. Unfortunately he neglected to inform any allies before hand, causing some more than minor problems between the countries.

When 1972 came around, unemployment had continued to rise, with 2 million more Americans out of jobs than in 1969. The administration decided it was time to stimulate the economy with a $25.2 billion budget. In the election year, the money supply was expanded by 9 percent. This caused many to accuse Nixon and Burns of making a deal so that Nixon could win the upcoming the election and Burns to keep his government position. Both men denied the accusation.

Soon in the fall, the economy began to improve. Unemployment was finally dropping and inflation was staying relatively in control. America had temporarily gotten out of the recession. Unfortunately inflation soon increased. When the failed wage and price control was lifted, other problems took its toll on the American economy. An expanded money supply, the effects of far increased deficits, and the rising of price of oil all left there mark on the American economy. By 1973 inflation increased 8.8 percent, then 12.2 percent in the following year.

Other presidential "-omics"

Further reading

  • Leonard Silk. Nixonomics: How the Dismal Science of Free Enterprise Became the Black Art of Controls

External links

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Wiktionary

Up to date as of January 15, 2010

Definition from Wiktionary, a free dictionary

Contents

English

Etymology

Blend of Nixon and economics. Coined in a speech of the same title by Walter Heller in October 1969. This is believed to be the first such term coined by blending a president's surname with the word "economics." [1] Similar blends have been used to describe the economic policies of all subsequent US presidents except Ford.

Noun

Singular
Nixonomics

Plural
uncountable

Nixonomics (uncountable)

  1. (US politics) The economic policies of the Richard Nixon administration, 1969-1974.
    • 1971 September 6, “Nixon's Freeze and the Mood of Labor”, Time Magazine:
      Senators William Proxmire and Hubert Humphrey, among others, hinted that the new Nixonomics may be due for some design changes when it reaches the Senate.

Related terms


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