Nixon’s Economy: Booms, Busts, Dollars, and Votes

This text presents the history of Richard Nixon’s political economy. Though 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 Connelly, who became Secretary of the Treasury midway through the first term. Connelly and Nixon set out to save Nixon’s presidency by any means necessary. In a televised speech on August 15th, 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. The economy took off in 1972, and Nixon’s re-election by a landslide was assured.