Editing Incomes policy (section)

===United States===
During [[World War II]], price controls were used in an attempt to control wartime inflation. The [[Franklin Roosevelt Administration]] instituted the OPA ([[Office of Price Administration]]). That agency was rather unpopular with business interests and was phased out as quickly as possible after peace had been restored; however, the [[Korean War]] brought a return to the same inflationary pressures, and price controls were again established, this time under the [[Office of Price Stabilization]]. In the early 1970s, inflation had been much higher than in previous decades, getting above 6% briefly in 1970 and persisting above 4% in 1971. U.S. President [[Richard Nixon]] imposed price controls on August 15, 1971.<ref name="pbs" /> This was a move widely applauded by the public<ref name="pbs" /> and a number of Keynesian economists.<ref name="'70s 298">{{cite book|title= How We Got Here: The '70s|last= Frum|first= David|author-link= David Frum|year= 2000|publisher= Basic Books|location= New York, New York|isbn= 0-465-04195-7|pages= [https://archive.org/details/howwegothere70sd00frum/page/298 298–99]|url= https://archive.org/details/howwegothere70sd00frum/page/298}}</ref> The same day, Nixon also suspended the convertibility of the dollar into gold, which was the beginning of the end of the [[Bretton Woods system]] of international currency management established after World War II.<ref name="pbs" /> The 90-day freeze was unprecedented in peacetime, but such drastic measures were thought necessary. It was quite well known at the time that this would likely lead to an immediate inflationary impulse (essentially because the subsequent [[depreciation]] of the dollar would boost the demand for exports and increase the cost of imports). The controls aimed to stop that impulse. The fact that the election of 1972 was on the horizon likely contributed to both Nixon's application of controls and his ending of the convertibility of the dollar.<ref name="pbs" />

The 90-day freeze became nearly 1,000 days of measures known as Phases One, Two, Three, and Four,<ref>http://www.presidency.ucsb.edu/ws/index.php?pid=3868 Richard Nixon speech announcing Phase Four price controls, June 13th, 1973</ref> ending in 1973. In these phases, the controls were applied almost entirely to the biggest corporations and labor unions, which were seen as having price-setting power;<ref name="'70s 298" /> however, 93% of requested price increases were granted and seen as necessary to meet costs.<ref name="'70s 298" /> With such [[monopoly]] power, some economists saw controls as possibly working effectively, although they are usually skeptical on the issue of controls. Because controls of this sort can calm inflationary expectations, this was seen as a serious blow against [[stagflation]]. The first wave of controls were successful at curbing inflation temporarily while the administration used expansionary fiscal and monetary policies;<ref name="nytimes.com">{{cite news|url=https://www.nytimes.com/2004/02/07/opinion/the-nixon-recovery.html|title=The Nixon Recovery|first=Charles R.|last=Morris|date=7 February 2004|access-date=15 April 2018|newspaper=The New York Times}}</ref><ref name="Richard M. Nixon">Friedman, Leon / Levantrosser, William F.[https://books.google.com/books?id=mFcqC8-9xa8C&pg=PA232 ''Richard M. Nixon''], Greenwood Publishing Group, 1991, p. 232 {{ISBN|0-313-27653-6}}, {{ISBN|978-0-313-27653-8}}</ref> however, the long-term effects proved to be destabilizing. Left unsuppressed after the initial price controls were relaxed, the overly expansionary policies proceeded to exacerbate inflationary pressures.<ref name="nytimes.com" /><ref name="Richard M. Nixon" /> Meat also began disappearing from grocery store shelves and Americans protested wage controls that did not allow wages to keep up with inflation.<ref name="pbs" /> Since that time, the U.S. government has not imposed maximum prices on consumer items or labor, although the cap on [[Petroleum|oil]] and [[natural gas]] prices persisted for years after 1973.<ref name="pbs" /> During times of high inflation, controls have been called for; in 1980 during unprecedented inflation, ''[[BusinessWeek]]'' editorialized in favor of semi-permanent wage and price controls.<ref name="'70s 292">{{cite book|title= How We Got Here: The '70s|last= Frum|first= David|author-link= David Frum|year= 2000|publisher= Basic Books|location= New York, New York|isbn= 0-465-04195-7|page= [https://archive.org/details/howwegothere70sd00frum/page/292 292]|url= https://archive.org/details/howwegothere70sd00frum/page/292}}</ref>