The article compares Donald Trump's economic policies to those of Richard Nixon, focusing on Nixon's 1971 'New Economic Policy'. This policy involved severing the dollar's link to gold, imposing a 10% import tax, and implementing a 90-day wage and price freeze.
While initially successful, Nixon's policy eventually faltered, leading to shortages and increased inflation. This became known as the 'Nixon shock'.
The 'Nixon shock' had significant global repercussions, causing uncertainty and negatively impacting foreign stock markets. The article emphasizes the unilateral nature of Nixon's actions and the resulting global instability.
The article concludes by drawing a parallel between Nixon's actions and Trump's impact on the global economy, suggesting a similarity in their approach and potential consequences.
Donald Trump isn’t the first president to blow up the global economy.
Half a century ago, Richard Nixon scuttled the international trading system and proclaimed a “New Economic Policy” for America. He broke the dollar’s connection to gold, levied a 10 percent tax on imports, and froze wages and prices for 90 days.
His plan worked—for a while. But within a few years it flopped, as controls created shortages and untrammeled federal spending fueled inflation.
What became known as the “Nixon shock” had global implications. Coming one month after Nixon stunned the world with his announcement that he had accepted Premier Zhou Enlai’s invitation to visit the Communist People’s Republic of China, Nixon’s economic speech placed additional burdens on U.S. allies. Foreign stock markets nosedived. Leaders bristled. Uncertainty reigned. America was charting an independent, unilateral course. No one knew the consequences.
Sound familiar?
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