Los Angeles Times

Trump is pressuring the Fed to keep interest rates low. Nixon actually did it — and damaged the economy

WASHINGTON - The Federal Reserve was raising interest rates and the president wasn't happy about it.

No, it wasn't President Donald Trump, who took the unusual step of publicly criticizing the independent central bank last week. It was another volatile president - Richard Nixon - and the experience presents a cautionary tale.

The U.S. had just emerged from a nearly yearlong recession in 1971 after the independent central bank slashed its key short-term interest rate by more than half.

Fed Chairman Arthur Burns was worried that continuing the low rates and expansionary monetary policy with the economy growing again could lead to what he called "awful problems" down the line.

Nixon was more worried about his re-election in 1972.

"We've really got to think of goosing it ... late summer and fall of this year and next year," Nixon told Burns on March 19, 1971, according to White House audio recordings released years later.

It was one of several

You're reading a preview, sign up to read more.

More from Los Angeles Times

Los Angeles Times3 min read
Short-handed, Weary Clippers Lose To Bulls To End Road Trip
CHICAGO - As tipoff approached Saturday night, the Los Angeles Clippers and Chicago Bulls found themselves in positions neither wanted to be in. After an 8:45 p.m. tipoff in Minneapolis the previous night, the Clippers arrived at their Chicago hotel
Los Angeles Times3 min read
Sam Farmer: Cowboys Might Not Be As Good As Their Bad Record
ARLINGTON, Texas - The Dallas Cowboys can't take away the football. Nor can they give away the football season. The NFC East is so lousy, the 6-7 Cowboys couldn't be irrelevant if they tried. Even though they have lost seven of their last 10 games, t
Los Angeles Times3 min readPolitics
Scuffles Break Out In Glendale As Rep. Adam Schiff Speaks At Armenian Genocide Event
LOS ANGELES - Scuffles broke out Saturday during a Glendale town hall event on Armenian genocide that was attended by Rep. Adam B. Schiff (D-Burbank), who is at the center of the effort to impeach President Trump. The event at the Glendale Central Li