Remarks on Inflation and Unemployment in Houston, Texas
One of the biggest issues in this campaign is the Republican mismanagement of the economy. The Republicans have managed for the past eight years to give us both rising unemployment rates and rising inflation—something the economists had always said was impossible.
Economics is a very complicated business. Not many people understand it. But we'd better all try to understand it, because Republican economic policies are robbing us all, every day, and have been for almost eight years.
Let's look at one statistic and what it means. A few days ago, the Bureau of Labor Statistics announced that consumer prices rose by 0.5 percent in August—last month. That may not sound like much, but on an annual basis that's 6 percent inflation for a year.
The White House press secretary said the administration was "encouraged" by the 0.5 percent figure. I suppose he meant he was happy it wasn't 10 percent or 20 percent—there isn't anything else to be "encouraged" about.
Let's compare that 6 percent figure with some past inflation figures.
We had serious inflation during the Korean War—3.8 percent in 1950 and 5.9 percent in 1951—but even that was less than today. Once that war was over the inflation rate settled down, and for the next 14 years, from 1952 through 1965, the annual rate of increase for consumer prices averaged only 1.3 percent—less than one-fourth of the rate that the White House now finds so encouraging.
Inflation went up during the last three years of the Johnson Administration largely because of the war in Vietnam, but even then it averaged only 3.7 percent.
Then we come to the Nixon years. Inflation was 8.8 percent in 1973 and 12.2 percent in 1974. Since then it has been up and down, but the overall average has been 6 percent. Last year, Mr. Ford's first full year in office, it was 7 percent. This year it is headed toward being 6 percent. Next year's projection is—once again—6 percent.
The Republicans have become six-percenters on inflation. They ask us to accept that rate, to think of 6 percent as normal, to be glad it isn't worse. But the fact is that it is a terrible, unacceptable rate, and that their own mismanagement has caused it. The Republicans have tried to halt inflation by slowing down the economy—by putting people out of work—and that policy has been a dismal failure.
What does this 6 percent inflation mean to the average American? It means that if you put your money in the bank and collect 5 percent interest, you are losing money instead of making money on your savings. It means that if you live on fixed income, as many elderly Americans do, our money is worth less and less each day, just as surely as if someone was robbing you.
And for the average worker, it means that wage increases don't mean anything unless the increase is greater than the inflation rate. And that hasn't been the case during the Ford Administration.
Let's translate the percentages into actual wages. During the Kennedy-Johnson years, the average weekly earnings of an American worker with a wife and two children increased from $90.95 to $103.39, and those are adjusted figures that take inflation into account. In other words, in terms of real purchasing power, the average worker was making more than $12 a week more at the end of the Democratic era, an increase of more than $600 over the full eight years, or an average annual increase of more than $75.
Now let's look at what happened under the Republicans. In 1969, the Republicans' first year, the average weekly income rose to $104.38. Five years later, in 1974, the year Mr. Ford took office, the average had actually gone down a penny, to $104.37. And now, today, after two years of the Ford Administration, the average wage in real purchasing power has dropped to $102.88. In the last two years, in other words, weekly income has gone down about $1.50, which is a $78 loss for his two years or a loss of $39 per year.
In short, Gerald Ford, with the economic policies he lakes such pride in, has managed in two years to set the American worker back more than eight years, back to a lower average wage than he had in 1968, the last Democratic year. Under the Republicans the worker and his family have been on a treadmill, and under Ford the treadmill has accelerated, so that no matter how fast he runs or how hard he works, the average worker keeps losing ground.
This isn't fair. It isn't right. It reflects economic policies that are inept at best and indifferent at worst. Democratic prosperity has been replaced by Republican stagnation—and yet they ask us to be encouraged by their record and to vote for four more years of the same.
Here are some things we should do to lower inflation: (1) decrease federal budget deficits through increased revenues; (2) increase productivity; (3) increase competition through strict anti-trust enforcement and by reform of government regulations which have an inflationary impact (for example, regulation of airline fares and the backhaul rule); (4) increase employment—since only 73 percent of our industrial capacity is being utilized, we can reduce unemployment through selective programs without increasing inflation; (5) ensuring a more adequate supply of basic commodities on a more predictable basis; (6) voluntary wage and price guidelines worked out in close cooperation with labor and industry, with prior notice being afforded of any increases above those voluntary guidelines; (7) through public leadership—jawboning—by the President—such as John Kennedy exercised during the 1962 steel price increases; (8) strengthening the Council on Wage and Price Stability so that it more adequately exercises its subpoena power, with public hearings to focus attention on excessive price and wage increases; (9) reorganization and zero-based budgeting together with such laws.
I've been talking about inflation today, but the Republican mismanagement has caused high unemployment as well. Every Republican Administration since Hoover has left office with an unemployment rate at least double what it was when they took office. The Nixon-Ford duo has continued this tradition. When Nixon became President in January of 1969, the unemployment rate was 3.4 percent. When Ford leaves office next January, he will leave us at least a 7 percent unemployment rate, and probably worse. The Republicans have proved they can give us high unemployment and high inflation at the same time. We Democrats have shown that we can provide low inflation and low unemployment. That's one of the differences between us.
I think America can do better. I think it's time for Democratic leadership that can enact economic policies that put people ahead of the special interests, and return us to the prosperity of the Democratic years. I ask every American who agrees with me to vote for the Carter-Mondale ticket on November 2.
Jimmy Carter, Remarks on Inflation and Unemployment in Houston, Texas Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/347540