How a Young Dick Cheney Fixed Prices for Millions

In the Nixon White House, he helped Donald Rumsfeld implement wage and price controls at the urging of their boss

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Imagine if Barack Obama proposed, as an economic recovery measure, that all prices and wages in America be frozen, so that his staff could determine which businesses would be allowed to charge more for their products and which employees would be permitted to earn more.

The right would scream socialism. Americans would be outraged. And rightly so! The policy would be an affront to the free enterprise system, and vest far too much power in the executive branch. But it wouldn't be unprecedented. Back in 1971, President Nixon reacted to high inflation by declaring a 90 day freeze on wages and prices. The policy would ultimately be in place for almost 1,000 days before being scrapped as an imprudent failure. Free enterprise survived.

What makes this mostly forgotten story of market capitalism's suspension especially improbable? The identity of the White House employees who centrally planned the U.S. economy: Donald Rumsfeld and his then assistant Dick Cheney, the latter of whom relates the story in his memoir:

The two entities that were supposed to write the regulations, the Pay Board and the Price Commission, wrangled and dithered. When it looked as though they were going to miss a crucial deadline for getting regulations published in the Federal Register, Rumsfeld decided to take things in hand. He assembled Jack Grayson, the chairman of the Price Commission, and about a dozen of our CLC staff and said that we wouldn't be leaving until we had the regulations ready for the printer. We set up in Rumsfeld's outer office, and as others paced and dictated, I sat at one of the secretary's desks and typed everything on an IBM Selectric typewriter.

By nine the next morning, when the secretaries arrived and emptied the ashtrays and replenished the coffee, we had written the regulations that would now be governing a major share of the U.S. economy. The degree of detail we achieved during our overnighter was truly impressive. We drew distinctions between apples and applesauce; popped and unpopped corn; raw cabbage and packaged slaw; fresh oranges and glazed citrus peel; garden plants, cut flowers, and floral wreaths. We regulated seafood products "including those which have been shelled, shucked, iced, skinned, scaled, eviscerated, or decapitated." We covered products custom-made to individual order, including leather goods, fur apparel, jewelry, and wigs and toupees.

Cheney would go on to be President Ford's chief-off-staff, amass an ultra-conservative voting record as a 5-term Congressman from Wyoming, serve as Secretary of Defense under George H.W. Bush, and emerge as a hero of the conservative movement during George W. Bush's 8-year tenure. How unusual that he was also instrumental in implementing one of the most extreme peacetime curtailments of economic liberty in U.S. history -- a testament, perhaps, to the unwavering loyalty that White House staffers often bestow upon the presidents who they serve.

Image credit: Reuters