PHASE III: Credibility and Controls

PRESIDENT NIXON had good reason for confidence when he ordered formal wage-price controls replaced by the more voluntary restraints of Phase III last January. Increases in the U.S. cost of living seemed to have been brought down to tolerable levels. Since then, though, there has been more and more reason for the rest of the nation to start worrying. Inflation seems once again to be getting out of hand, despite repeated assurances from the President and Treasury Secretary George Shultz that Washington retains ample authority to crack down on price boosters. There was even more concern last week after the...

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