PHASE I
Aug. 15, 1971-Nov. 13, 1971
WAGE-PRICE FREEZE
A clampdown on nearly all pay and price increases, with the major exception of unprocessed farm products. The Cost of Living Council is created, with Treasury Secretary John Connolly as chairman, to enforce the freeze. Compliance is widespread, though some unions complain that the rules are antilabor.
EFFECTIVENESS: Excellent.
Inflation reduced to an annual rate of 1.9%.
PHASE II
Nov. 14, 1971-Jan. 11, 1973
WAGE-PRICE CONTROLS A system yardstick designed to keep inflation in firm check. Wages are to rise no faster than 5.5% annually, prices no more than 2.5%. Profit margins are controlled. Enforcement is divided between the Pay...
