This episode of the Planet Money podcast explores the possibility that President Nixon influenced the monetary policy decisions of Federal Reserve Chairman Arthur Burns, contributing to the soaring inflation of the 1970s. By examining Nixon's recorded tapes and Burns's diary, the podcast uncovers instances where Nixon pressed Burns to implement expansionary monetary policies for political advantage, despite Burns's hesitations. Notably, Nixon made direct calls urging Burns to lower interest rates, while Burns's diary reflects his worries about pressure from the White House and the risks posed to the Fed's independence. Ultimately, the podcast reveals how Nixon's actions undermined the Fed's autonomy, highlighting the dangers of political interference in monetary policy and its lasting economic effects. Listeners come away with a deeper understanding of the significance of central bank independence and the risks associated with politicizing economic choices.
