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Nov. 22, 2021, 11:04 a.m. EST

Here’s what a 1970s inflation-fighting fiasco says about the battle against rising prices

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By William Watts

Surging inflation is stirring memories of the 1970s, but isn’t doing much to boost the value of a piece of political memorabilia that’s an artifact of an ill-fated fight against rising prices.

Art Hogan said he scrambled last month to find a “Whip Inflation Now,” or WIN, button. The chief market strategist at B. Riley National said he wears the button, which he bought on eBay for less than $10, during video calls with financial advisers to help rebut concerns that current price pressures are comparable to the stagflation that came to define the 1970s.

But ironic interest in the red-and-white buttons produced in bulk as part of a public-service campaign launched in 1974 by President Gerald Ford, and widely viewed as a flop, isn’t likely to turn the souvenirs into anything resembling an inflation hedge.

“They don’t sell for a lot of money,” said Curtis Lindner, director of Americana at Heritage Auctions, a Dallas-based auction house. “At one time they were very popular with collectors.”

Stagflation redux?

As for inflation, Hogan said the 1970s comparisons aren’t surprising, with the Consumer Price Index rising to a nearly 31-year high in October at 6.2%. But like many investors and economists, Hogan contends that the similarities are only skin-deep .

The 1970s saw even higher stretches of double-digit U.S. inflation than this year, after the supply shock caused by OPEC quadrupling crude oil prices, while unemployment also rose and the economy foundered — a condition that came to be known as “stagflation.” The current inflation surge, in contrast, is due in large part to surging demand for goods as government stimulus payments helped the economy bounce back from business shutdowns during the pandemic which also caused some supply chain disruptions.

“That was inflation with no economic benefit to it,” Hogan said of the 1970s, in a phone interview last week. Now, inflation is rising “because demand came back faster than supply” in the wake of the shutdowns caused by the COVID-19 pandemic.

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.56% fell nearly 28% in 1974, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.08% dropped nearly 30% before both gauges bounced back sharply in 1975. Stocks saw a negative 11.6% real return over the high-inflation period stretching from 1969 to 1982, according to DataTrek Research.

The Dow is up more than 17% year to date, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.08% has risen around 25%, with major indexes hitting numerous records over the course of 2021.

Read: Why the hottest inflation in 3 decades isn’t rattling stock-market bulls

That doesn’t mean inflation isn’t a concern. Though many economists emphasize the differences between the 1970s and now, there is debate over how quickly those inflation pressures are likely to fade.

See: High inflation is eating up the budgets of American households

Political toll

For politicians, the pain inflicted by inflation can be costly. President Joe Biden’s approval ratings have suffered, with a Washington Post/ABC News poll released Sunday showing that 55% of respondents disapproved of his handling of the economy, 6 percentage points more than former President Donald Trump’s worst showing in September 2017.

Related: ‘We’ll see lower prices’: Biden says passage of his agenda will tame inflation

Ford was feeling the heat in 1974. WIN buttons were introduced in October as inflation accelerated in the wake of the first Arab oil embargo; the Consumer Price Index rose at an annual rate of more than 11% that year. With the economy mired in recession, Ford, in a speech, proposed a raft of measures aimed at squelching inflation, including removing acreage limits on a number of crops and overhauling energy regulations.

But the heart of the effort, and what’s most remembered today, was Ford’s description of the fight against inflation as a moral battle, invoking comparisons to the home-front efforts of World War II and exhorting citizens to spend less and save more.

“Every housewife knows almost exactly how much she spent for food last week. If you cannot spare a penny from your food budget — and I know there are many — surely you can cut the food that you waste by 5%,” Ford said.

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