For 90 days in 1971, Arnold Weber had the authority to tell U.S. executives and business owners whether they could raise prices or wages. In general, the answer was no.
A Bronx-born labor economist, Dr. Weber was executive director of the Cost of Living Council, a Nixon administration effort to squash inflation by temporarily blocking increases in nearly all wages and prices. That shock therapy, announced Aug. 15, 1971, was part of a package that also ended the fixed gold-dollar conversion rate. Dr. Weber recalled briefing President Richard Nixon on the freeze. Mr. Nixon seemed uninterested in most of the details but asked whether it applied to professional football players and ticket prices. Dr. Weber said that, to create a sense of equity, the freeze had to apply to everyone. The president found that “a little strange,” Dr. Weber said in a 2007 oral history with the Nixon Library.
The freeze, followed by looser guidelines, failed to “slay the inflationary dragon,” as Dr. Weber put it. Consumer price inflation, 5.8% in 1970, slowed temporarily but then accelerated to an annual rate of 6% in 1973 and 11% in 1974. It moderated only in the early 1980s after the Federal Reserve pushed interest rates to double-digit levels.
After serving briefly as price czar, Dr. Weber returned to academic life and became president of the University of Colorado and later Northwestern University. He died Aug. 20 at his home in Northbrook, Ill. He was 90 and had been under treatment for respiratory and heart problems. “The imposition of wage-price controls,” he wrote 10 years after the event, “was a chapter in the recurrent quest for a magic bullet to deal with our economic ills.”
During the freeze, he and other administrators investigated alleged violations, including by bowling alleys, and faced daily demands for exceptions. “We sadly observed that every exception to the regulations created one ingrate and two enemies,” he wrote. At one point, he recalled, “we issued a rule aimed at controlling the prices in futures markets that was so contrary to established behavior that the markets simply shut down.” Yet the economy survived. Dr. Weber sought advice on the freeze from his mentor, George Shultz, then director of the Office of Management and Budget. “Don’t worry, the economy is too complex and tough to be wrecked by the likes of you,” Dr. Shultz quipped.
Arnold Robert Weber was born Sept. 20, 1929, and grew up in the Bronx. His father did electrical work at construction sites and was active in the International Brotherhood of Electrical Workers. “The union was his religious surrogate,” Dr. Weber said in the oral history. He recalled buying day-old bread during the Depression and an early job as a pin setter in a bowling alley. His desire to attend a faraway college distressed his mother, who hid an acceptance letter from the University of Illinois but later relented. He initially aimed to become a journalist and wrote for a college humor magazine but then majored in economics. On campus, he met his future wife, Edna Files, who was studying home economics. He earned a master’s degree in industrial relations and served for two years in the Coast Guard before enrolling at the Massachusetts Institute of Technology, where he completed a Ph.D. in economics in 1958. At MIT, he attracted the attention of Dr. Shultz, later U.S. secretary of state. Dr. Shultz moved to the University of Chicago and recruited Dr. Weber to join him there and teach industrial relations. During the 1960s, he also helped run a retraining program for workers sidelined by automation.
When Dr. Shultz became U.S. labor secretary in 1969 in the Nixon administration, he brought Dr. Weber along as an assistant secretary. Dr. Weber embraced the opportunity even though he had voted for Hubert Humphrey in the 1968 election. Part of his job involved prodding construction unions to provide job opportunities for minorities. Dr. Shultz later headed the Office of Management and Budget, and Dr. Weber joined him there as an associate director. That job led to his leading role in the wage-price freeze.
After the 90-day freeze ended, Dr. Weber taught at the University of Chicago and later Carnegie Mellon University, where he became a dean and provost. He was president of the University of Colorado for the first half of the 1980s before starting a decade at the helm of Northwestern, where he improved finances and installed computer programs to alert him to overspending. The Chicago Tribune in 1985 described him as “impeccably tailored and with a voice that sounds like gravel pouring into a cake pan.”
He served as a director of companies including Aon Corp., Deere & Co. and PepsiCo Inc. Dr. Weber is survived by three sons and eight grandchildren. His wife, Edna, died in 2014. In the early 1990s, Dr. Weber spotted Mr. Nixon at a dinner. “I had the privilege of serving in your administration, Mr. President,” Dr. Weber recalled saying. Mr. Nixon remembered him vaguely as “one of those intellectuals” and asked for his current occupation. Dr. Weber said he was president of Northwestern. “That’s a fine university,” Mr. Nixon said, according to Dr. Weber’s account, “but you really ought to do something about that football team.”
Write to James R. Hagerty at email@example.com
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Appeared in the August 29, 2020, print edition as 'Economist Called Shots When Nixon Froze Prices.'