In an effort to find out if I was crazy to think that our inflation problems of the 1970s began before the OPEC oil shocks, I have come across the article Whipping Stagflation. I am not attesting to the truth of this article, but this is the way I seem to remember it.
By 1971, pressures produced by the Vietnam War and federal social spending, coupled with the increase in foreign competition, pushed the inflation rate to 5 percent and unemployment to 6 percent. President Richard Nixon responded by increasing federal budget deficits and devaluing the dollar in an attempt to stimulate the economy and to make American goods more competitive overseas. Nixon also imposed a 90-day wage and price freeze, followed by a mandatory set of wage-price guidelines, and then, by voluntary controls. Inflation stayed at about 4 percent during the freeze, but once controls were lifted, inflation resumed its upward climb.