President Carter's new wage-price guidelines are designed to deal with an inflation problem that began in the mid-1960s and whose end most economists say is not in sight.
The 1960s inflation sneaked up on Americans. Before that, soaring prices were considered mainly a war-related phenomenon. Most government policy-making had been aimed at averting high unemployment and recession.
In the past 13 years, prices have just about doubled, making this the period of highest sustained inflation in the nation's history.
The inflation spiral that began in the mid-1960s also was war-related. Its roots were in the start of the Vietnam conflict, when President Johnson refused to raise taxes to finance both military operations and domestic social programs.
No one since has been able to break the spiral. A government-forced recession failed to do the job in 1969-70. So did the first peacetime wage-price controls in U.S. history, in 1971, and - in 1974-75 - the worst recession in 36 years.
As former Federal Reserve Board chairman Arthur F. Burns has observed, none of the traditional economic tools has seemed to work - not boosting unemployment, not tightening credit, and not controls.
Economicsts have similar doubts about Carter's new voluntary guidelines. The program can work only if the administration can keep the economy running relatively slow for several years. But will the voters tolerate that.
Since inflation took off in the mid-1960s, the fires have been refueled repeatedly, both by domestic and international factors.
Every time prices have seemed about to cool - pop! - they have been stoked again.
The list is a long one:
The revival of Japan and West Germany as major economic powers following their post-World War II prostration toppled the dollar as the linchpin of the world economy, prompting devaluations which spur inflation.
Energy prices have been dramatically lifted by the world's exporting countries since 1973, setting off a string of major price increases in almost every other commodity or service, both here and in other countries.
Food prices shot up as the government, trying to counter swings in agricultural production, disrupted the market. And a 1972 Soviet grain sale helped deplete U.S. reserves.
Continued demands by special-interest groups have made Congress reluctant to cut federal spending very much, leading to persistent large budget deficits that upset financial markets.
Heavy wage demands by workers seeking to keep up with inflation and garner more fringe benefits have built higher bisiness costs into the economic system, making it that much more difficult to wind down inflation.
A slump in business investment and a slowdown in technological breakthroughs have led a decline in productivity, or output per workhour - contibuting to higher unit labor costs, which keep prices soaring.
Government pollution-control and safety requirements have added to production costs of manufacturers, with no direct economic return to those businesses - further spurring the overall inflation rate.
Moreover, changes in the structure of the American economy have overtaken the traditional anti-inflation tactics of the 1950s and 1960s:
Increases in government unemployment benefits and the emergence of more two-earner families have insulated workers from recessions, blunting the impact of government efforts to dampen inflation by purposely slowing down the economy.
Recent changes in banking laws have made the housing industry less vulnerable to credit-tightening by the Federal Reserve Board, reducing the impact of interest-rate increases.
The nation now is far more dependent on international trade and investment. As a result, the continuing decline in the dollar has a substantial impact in raising inflation levels here - with little redress.
The Vietnam War inflation spiral stemmed from an outsized federal budget deficit and an overheated economy. Johnson wanted to fight the war and begin new social programs, but was unwilling to pay for both.
The Nixon administration tried to dampen the inflation by slowing the economy. The result - the recession of 1969-70 - didn't have much impact, and prices began accelerating again.
In August 1971, Nixon imposed a 90-day wage-price freeze, and, later, controls. But he used the resulting price hiatus to spur the economy heavily to help win reelection. Once the controls were lifted, prices exploded.
In 1973, the economy was hit by two further inflationary blows.
Prices of basic commodities were sent soaring by a round of shortages, arising in part because all the major industrial nations had spurred their economies into boom-periods at precisely the same time. Demand for goods and services rose worldwide, but supplies failed to keep up.
Second, the Arab oil producers boldly raise prices to four times their previous levels. The result was double-digit inflation, both here and in the rest of the world.
Gerald R. Ford made the most progress against inflation of recent presidents, slashing it in half, from 11 percent in 1974 to 5.8 percent in 1976. But he did it with the longest and deepest recession since before World War II.
Under Carter, inflation has accelerated again, in large part because momentum has resumed throughout the economy, and is becoming entrenched in large wage increases won by major unions.
Critics also have lambasted Carter for not making the hard decisions tions that exacerbate inflation. It was not until August, for example, that Carter announced his first veto of a spending bill.
The current anti-inflation program is Carter's third since he took office. The president made a token effort in April 1977 that never got off the ground. A second, launched last spring, produced similar results.
The fear that the guidelines won't be able to withstand today's inflationary pressures is a solid one. The Kennedy-Johnson guideposts fell apart in 1966, when the airline mechanics refused to abide by the wage standard.
Most analysts agree that Carter is facing a decidedly uphill fight in trying to break the current inflationary psychology. The present round of inflation has 13 years' momentum behind it - not easy to overcome.
