Paul W. McCracken, a moderate Republican who served as economic adviser to both Republican and Democratic presidents who led the effort and ineffective President Richard M. Nixon to the rising inflation of the late 1960's and early 1970 to tame, deceased on Friday in Ann Arbor, Michigan, was 96.
His death was announced by the University of Michigan, where he taught for most of his academic career. A great thinker, Mr. McCracken was part of a postwar generation of economists who believed that government should play an active role in moderating economic cycles, balancing inflation and unemployment, and help the disadvantaged.
His nearly three years in the White House coincided with a turbulent period marked by rising deficits, rampant inflation, the imposition of controls on wages and prices, and the distribution of fixed exchange rate system that had dominated the currencies of the world, World War II.
As a result, in early 1980, Mr. McCracken, like other economists, Keynesian in the question of the assumptions which were dominant after the war.
He concluded that the high inflation was the result of "cumulative paralysis our will" and called for greater fiscal discipline to the growth of public expenditure - a subject that still haunt Washington.
"The government has never in the course of 1970 can bring to the first condition for a successful policy of stabilizing prices to meet - namely that its policies simply do not consider" inflation, "Mr. McCracken wrote in 1980.
Indeed, at that time the Federal Reserve, under a new president, Paul A. Volcker, began to sharply increase interest rates, producing back-to-back recession in 1980 and 1982, which eventually broke the back of inflation, but cost painfully high unemployment.
Paul Winston McCracken was born December 29, 1915, in Richland, Iowa. His father, a farmer, and his uncle, economics teacher, encouraged him to study economics at William Penn College (now University) in Oskaloosa, Iowa. He graduated in 1937 and then taught for three years at Berea College in Kentucky, where he met Ruth Emily Siler, a student teacher.
They married in 1942, the same year that Mr. McCracken received a master's degree in economics from Harvard and went to work at the Ministry of Commerce in Washington. From 1943 to 1948 he was researcher at the Federal Reserve Bank of Minneapolis, the completion of a doctorate, also at Harvard. Then the faculty at what is now the Ross School of Business at the University of Michigan.
Mr. McCracken was a member of the Council of Economic Advisers under President Dwight D. 1956-1959 Eisenhower. He unsuccessfully argued for a tax reduction for a severe recession in 1957-58 caused, and said later that the administration hands-off approach to the economy had helped to lead to another recession, in 1960-61, and the cost Nixon , Eisenhower's vice president, presidential elections of 1960.
As a professor, Mr. McCracken served two Democratic presidents John F. Kennedy, a member of a task force for the domestic economy, and Lyndon B. Johnson as part of a committee on the budget accounts.
After winning the elections of 1968, Mr. McCracken Nixon a meeting in New York. He asked the chairman of his Council of Economic Advisers, Mr. McCracken said he would call his wife, but Nixon replied: "I have a press conference in a few minutes, and I have not much to say Why not just there to to announce. " .
The chairman, Mr. McCracken described as "a centrist, a man who is pragmatic in its economy."
Working for Nixon, Mr. McCracken was facing an inflation rate which had risen since 1965, a byproduct of the deficits that the federal government had gained during the Vietnam War.
In a speech in August of 1969, said that the inflation "caused considerable social and economic" and "has a social disintegration through its tendency to escalate tensions in the group."
He also called for extending unemployment insurance, labor training, the poor exempt from federal taxes and improving public transport reorganization - the positions that the dominant liberal consensus of the time display.
Mr. McCracken was a compromise between the directors of Johnson, who had invited him to fine-tuning "fiscal policy for regulating the economy, and the conservative, laissez-faire approach of the Chicago school, led by Milton Friedman.
The Mr. McCracken was the architect of a policy of gradualism, which has sought to slow inflation, with growth a bit, without a recession.
He hoped to slow price increases through a combination of a budget surplus, Johnson proposed as an additional tax is renewed and tighter monetary policy of the Fed, which would reduce speculation in the stock market and the wage demands of unions.
He warned the government not to "lock brakes so badly that the economy would be thrown into the ditch."
But the prices continue to rise despite a recession in 1969-70, and by mid-1970 Nixon had directed the Board of warnings of inflation to be issued "," identifying what Mr. McCracken later called "flagrant" of " inflation, including a big jump in taxi fares in New York City.
After an important weekend in the presidential retreat of Camp David, Nixon decided to wage and price controls to be imposed for the first time since the Korean War.
He has also unilaterally ended the Bretton Woods system, which the United States has agreed to sell gold to foreign governments in exchange for dollars at fixed exchange rates.
Controls were popular and probably a factor in Nixon's landslide reelection in 1972, Mr. McCracken said.
But the checks proved untenable, as Mr McCracken had warned in 1969, when he said they were "much less effective than many are now inclined to believe." They were abandoned in 1974. "Stagflation", a devastating combination of weak growth and high inflation, the U.S. economy continues to besiege until 1980.
Mr. McCracken further argued that gradualism worked ", but are slow and irregular and the political demands were not compatible." In fact, price controls presumably "strengthened and extended" inflation of 1970, wrote in an essay in 1996 Presidential Studies Quarterly.
Mr. McCracken back to Michigan in late 1971. Edmund Ezra Day was Distinguished Professor of Business Administration until his retirement in 1986.
He leaves two daughters, Linda and Paula Langer McCracken. His wife died in 2005.
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