# Arthur Burns **Arthur F. Burns** (1904–1987) was Chair of the [[Federal Reserve]] from **February 1, 1970 to January 31, 1978**, appointed by [[Richard Nixon]]. He is the central case in the history of presidential pressure on the Fed, and the reason "independence" became the first commandment of central banking. ## The economist Born in Austria-Hungary and raised in New Jersey, Burns became the leading American scholar of business cycles. With Wesley Mitchell at the National Bureau of Economic Research he wrote *Measuring Business Cycles* (1946), the empirical foundation for how recessions are still dated. He taught first at Rutgers, where [[Milton Friedman]] was his student, and then at Columbia. He chaired [[Dwight D. Eisenhower]]'s Council of Economic Advisers (1953–1956). In March 1960 he warned Vice President Nixon that the economy would dip before that November's election, the downturn Nixon later blamed for his loss to Kennedy. Nixon did not forget either the advice or the lesson. ## The chairman Nixon made Burns a White House counselor in 1969 and then Fed chair. The Nixon tapes record the president pushing him toward easier money ahead of the 1972 election. In a February 1972 conversation Nixon told him, "I really don't care what you do in April, but between now and April…", among other garbled but unmistakable fragments that Burton Abrams transcribed in 2006. Money growth rose through 1972, and Nixon won in a landslide. Burns also backed the August 1971 wage and price controls that accompanied the [[Nixon Shock]], on the theory that inflation was driven by union and corporate pricing power rather than by money. When the 1973 oil embargo hit, the Fed accommodated it (see [[Supply Shock]]). Inflation reached double digits by 1974 and the [[Great Inflation]] set in, until [[Paul Volcker]] broke it at the cost of two recessions. ## Pressure or conviction? Whether Burns bent to Nixon or acted on his own beliefs is still argued. The economist who studied the tapes, Burton Abrams, concluded that the answer "may never be definitively determined." Burns's own verdict came in his 1979 lecture, **"The Anguish of Central Banking"**. He conceded that the Fed "had the power to abort the inflation at its incipient stage" and still had the power to end it. It did not act, he argued, because it was itself "caught up in the philosophic and political currents" of the era, and sustained resistance would have been frustrated politically. The lecture is an admission that the failure was one of will, not capacity. ## Why he matters now Every argument about a president leaning on the Fed, including the 2025–26 fights over [[Jerome Powell]], Lisa Cook and the Fed's independence, runs through Burns. Defenders of independence cite him as the warning. Advocates of presidential control answer that Burns proves independence was never real in the first place. After the Fed, Reagan made him ambassador to West Germany (1981–1985). ## See also - [[Great Inflation]] · [[Interest Rate Policy Timeline]] · [[Central Bank Independence]] · [[Nixon Shock]] - [[Inflation Expectations]] · [[William McChesney Martin]] · [[G. William Miller]] · [[Paul Volcker]]