Some of the best humor is found on the business page. Explaining why stocks dropped, The Washington Post reported that "the fear was twofold -- that the Federal Reserve would raise rates from their historic low next month and possibly slow economic growth, and that the Fed may have been too slow to raise rates, raising the specter of inflation." Damned if you do, Mr. Greenspan, and damned if you don't. I find both concerns overblown, not to mention inconsistent.

 There has been some speculation that the Fed's "patience" might have something to do with the fact that Greenspan is a Republican and this is a presidential election year. And that, in turn, has invited analogies with 1972, when Fed Chairman Arthur Burns supposedly pursued an inflationary policy to help get Richard Nixon re-elected.

 In February, I wrote that during postwar presidential election years, "The Fed eased three times, in 1960, 1972 and 1992, yet the incumbent party lost two of those three." I did not say more about the one exception, 1972. But my old friend Bruce Bartlett recently quoted historian Allen Matusow who wrote: "Burns had offered Nixon an implicit bargain. In 1971 Nixon controlled prices, and in 1972 Burns supplied money by the bushel. The policy helped re-elect the president." That combination of easy money and price controls boosted demand and discouraged supply, creating widespread shortages and an explosive inflation that ultimately blew the lid off controls.

 Arthur Burns' son Joseph, on the other hand, recently wrote a letter to The Wall Street Journal denying his father was politically motivated. Who's right?

 Bartlett says: "One is left with the inescapable conclusion that Burns used the Fed to help Nixon with full knowledge of the disastrous consequences for the economy. The only alternative is to believe he was incompetent, which no economist believes was the case."

 I beg to differ. On the question of inflation, Arthur Burns was only one of many high-profile economists (Ken Galbraith was another) who actively promoted an "incomes policy" in 1971 to stop what they called "a wage-price spiral." That is why I submitted "The Case Against Wage and Price Controls" to National Review weeks before President Nixon announced the wage-price freeze on Aug. 15, 1971. I regard the advocacy of price controls as definitive evidence of incompetence.

 Nixon's New Economic Policy emerged after a meeting at Camp David attended by men whose names still remain in the public spotlight, such as Peter G. Peterson and Paul Volcker. Treasury Secretary John Connally was an enthusiastic advocate of controls, as were Nixon's infamous assistants H.R. Halderman and John Ehrlichman. Budget Director George Schultz was skeptical. Only Nixon's honorable Council of Economic Advisors chairman, Paul McCracken, resigned in protest.

 That fateful Camp David meeting was documented in Joanne Gowa's 1983 book, "Closing the Gold Window." Gowa noted that "tensions had emerged during the previous six months between Burns and the administration, due in part to Burns's public advocacy of wage and price controls. The Nixon administration ... objected to the Federal Reserve chairman's outspoken campaign. ... Connally and Burns had been pressing the president to implement an income policy."

 I met Burns years later, introduced to him by Friedrich Hayek at a Washington, D.C., event. Even in 1971, however, Burns' advocacy of both easy money and wage-price controls was no surprise to me. In his1958 book, "Prosperity Without Inflation," Burns was skeptical about using monetary policy to restrain inflation, arguing that printing money was equivalent to printing jobs.

 "Many of those who today are worried about the cost of living," he wrote, "will be worried still more about their jobs if unemployment spreads." He thought, "A credit policy that is sufficiently restrictive to bring down the price level ... would in all likelihood bring down also the volume of employment." Therefore, said Burns, "it would be unwise to depend on the Federal Reserve System as our sole or principal guardian of the stability of the dollar." But who else should be held responsible for preserving the value of Federal Reserve notes? Continued...