FORTUNE -- One of my most vivid memories from 1974 was the gas station at the foot of the hill below my Southern California high school -- car lines snaking out into the street, heralding the failure of the government's price controls and lame ideas such as odd-even rationing. That also was the year President Gerald Ford cooked up an equally goofy plan: Whip Inflation Now, or WIN.
As Ford unveiled WIN to a joint session of Congress on Oct. 8, his bulbous forehead gleaming with sweat, he truly believed he was giving voice to a momentous occasion -- on a par with F.D.R.'s call to action at the depth of the Great Depression. How could he know that, four decades later, people would still ridicule his pleas to farmers to grow more food, to citizens to "drive less, heat less," and -- the worst -- to supporters to wear those ridiculous WIN buttons that the smart set turned upside down to declare "Need Immediate Money"?
That government leaders would embrace such silliness -- it was Nixon who instituted the Stalinesque wage and price controls that set the stage for Ford's call to citizen action -- stands as a powerful testament to how much inflation unnerves the body politic. We haven't experienced real inflation in more than a generation, so this economic blight is mostly an uncertain stranger to pollsters and political strategists -- as well as to voters under 50. But if inflation warnings are right, this stranger could become the dark horse of the 2012 election and beyond.
We know that inflation distorts economic behavior. In the 1970s a combination of high tax rates and inflation prompted investors to flee production in favor of protection. "Give me shelter," recalls Michael Barone, principal co-author of the annual Almanac of American Politics, referring to not only tax behavior but also investments in assets like real estate to beat inflation rates. But inflation also affects voting behavior -- and could exacerbate already widespread anxiety and uncertainty about a struggling economy and President Obama's reaction to it. With rising prices on everything from big-ticket items like college tuition to food and gas, consumers "feel they don't have any safe ground to stand on," Barone notes.
As both President Carter and the late President Ford could attest, that's not a good place for an incumbent to be. John Huizinga, an economist at the University of Chicago, rightly notes that while unemployment affects some people -- and rattles many more -- "inflation affects everyone." Huizinga co-authored a 1982 study that opened with the conventional wisdom of that era: "It is well known ... that the public regards inflation as a more serious problem than unemployment." Looking back, that seems astonishing. While the double-digit inflation of the 1970s had inched down to 8%, unemployment at that time was still a whopping 9.7%.
By historical standards, the latest consumer price index showing a 1.2% annual rise remains super low. But consumers are being hit with hikes to two key components that aren't included in that number -- gas and food. Consumer Growth Partners recently called the rise in grocery prices (6.5% in the first quarter) "the sharpest in a generation." And gas prices are pushing toward $4 a gallon. Including gas and food, the annual inflation rate is more than double the rise in the CPI.
Even if systemwide inflation doesn't return in this election cycle, rising gas and food prices will be on the minds of voters. President Obama already faces an unemployment rate that has only recently slipped below 9%, worsened by long-term jobless rates unprecedented since World War II. The Congressional Budget Office now predicts an unemployment rate of 8.2% on Election Day 2012; no President since F.D.R. has been reelected with unemployment over 8%. (President Reagan, facing a similarly painful recession, was elected with a 7.2% jobless rate.)
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