In 1970, the then-US president Richard Nixon appointed economist Arthur Burns as head of the Federal Reserve, the US central bank. "I respect his independence," said Nixon. "However, I hope that independently he will conclude that my views are the ones that should be followed." Burns duly kept interest rates low ahead of the 1972 election to avoid an economic slowdown and thus keep Nixon in the voters' good books. Nixon won, but the mixture of an overheated economy and loose monetary policy helped give rise to the stagflationary grimness of the 1970s.
Since then, presidents, prime ministers and politicians in general have tried to keep their interventions in monetary policy to a minimum. Indeed, central-bank independence (across most of the developed world at least) has become a cornerstone of modern economic policy.
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