NEW YORK — Paul W. McCracken, a moderate Republican who served as an economic adviser to both Republican and Democratic presidents and who led former President Richard M. Nixon’s largely unsuccessful effort to tame the rising inflation of the late 1960s and early 1970s, died Friday in Ann Arbor, Mich.
He was 96.
His death was announced by the University of Michigan, where he had taught for most of his career.
A wide-ranging thinker, Mr. McCracken was part of a postwar generation of economists who believed that government should play an active role in moderating business cycles, balancing inflation and unemployment, and helping the disadvantaged.
His nearly three years at the White House coincided with a turbulent era marked by rising deficits, rampant inflation, the imposition of wage and price controls, and the breakdown of the system of fixed exchange rates that had governed the world’s currencies since World War II.
Inflation has ‘a socially disintegrating effect through its tendency to escalate group tensions.’
As a result, by the early 1980s, Mr. McCracken, like other economists, questioned the Keynesian assumptions that had been dominant since the war.
He concluded that high inflation had resulted from ‘‘a cumulative paralysis in our will’’ and called for greater fiscal discipline to limit the growth of government spending — a topic that continues to vex Washington.
“Government was never during the 1970s able to bring itself to meet the first fundamental requirement of a successful price-stabilization policy — namely, that its policies, quite simply, would not accommodate inflation,’’ Mr. McCracken wrote in 1980.
In fact, at that moment the Federal Reserve, under a new chairman, Paul A. Volcker, had begun to raise interest rates sharply, producing back-to-back recessions, in 1980 and 1982, that at last broke the back of inflation, but at the cost of painfully high unemployment.
Paul Winston McCracken was born on Dec. 29, 1915, in Richland, Iowa. His father, a farmer, and his uncle, an 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 Emily Ruth Siler, a student teacher.
They married in 1942, the same year Mr. McCracken received a master’s from Harvard in economics and went to work at the Commerce Department in Washington.
From 1943 to 1948 he was a researcher at the Federal Reserve Bank of Minneapolis, while completing a PhD, also at Harvard.
Then he joined 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 from 1956 to 1959 under former President Dwight D. Eisenhower. He advocated unsuccessfully for a tax cut to stem a major recession in 1957-58 and later said that the administration’s hands-off approach to the economy had helped bring on another recession, in 1960-61, and cost Nixon, Eisenhower’s vice president, the 1960 presidential election.
While a professor, Mr. McCracken served two Democratic presidents: John F. Kennedy, as a member of a task force on the domestic economy, and Lyndon B. Johnson, as part of a commission on budgetary accounting.
After winning the 1968 election, Nixon summoned Mr. McCracken to a meeting in New York. Asked to be chairman of the Council of Economic Advisers, Mr. McCracken said he should call his wife, but Nixon replied: ‘‘I have a press conference in a few minutes, and I don’t really have much to tell them. Why don’t we just announce it there.’’
The president described Mr. McCracken as ‘‘a centrist, a man who is pragmatic in his economics.’’
Working for Nixon, Mr. McCracken was confronted with an inflation rate that had been rising since 1965, a byproduct of the deficits that the federal government had amassed during the Vietnam War.
In a speech in August 1969, he said inflation had ‘‘caused severe social and economic damage’’ and ‘‘had a socially disintegrating effect through its tendency to escalate group tensions.’’
He also called for expanding unemployment insurance, reorganizing workforce training, exempting the poor from federal income taxes, and improving mass transit — positions that reflected the dominant liberal consensus of the times.
Mr. McCracken represented a middle ground between Johnson’s advisers, who had advocated ‘‘fine-tuning’’ tax policies to regulate the economy, and the conservative, laissez-faire approach of the Chicago school, led by Milton Friedman.
Mr. McCracken became the architect of a policy of gradualism, which sought to slow inflation by reducing growth slightly, without causing a recession.
Mr. McCracken returned to Michigan at the end of 1971.
He was the Edmund Ezra Day distinguished university professor of business administration until his retirement in 1986.
He leaves two daughters, Linda Langer and Paula McCracken.
His wife died in 2005.