SYLVIE DOUGLIS, BYLINE: This is PLANET MONEY from NPR.

These are uncertain economic times. Most people have jobs and money to spend, but certain things are getting harder to find. Prices are going up for food and gasoline. And this is turning into a big political problem. Just ask the president.

FRANKLIN D ROOSEVELT: Some call it inflation, which is a vague sort of term, and others call it a rise in the cost of living, which is much more easily understood by most families.

WONG: Yes, this is 1942, and that is President Franklin Delano Roosevelt in a fireside chat describing inflation as a serious threat to the entire economy.

ROOSEVELT: If the vicious spiral of inflation ever gets underway, the whole economic system will stagger.

The context at that time - America had been at war for less than a year. The outcome felt completely uncertain. The country's young men were overseas fighting our enemies, and FDR was saying there's an enemy at home, too - rising prices - and every American should fight that enemy with the same vigor.

WONG: But how does fighting inflation actually work? Like, when I think about the inflation we're living through now, I don't have control over gas prices. The Federal Reserve is not asking for my input. Inflation feels like something that just happens to us.

ARONCZYK: But the message for Americans during World War II was kind of the opposite - that we can do something about inflation and that we should. The Roosevelt administration enlisted housewives, business owners, Hollywood stars, even cartoon characters. No matter who you were, the message was it is your patriotic duty to fight inflation. If you pitch in, you will help win the war.

(SOUNDBITE OF DENIS WRIGHT'S "EMPIRE JUBILEE MARCH")

WONG: Hello, and welcome to PLANET MONEY. I'm Wailin Wong.

ARONCZYK: And I'm Amanda Aronczyk. You've heard about the Greatest Generation and Rosie the Riveter. But do you know the story of how the U.S. government embarked on a national group project to fight inflation?

WONG: Today on the show, we go back to a moment that is hard to imagine today, when the U.S. government worked its way into the minute details of daily American life, dictating everything from our grocery shopping to our fashion choices, all in the name of vanquishing high prices.

ARONCZYK: What that looked like and why it never happened again.

(SOUNDBITE OF DENIS WRIGHT'S "EMPIRE JUBILEE MARCH")

WONG: It's World War II. There is fighting raging overseas. And at home, FDR is asking all Americans to join together to steady the economy.

ARONCZYK: The group project he's pushing starts with a couple of assignments that seem manageable. But over time, the asks get bigger, the tentacles extend. And by the end of the war, American economic life winds up looking very different than it does today - less free market, more centrally planned.

WONG: And the thing driving it all is worry over inflation, a loss in purchasing power. The way economists often talk about inflation is too much money chasing too few goods.

ARONCZYK: A lot of demand, not enough supply. And that makes prices go up.

WONG: The reason the Roosevelt administration was worried about inflation was that going to war meant drastically changing the stuff the country produced. Clothing companies stopped making women's girdles and started making parachutes. Car manufacturers started making tanks instead.

MEG JACOBS: They were turning out something like 4.5 million cars. And then all the sudden, that just stopped.

WONG: Meg Jacobs is a historian at Princeton University. She says the U.S. military needing so many supplies rearranged the whole economy.

JACOBS: If you're sending half a billion pairs of socks and 250 million pairs of pants to the military, those are goods that consumers are not going to be able to buy.

WONG: But those consumers really want to buy some fancy new goods because at the same time...

JACOBS: You have all of these workers who are hired to make the planes, make the socks, make the pants, and they now have money in their pocket.

ARONCZYK: Remember, the U.S. is just coming out of the Great Depression. There are people who have been out of work for years. Now they have money, but not enough things to buy, not enough things to spend that money on.

WONG: Because the U.S. didn't just stop making things like cars and appliances. The government also did away with lots of little frills.

JACOBS: They issue an order to stop making double-vested suits and pants with cuffs on them because that takes up extra fabric.

WONG: The single-breasted suits with no cuffs were called victory suits.

ARONCZYK: Stylish and cost effective. Now, at the time, economists actually calculated how much money people had that they couldn't spend because there wasn't enough stuff to buy. It added up to tens of billions of dollars.

WONG: When I think about this, I picture, like, this liminal space where all of these ghostly phantom refrigerators and vacuum cleaners and cuffed pants are floating around - things that people would've bought, except they never got made.

ARONCZYK: So those tens of billions of dollars - that is one cause of inflation. Another one - the Roosevelt administration needed to raise a lot of money for the war.

JACOBS: This is going to be the greatest expense that the American government has ever undertaken. And so very early on, the question is, how are we going to pay for the war? And in the end, the answer ends up being about half from bonds and half from taxes.

ARONCZYK: You might hear that and think, well, yeah, that's how governments finance things - by selling bonds or collecting taxes. But the way the Roosevelt administration approached it, they were funding the war while also trying to deal with inflation - that problem of too many dollars chasing too few things.

WONG: In 1942, the government rolls out the mass income tax. Before this, only the wealthiest Americans are paying it. So FDR scales that up.

ARONCZYK: The goal is, yes, to raise money for the war and also to soak up some of those extra dollars that people were earning. The income tax was so new for middle-class Americans the government had to go around telling people that forking over part of their paycheck was the right thing to do. They even got Donald Duck to model patriotism by paying his income tax.

(SOUNDBITE OF FILM, "THE SPIRIT OF '43")

CLARENCE NASH: (As Donald Duck) Oh, boy. Oh, boy. Oh, boy.

UNIDENTIFIED NARRATOR #1: Well, now what are you going to do, spend for the Axis or save for taxes?

WONG: So in that big group project to fight inflation that we talked about, this was assignment No. 1 - pay your income tax. And the government made this really easy by introducing automatic paycheck withholding.

ARONCZYK: That way, the government got the money before the worker did, so there's no chance of that worker running off and trying to spend it on stylish new cuffless pants.

WONG: Donald Duck - famously, no pants at all. Now, the bond side of funding the war and fighting inflation - that worked just like regular government savings bonds. You buy a bond from the government now, you get more money back later - except these bonds had snazzy branding. They were war bonds.

ARONCZYK: So assignment No. 2 was buy as many war bonds as you possibly can. Help our soldiers overseas now, and you can look forward to a giant postwar shopping spree.

JACOBS: Save democracy. Buy a bond for $18.75, you'll get $25 back after the war. It'll be a good investment. And if we win, you can buy all the stuff that you weren't able to buy in the 1930s during the Depression, like washing machines and dishwashers and - well, I guess televisions would come later, but...

WONG: A nicer radio, maybe, to listen to your fireside chats on.

ARONCZYK: These bonds had an additional purpose. They didn't just help pay for the war. They took money from people's pocketbooks and got them to save it. The government even had a suggested target - 10% of your paycheck should go to war bonds.

WONG: Getting people to save all that money, of course, tamps down inflation. And this is where the government went all-in on its propaganda campaign, making a historic push to get people to buy these bonds. It was basically nonstop advertising and publicity stunts for years.

ARONCZYK: FDR kicked it off by buying the very first war bond in a national radio broadcast.

UNIDENTIFIED PERSON #1: And the first savings bond is being made out in the name of Mrs. Roosevelt as beneficiary.

WONG: And they were available everywhere. You could pay for them with a payroll deduction. But if that didn't work for you, you could also buy them at department stores, movie theaters, from your newspaper boy.

ARONCZYK: Even kids could take part. They could buy stamps for, like, 10 cents or a quarter. And when little Sally filled up her stamp book, she could trade it in for her very own savings bond. Everywhere you turned, a chance to buy war bonds and the message that you really should. A soldier's life depends on it.

UNIDENTIFIED PERSON #2: How much does it cost to fight a war 12,000 miles away? Well, before you begin counting the billions of dollars, remember, it cost this man his life. We can cut down the cost of life by buying war bonds.

WONG: It wasn't just the government pushing war bonds. Businesses got on board. Newspapers donated ad space, and ad agencies worked for free. DC Comics even published special covers where Superman, Batman and Robin are all hawking war bonds. And Hollywood stars signed up, too - Judy Garland, Harpo Marx, Veronica Lake, popular singing sensations The Andrews Sisters.

(SOUNDBITE OF SONG, "ANY BONDS TODAY?")

THE ANDREWS SISTERS: (Singing) Any bonds today?

JACOBS: This involves recruiting Irving Berlin, the famous songwriter, to write a song, "Any Bonds Today?" which was a play on a song, "Any Yams Today?"

WONG: Like the sweet potato?

WONG: So we had a song about sweet potatoes.

JACOBS: We had a song about sweet potatoes that was repurposed to raise bond - sell bonds in World War II.

(SOUNDBITE OF SONG, "ANY BONDS TODAY?")

THE ANDREWS SISTERS: (Singing) Here comes the freedom man. Can't make tomorrow's plan - not unless you buy a share of freedom today.

WONG: I have to mention that when Irving Berlin wrote "Any Bonds Today?" the copyright actually went to Henry Morgenthau, the U.S. Treasury secretary.

ARONCZYK: Nice, a side hustle.

ARONCZYK: So those were assignments one and two in the national group project to fight inflation - the income tax and the war bond.

WONG: Do these things work? Are they enough?

JACOBS: So that's a really good question, and the answer is no. So even if the bond campaign and the implementation of mass taxes sucks a lot of purchasing power out of these newly flush workers, it's still not enough to keep the lid on prices.

WONG: The government was borrowing and spending a lot - more than it had ever borrowed and spent before. Factory wages and corporate profits kept rising, and so did prices.

ARONCZYK: In just the first three months of 1942, food prices went up 5% and clothing prices went up 8%. There it was - inflation.

WONG: So the government needed to get a handle on it before it got worse, reassure Americans that the economy was not going to spin out of control, which meant it was time for some new assignments.

(SOUNDBITE OF ERIC COATES' "CALL TO WORK")

ARONCZYK: And watch out because now the government is really going to be all up in your business. That's after the break.

(SOUNDBITE OF ERIC COATES' "CALL TO WORK")

ARONCZYK: It's April 1942, and FDR gets on the radio to give an update on inflation.

ROOSEVELT: My fellow Americans, it is nearly five months since we were attacked at Pearl Harbor.

ARONCZYK: The news was not good.

WONG: Government spending on the war - the main thing driving inflation - stood at $100 million every day for all those weapons and battleships.

ARONCZYK: And that astronomical number is only going up. And it could spell disaster for the economy. But don't worry - FDR - he's got a plan.

ROOSEVELT: First, we must, through heavier taxes, keep personal and corporate profits at a low, reasonable rate.

WONG: OK. We all keep paying income tax - check.

ROOSEVELT: We must put more billions into war bonds.

WONG: Whew, that's a lot. But OK. We keep buying even more war bonds - check.

ROOSEVELT: We must fix ceilings on prices and rent.

WONG: Yeah, OK. We need price ceilings. Wait, what?

ARONCZYK: Price ceilings - what FDR was doing in the sit-down with the American public is rolling out general maximum price regulation, soon to be known as General Max.

WONG: And General Max froze prices on pretty much anything you might buy on a given day - bananas, men's suits, used cars, rent.

ARONCZYK: With the introduction of General Max, businesses were told whatever price you sold this for last month - that is the ceiling, and you cannot go over it.

WONG: And so buckle up for assignment number three. Fight inflation by force of will. Throw the free market out the window. Ignore the normal rules of supply and demand.

ARONCZYK: And this is where things start to get really strange in the war against inflation - because if the government isn't going to let the market set prices, it has to do it.

WONG: The government has a new federal agency called the Office of Price Administration - OPA for short. And before long, the OPA is not just enforcing the price freeze. It's actually setting prices, standardizing them.

ARONCZYK: Historian Meg Jacobs says that the stores had to print up maximum price lists for every little thing, down to different brands of soap and shaving cream.

JACOBS: You would go into a restaurant, for example, and if you wanted to order, you know, a cup of soup, the price of that cup of soup was listed right there on an official OPA price list. It would just be posted right on the wall.

ARONCZYK: Now, you might be thinking, price ceilings, a limit on what I have to pay for things; that doesn't sound so bad.

WONG: But here's the thing. If normal supply and demand would set the price of a cup of, let's say, tomato soup at 20 cents, but the restaurant is only allowed to charge 17 cents, you start to see all kinds of effects from that.

ARONCZYK: So you're a customer, and you're like, wow, 17 cents. That is a really good deal on tomato soup. I will take a bunch of cups of tomato soup. Because it is so cheap, (laughter) I can't stop buying tomato soup.

ARONCZYK: So the price ceiling actually pushes demand higher.

WONG: But at 17 cents, the restaurant isn't making that much for its tomato soup because in a normal market, that soup is actually worth 20 cents. So what does the restaurant do? It makes less tomato soup.

ARONCZYK: Oh, no - tomato soup shortage.

WONG: And when there are shortages, that leads to hoarding and maybe even a black market where you can indeed pay your 20 cents and get your tomato soup under the table.

ARONCZYK: And this is how we get to assignment number four - rationing. Now, the wartime economic system did not hinge on soup, but the government was worried about the soup scenario playing out with things that everybody wants, like butter and sugar, or things that they need for the war effort, like tires and gasoline.

WONG: I talked about this with another historian, Mary Mahoney. Her grandmother used to tell her stories about life during World War II.

MARY MAHONEY: My grandmother was a character, as we might say. When I knew her, she wore matching sweatsuits every single day with White Nikes and a gold chain.

WONG: Oh, my gosh (laughter).

MAHONEY: I like to say (laughter) she dressed like the fourth member of Run DMC.

WONG: Mary's actually named after this grandmother, her mom's mom. That Mary was 16 when rationing started.

MAHONEY: Something that she perfected over the course of the war was taking an eyebrow pencil and drawing a line down the back of each one of her legs because she couldn't have nylons, which, you know, she really missed.

WONG: You know how old-fashioned pantyhose had seams up the back?

ARONCZYK: Oh, yeah. I'm wearing a pair of those right now, maybe.

ARONCZYK: So the thing about rationing - it's not just that nylons and certain creature comforts are hard to find. It's that the government is setting limits on what people can buy.

UNIDENTIFIED NARRATOR #2: Here's an example of how point rationing works. This lady all decked out with her family's brand-new ration books starts out to do some shopping. First of all, she wants to buy a can of peas.

WONG: So when this lady went to the store to buy peas, she was no longer just thinking about the price she had to pay. She was also thinking about how many ration points she had in her government-issued coupon book.

UNIDENTIFIED NARRATOR #2: Everyone will get 48 points each period. That means you will use blue stamps ABC for the first period, DEF for the second, and so forth.

WONG: It was complicated. And when you ran out of stamps, that was it. You could not buy any more rationed goods until you got your next ration booklet.

ARONCZYK: With these restrictions, housewives had to get creative. Women's magazines suggested sometimes questionable substitutions, like peanuts instead of ground beef, corn syrup for sugar.

MAHONEY: Because of the sugar and the butter involved, a birthday cake was a big treat.

WONG: Have you ever tried to make any of those recipes?

MAHONEY: I did attempt to make one with my (laughter) wife. It came out looking sort of like a normal sheet pan cake you might make with a mix. It was only when we cut into it that it seemed incredibly dense.

MAHONEY: You know, if during the war we were conserving rubber, you have to wonder if we were romanticizing that by putting the texture into the cake.

MAHONEY: It was fine, but...

WONG: Fine sounds like a - perhaps an overstatement.

MAHONEY: Well, listen. I will eat any cake, and I did that day.

ARONCZYK: So most people got on board with rationing. After all, the country was at war. People could go without cake. Plus, the Great Depression had just happened. Americans were used to scarcity and privation - doesn't mean that they liked it, though.

WONG: And there were some people who did not go along. Black markets popped up. Businesses evaded price controls by shrinking the size of their products or making their products worse, swapping corn oil for olive oil and dried grass for tea.

ARONCZYK: The most obvious kind of evasion was businesses ignoring price ceilings and just charging whatever they wanted.

WONG: And so the next step in the government's fight against inflation/bureaucracy spiral was assignment number five - keep an eye on your local stores. And if you spot any funny business, report it to the Office of Price Administration.

JACOBS: The government set up local OPAs. That's what they were called - little OPAs. And so you have these sort of phalanx of housewives who would sort of make sure that the local butcher was complying with price ceilings. So it required that kind of participation from ordinary consumers to enforce.

ARONCZYK: There were ultimately more than 5,000 of these little OPAs around the country - a whole national network of nosy neighbors. And they filed numerous reports.

JACOBS: If you go to the National Archives, you can just see the complaints bulging out of boxes.

ARONCZYK: There was even a radio broadcast where the head of the OPA opened up the mailbag, and there were actors there to dramatize the pile of grievances. This one came from Brooklyn.

UNIDENTIFIED ACTOR: (As character) I heard over the radio about this nylon stocking card I could get by writing to you. The girl in the store said there were no nylons, but I said she better not charge high prices, or the government will get you.

ARONCZYK: I think that's my Aunt Alice.

WONG: The government's inflation-fighting slogan during this time was hold the line. Hold the line on prices, on consumption and also, importantly, on wages, because more money in workers' pockets would mean more demand for scarce stuff, which then drives up prices.

ARONCZYK: And that could create the dreaded wage-price spiral. Prices go up, so workers demand higher wages. Then companies raise prices to cover those higher labor costs, which makes the cost of living go up, and on and on and on. Sound familiar?

WONG: The Roosevelt administration really didn't want that. And that brings us to the sixth and final assignment. FDR got the big labor unions to agree to two key things - no strikes and limits on wage increases.

WONG: But it worked. From mid-1943 onward, prices stayed under control through the end of the war.

ARONCZYK: Eventually, though, any group project wears thin, and a few pretty big things happened. In 1945, FDR passes away. And a few months later, the war ends. By this point, businesses are fed up with all of this government meddling, and they convince the public that they should be, too.

WONG: So this national effort to fight inflation - it starts with recognizable economic policies - taxes, bonds - and then it grows to include things that would be complete nonstarters today - pervasive price controls, rationing, wage freezes. And what strikes me when I read about this time is FDR asked Americans to do something that today feels very un-American. Demand less. Consume less. Accept scarcity.

ARONCZYK: Yeah. That is not how we deal with inflation today.

WONG: In the 1950s, another institution stepped in to take over the job - the Federal Reserve. And that leads to how we manage inflation now, not through making you buy war bonds or capping the price of your tomato soup, but through far more abstract mechanisms, like interest rates. We've moved on from fireside chats calling us all to the fight against inflation. Now we watch from the sidelines as the Fed handles the assignment.

(SOUNDBITE OF CLIFF HAYWOOD AND PAUL REEVES' "SOPHISTICATS")

WONG: If you're involved in a group project to fight inflation, we would love to hear about it. Email us at planetmoney@npr.org, or find us on social media. We're @planetmoney.

ARONCZYK: Today's show was produced by Emma Peaslee and mastered by Isaac Rodrigues. It was edited by Molly Messick. PLANET MONEY's executive producer is Alex Goldmark.

WONG: Special thanks to Mark Wilson, Andrew Bossie and Michael Klein. Mary Mahoney co-hosts a podcast called "American Girls," and you can find that wherever you're listening to this show.

WONG: And I'm Wailin Wong. This is NPR. Thanks for listening.

(SOUNDBITE OF CLIFF HAYWOOD AND PAUL REEVES' "SOPHISTICATS")

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