USFREEDOM911 (12-09-2019)
USFREEDOM911 (12-09-2019)
appointed By Carter and he slayed inflation
only idiots didn't like the sacrifices it took to slay inflation
medicine doesn't always taste GOOD
USFREEDOM911 (12-09-2019)
Callinectes (12-09-2019), Truth Detector (12-09-2019), USFREEDOM911 (12-09-2019)
because he KNEW Carter made a good choice
he was appointed to that position by Carter
he had never held the position before that
Carter trusted him to slay stagflation
Carter made the right choice
USFREEDOM911 (12-09-2019)
Trumpet (12-09-2019)
Inflation emerged as an economic and political challenge in the United States during the 1970s. The monetary policies of the Federal Reserve board, led by Volcker, were widely credited with curbing the rate of inflation and expectations that inflation would continue. US inflation, which peaked at 14.8 percent in March 1980, fell below 3 percent by 1983.[19][20] The Federal Reserve board led by Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well, which helped lead to the 1980–1982 recession,[21] in which the national unemployment rate rose to over 10%. Volcker's Federal Reserve board elicited the strongest political attacks and most widespread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of high interest rates on the construction, farming, and industrial sectors, culminating in indebted farmers driving their tractors onto C Street NW in Washington, D.C. and blockading the Eccles Building.[22] US monetary policy eased in 1982, helping lead to a resumption of economic growth.
Volcker's high interest rate caused immediate and drastic drops in investment into the real economy. One sector hit hard was machine tools. The birthplace of replaceable metal parts is New England, and in 1980 that region was still the center of the US machine tool sector. By 1981, firms that had been in business for a hundred years had steep layoffs, and major cuts in pay. At Brown and Sharpe in Rhode Island, violent conflict between striking workers and the police set in.[23] In Springfield, Vermont, Jones and Lamson went into steep decline and was sold by 1989 to a financial engineer (at one point, the president of J&L had been the Chair of Boston Federal Reserve).[24][25] In New Hampshire, Kingsbury Machine Tool went from 3 shifts a day with hefty bonuses to laying off hundreds between 1982 and 1989.[26]
The late seventies were a time when Japanese productivity was rising, so that internally to Japan, machine tools fell in price by 12%. The dollar should have depreciated given the relative fall in prices of Japanese tradables, so that the now-cheaper Japanese products would have remained at a price comparable to American-made products in US stores. Instead, precisely the opposite happened: The Volcker interest rate shock made the dollar appreciate in value. In effect, the Volcker shock put Japanese-made products on sale at US stores.[27] The US current account was in permanent deficit by the nineties. Volcker himself tried to remedy the situation by the Plaza Accord in 1986, which called for Germany and Japan to revalue relative to the US dollar.[28] The revaluation did take place, but perhaps by then too much damage had occurred in the industrial base, because the machine tool sector never recovered.
The combination of the Fed's tight money policies and the expansive fiscal policy of the Reagan Administration (large tax cuts and a major increase in military spending) produced large federal budget deficits and significant macroeconomic imbalances in the U.S. economy. The combination of growing federal debt and high interest rates led to a substantial rise in federal net interest costs. The sharp rise of interest costs and large deficits led Congress to take some steps towards fiscal constraint.[29]
Nobel laureate Joseph Stiglitz said about him in an interview:
Paul Volcker, the previous Fed Chairman known for keeping inflation under control, was fired because the Reagan administration didn't believe he was an adequate de-regulator.[30]
USFREEDOM911 (12-09-2019)
https://www.nytimes.com/1987/06/03/b...greenspan.html
VOLCKER OUT AFTER 8 YEARS AS FEDERAL RESERVE CHIEF; REAGAN CHOOSES GREENSPAN
By Robert D. Hershey Jr., Special To the New York Times
June 3, 1987
USFREEDOM911 (12-09-2019)
USFREEDOM911 (12-09-2019)
In economics, stagflation, or recession-inflation, is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment.
The term, a portmanteau of stagnation and inflation, is generally attributed to Iain Macleod, a British Conservative Party politician who became Chancellor of the Exchequer in 1970. Macleod used the word in a 1965 speech to Parliament during a period of simultaneously high inflation and unemployment in the United Kingdom.[1][2][3][4]
Warning the House of Commons of the gravity of the situation, he said:
"We now have the worst of both worlds—not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of "stagflation" situation. And history, in modern terms, is indeed being made."[3][5]
Macleod used the term again on 7 July 1970, and the media began also to use it, for example in The Economist on 15 August 1970, and Newsweek on 19 March 1973.
John Maynard Keynes did not use the term, but some of his work refers to the conditions that most would recognise as stagflation. In the version of Keynesian macroeconomic theory that was dominant between the end of World War II and the late 1970s, inflation and recession were regarded as mutually exclusive, the relationship between the two being described by the Phillips curve. Stagflation is very costly and difficult to eradicate once it starts, both in social terms and in budget deficits.
USFREEDOM911 (12-09-2019)
Responses[edit]
Stagflation undermined support for the Keynesian consensus.
Federal Reserve chairman Paul Volcker very sharply increased interest rates from 1979–1983 in what was called a "disinflationary scenario". After U.S. prime interest rates had soared into the double-digits, inflation did come down; these interest rates were the highest long-term prime interest rates that had ever existed in modern capital markets.[32] Volcker is often credited with having stopped at least the inflationary side of stagflation, although the American economy also dipped into recession. Starting in approximately 1983, growth began a recovery. Both fiscal stimulus and money supply growth were policy at this time. A five- to six-year jump in unemployment during the Volcker disinflation suggests Volcker may have trusted unemployment to self-correct and return to its natural rate within a reasonable period.
USFREEDOM911 (12-09-2019)
The cost of slaying stagflation was a mild recession
THAT is the recession Ronny Rayguns inherited from Carter
Many of you younger posters need to take a look at what stagflation was like to live in
I graduated HS in 1976
my adult future was immersed in stagflation from the moment I was truly aware of what the world offered me as I grew into adult hood
while I was in college the world l saw was double digit loan rates and an economy lying in a hole while everything just kept costing MORE
USFREEDOM911 (12-09-2019)
Carter was UNFAIRLY blamed
and hired the right people to fix it
Reagan won the election (well he also cheated in the election)
USFREEDOM911 (12-09-2019)
USFREEDOM911 (12-09-2019)
when I graduated HS a 30 year was 9 %
it grew to 17 percent as I neared house buying age
I was poor from a poor family
I thought I would never own a home
Volcker fixed it
USFREEDOM911 (12-09-2019)
So Carter wanted Volker to fix his fuck ups?
He isn’t the first democrat president to try to be bailed out by a fed chair
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