RE: Dr. Paul Volcker
It may come as a shock to you, but Volcker was appointed Chairman of the Federal Reserve by President Jimmy Carter. President Ronald Reagan pushed for tax cuts in the teeth of the terrible recession caused by Volcker's pig-headed, but heroic clamp down on monetary expansion. I do not think any other man could have withstood the hatred directed at him during the sharp and terrible recession that resulted. Many economic historians blame the slow decline of inflation during the 1980's, the collapse of American trade balance in the '80's, and the explosion of the budget deficit on Reagan's tax cuts -- too much too soon. By pushing the budget into deficit, Reagan, the greatest Keynesian in history, delayed control of inflation and counteracted monetary tightness.
By the way, Greenspan inherited the October 19, 1987 crash which was directly caused, in the opinion of many experts, by my old classmate James Baker, Secretary of the Treasury. |
