Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Joe NYC who wrote (129790)	12/16/2000 8:53:20 AM
From: combjelly	Read Replies (1) \| Respond to of 1571281

"Don't you think that when you write a message with such sweeping claims or conclusions" Umm, what is unconventional? Volcker was an old-school economist, he instituted conventional economic solutions to get the inflation of the '70s under control. Interest rates were raised which caused the economy to slow down and unemployment to rise, this is well understood and common, just look at what Greenspan did. The downside of this is that it is painful, especially for the unemployed. The Reagan administration addressed this by cutting taxes and raising spending, no matter how you dress it up with ideology, running deficits will give a boost to the economy but it is also inflationary. The thing that kept inflation under check during this period was that the economy was undergoing a re-alignment during that time. Computers were finally having an effect on productivity and many companies were starting to use them to flatten the hierarchy and the downsizing started. This kept unemployment higher than it might have been otherwise. Now Volvker did not really realize this was happening, and he started to agitate to reduce the deficit spending, and/or raise taxes to avoid inflation. The Reagan administration was unwilling to do this for a variety of reasons, mainly political. My assumption during this time was Volcker could see that problems were in the cards for the future, and he decided to bail out rather than take the blame by having to raise rates and choke off the economy to keep inflation down. Greenspan came in and he was able to convince Sir George the Old to take the bullet and raise taxes, since spending is a whole lot harder to control. Unfortunately for GB, the Soviet Union picked that moment to collapse and Congress wound up cutting spending anyway. Which hosed the economy. So what is unconventional here?