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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (45904)	2/6/1999 2:35:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Coby, Yup, it was all caused by interest rate changes, and jawboning. The critical crunch was when Jim Baker went to Europe and told everyone that the dollar was overvalued. That started a run and then the Fed lowered rates to make it a panic. Of course, interest rates don't live in a vacuum. Part of the problem was the govt. (both the administration and Congress were equally guilty) lowering tax rates while increasing spending, leading to a huge increase in the deficit and debt load, the latter of which we are still increasing today. There was a lot going on in those days. Along with the Laffer Curve actually being given some credibility. MB