ITWASSOOTED: have another shit sammy from dems and Volcker

Friday, November 07, 2008

have another shit sammy from dems and Volcker

“[Volker] engineered a draconian shift in U.S. monetary policy. The long-standing commitment in the U.S. liberal democratic state to the principles of the New Deal, which meant broadly Keynesian fiscal and monetary policies with full employment as a key objective, was abandoned in favour of a policy designed to quell inflation no matter what the consequences might be for employment. The real rate of interest, which had often been negative during the double-digit inflationary surge of the 1970s, was rendered positive by fiat of the Federal Reserve. The nominal rate of interest was raised overnight … Thus began ‘a long deep recession that would empty factories and break unions in the U.S. and drive detour countries to the brink of insolvency, beginning a long-era of structural insolvency’. The Volker shock, as it has since come to be known, has to be interpreted as a necessary but not sufficient condition of neoliberalism.”
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