[Marxism] Reliability of Data

Patrick Bond pbond at mail.ngo.za
Sun Mar 19 21:03:18 MST 2006


----- Original Message ----- 
From: <i.lagardien-alumni at lse.ac.uk>
While I do not make excuses for irresponsable African leaders, I think
that the crucial variable was the very high interest rates of the early
Reagan years. Reagan wanted to cut taxes and control inflation at the
same time.  African countries that had to renegotiate debts found
interest rates had doubled or tripled. Even countries that had tried to
avoid the debt trap, like Tanzania,  were caught in it.

***

Comrade Ishmael, you're absolutely right on the importance of high real 
interest rates during the 1980s, and especially their implications for the 
Third World. But they began soaring in late 1979, after newly-installed Fed 
chair Paul Volcker announced his intention at the Sarajevo WB/IMF Annual 
Meetings to global financial bigwigs. Volcker, a former Nixon admin official 
and top Chase banker, was given the job by Jimmy Carter; he replaced the 
industrialist G.William Miller. A major reason Carter lost the presidency in 
November 1980 was Volcker's economic shock, the worst economic downturn 
since 1938. 





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