At 3:17 PM 6/14/95, James Devine wrote: >Is it correct to date the transition to banker power the fall of >the Bretton Woods fixed-exchange rate system? I would guess that >the rise of the US budget deficit (which also gives the central >banks and money-lenders more power) was a later intensification >of what has been happening since the early 1970s. (You also get a >different story if you look at the underdeveloped nations: there, >the early 1980s debt crisis is the turning point.) Bill Wolman, the chief economist of both Business Weak and CNBC, says frequently on the latter that we live in a world of weak governments and strong central banks. I think he's right (even though he was the guy responsible for BW's infamous "Death of Equities" cover around 1979, just before the great bull market of Aug 1982-? took off). We even have central bankers taking over governments, as in Italy. I think it took a while for the CBers to get their act together, however. The period from the beginning of the end of Bretton Woods to the ascendancy of Volcker was a time of great monetary instability. But starting with Volcker in late 1979, the CBers finally mastered the art of running a politically managed monetary system on a basis more flexible than gold in a crisis - witness how deftly they've handled the S&L crisis, the 1987 stock market crash, the Mexican melodramas of 1982 and 1994, and probably many other near-meltdowns we don't even know about - but in non-crisis times, about as austere as gold. By the way, as Penny Ciancanelli put it, rather nicely I think, the Third World got a Fisher-style deflation, while the First World gets Minsky management. Doug -- Doug Henwood [[EMAIL PROTECTED]] Left Business Observer 250 W 85 St New York NY 10024-3217 USA +1-212-874-4020 voice +1-212-874-3137 fax
