Imposing the New World Order
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One of Reagan’s first acts as president in early 1981 was to use his powers of office to dissolve the trade union of the airline traffic controllers, PATCO. This served to signal other unions not to attempt to seek relief from the soaring interest rates. Reagan was mesmerized by the same ideological zeal to ‘squeeze’ out inflation as was his British counterpart, Thatcher. Some informed people in the City of London even suggested that a major reason for the Thatcher government’s existence in the first place was to influence the monetary policy of the world’s largest industrial nation, the United States, and to shift economic policy throughout most of the industrial world away from the direction of long-term nuclear and other industrial development. If that was in fact the plan, it succeeded. Six months after Thatcher took office, Ronald Reagan was elected. Reagan as president reportedly enjoyed repeating at every opportunity to his cabinet the refrain, ‘Inflation is like radioactivity. Once it starts, it spreads and grows.’ Reagan kept Milton Friedman as an unofficial adviser on economic policy. His administration was filled with disciples of Friedman’s radical monetarism, much as Carter’s had been with exponents of David Rockefeller’s Trilateral Commission.4 This entire radical monetarist construct, first advanced in the early 1980s by the British regime of Thatcher and soon afterwards by the U.S. Federal Reserve and the Reagan administration, was one of the most cruel economic frauds ever perpetrated. But its aim was other than what its ideological ‘supply-side’ economics advocates claimed. The powerful liberal establishment circles of the City of London and New York were determined to use the same radical measures earlier imposed by Friedman to break the economy of Chile under Pinochet’s military dictatorship, this time in order to inflict a devastating second blow against long-term industrial and infrastructure investment in the entire world economy. The relative power of Anglo-American finance was thus to become again hegemonic, they reasoned. What was to follow in the 1980s would have appeared inconceivable to a world which had not already been stunned and disoriented by the shocks of the 1970s. GUNBOAT DIPLOMACY AND A MEXICAN INITIATIVE It would be no exaggeration to say that there would not have been a Third World debt crisis during the 1980s had it not been for Margaret Thatcher’s and Paul Volcker’s radical monetary shock policies.
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