Former Federal Reserve Chairman Paul Volcker Endorses Obama

Less appreciated, although perhaps most effective, were the policies of Paul Volcker, which Reagan strongly supported. Volcker raised interest rates to 16.4 percent in 1981, plunging the US into a deep recession. Christian Parenti quotes Volcker telling the New York Times the recession was necessary because 'the standard of living of the average American has to decline.' Parenti shares authors Harrison and Bluestone's assessment of the recession, which, according to them,
Did precisely what it was designed to do. With more than ten million people unemployed in 1982 it was impossible for organized labor to maintain wage standards let alone raise them Essentially, with wage growth arrested by unemployment, what growth occurred during the Reagan period rebounded mostly to the profits side of the capital-labor ledger.

http://www.counterpunch.org/sherman06112004.html

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The Carter dollar confidence crisis

This second phase, the post-gold era, fuelled by the manipulated 1973 oil shock and US pressure on Saudi Arabia and OPEC to price oil exclusively in dollars, Kissinger’s “petro-dollar recycling,”8 rolled along without major trouble until early 1979 when the dollar faced a major foreign sell-off during the end of the Jimmy Carter Presidency. The American Century faced one of its greatest challenges at that juncture. German, Japanese even Saudi Arabian central banks began dumping US Treasury holdings in what was called a loss of “confidence” in Carter’s world leadership role.

In August 1979, to restore world “confidence” in the dollar, President Jimmy Carter, himself a hand-picked protégé of David Rockefeller’s Trilateral Commission, was forced by the big New York banks, led by David Rockefeller’s Chase Manhattan, to accept Paul Volcker, a protégé of Rockefeller’s from Chase Manhattan Bank, as new Chairman of the Federal Reserve with an open mandate to do what was necessary to save the dollar as reserve currency.

On taking office, Volcker bluntly announced, "the standard of living for the average American has to decline." He was Rockefeller’s hand-picked choice to save the New York financial markets and the dollar at the expense of the nation’s welfare.

The Volcker ‘shock therapy’

Volcker’s shock therapy, begun in October 1979, lasted until August 1982. Interest rates shot through the roof to double digits. The US and world economies were plunged into a monster recession, the worst since World War II. Within a year, the prime rate had shot up to the unheard-of level of 21.5%, compared to an average of 7.6% for the fourteen previous years, a more than threefold rise in weeks. Official US unemployment peaked at 11%, while unofficially when those who simply had given up seeking work were counted, it was far higher.
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http://www.globalresearch.ca/index.php?context=va&aid=7813