Abstract

The Tight-Money Men

The article focuses on the book "Secrets of the Temple: How the Federal Reserve Runs the Country," by William Greider. Greider's "Secrets of the Temple" may be the most important political book of the 1980s. To stop inflation, interest rates would of course have to climb high enough to throttle down the economy. Everyone involved knew that. So, the political beauty of monetarism was in its depersonalizing this process. Monetarism would keep the political beat of raising interest rates off the Federal reserve-for under monetarism, the rates would soar not because the Federal Reserve Board had specifically decreed it but rather because foolish borrowers bid up the price of the available supply of money. Greider notes that the inflation crusade also had an ancillary effect-driving up the value of the dollar-that magnified the agony it imposed on the U.S.