VLVL2 (15): None of the Usual Civilians

[R. Fiero]

Dave Monroe wrote:
>"... something about the light, the angles flattened
>out and the atmosphere thickened, wasn't right--glare,
>location, something.  Rumors filtered back from the
>cabin that the air controllers down there sounded like
>they used to in Vietnam, none of the usual civilians
>were on the job, and there was heavy traffic on all
>the military frequencies."  (VL, Ch. 15, p. 355)
>
>
>"sounded like they used to in Vietnam"
>
>How was that?  Let me know ...
>
>
>"none of the usual civilians"
>
>In August 1981, Ronald Reagan took an uncompromising
>stand against striking air-traffic controllers who
>threatened to shut down the nation's airlines. The
>striking workers complained of growing demands and
>dangerous levels of stress on the job. Their issues
>centered on wages, retirement benefits and hours.
>  . . .

Not sure that the militarization of the air traffic controllers 
is entirely due to the decertification of PATCO the union.  I 
think it refers solely to the actual militarization of the 
local airspace.  Although it all works together.  After '70 or 
so there were a lot of Vietnam veterans unsuited for any sort 
of useful civilian work but meanwhile the cops had been 
paramilitarized and could use an influx of folks who'd been 
deprogrammed in normal civil distaste for personal 
violence.  Wages were sticky in price and inflation was rampant 
for various reasons.  Possibly Johnson's guns and butter 
policies.  The US was Thatcherized somewhat.  Unions were 
busted routinely and this is where Bechtel and Brown & Root got 
a better grip on large projects such as power plants using scab 
workers.  Borrowing rates rose to dampen things significantly 
-- folks were happily laid off and fired all around.  Strong medicine.
==========
QUESTION: How bad was the economic situation when you took 
office at the Fed in 1979?

PAUL VOLCKER: Well, by the standards of a lot of countries, by 
Latin American standards, it wasn't so bad. But the inflation 
rate had gotten into double digits, more than 10 percent. 
Double-digit inflation is a terrible thing - and it got up to 
14 or 15 percent on a monthly basis for a while, shortly after 
I became chairman of the Fed.

It was the biggest inflation and the most sustained inflation 
that the United States had ever had. We had had brief periods 
of inflation, but this had built up over more than a decade 
rather continuously. It was getting worse, rather than getting 
better. And so that rather infected people's thinking.

You could not buy a house in those days without just assuming 
that the house was not only a place to live, but it was a good 
investment, because it was going to keep up with inflation or 
get ahead of inflation, and it was just - that was America. You 
bought a house, and it went up in price.

QUESTION: Why is that bad?

PAUL VOLCKER: Well, it's not bad if that's all that happened. 
Housing is only one part of the economy. When people begin 
anticipating inflation, it doesn't do you any good anymore, 
because any benefit of inflation comes from the fact that you 
do better than you thought you were going to do. Once you begin 
anticipating it, it no longer has any stimulative impact.
==========

Then there was the notion of running government like a 
businesss that allowed Brock Vond his unchecked freedom.
The profitable game of drug-related asset confiscation is 
mentioned in another Dave Monroe post.  Let's see.... drugs for 
money for arms for Contra wars.  Or was it the other way around?