US Federal Reserve, argued that the only way to put an end to inflation was to dramatically raise interest rates, clamping down on the supply of money in order to recuperate its value. During the Reagan administration, Volcker jacked up interest rates from the low single digits to as high as 20 per cent. This caused a massive recession, as it dramatically increased the costs of doing business. As businesses laid off workers, unemployment rates shot to over 10 per cent. This decimated the power of organised labour, which had been the crucial counterbalance to the excesses that had led to the
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