Word: interest
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Dates: during 1970-1979
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...Private economists as ideologically diverse as Conservative Alan Greenspan and Liberal Arthur Okun, both members of TIME'S Board of Economists, support the case for tighter money. Says Greenspan: "A recession is unavoidable. The sooner we have it, the better off the economy will be." Adds Okun: "Despite high interest rates, there is no place in this economy where anybody is saying no to a borrower...
...differences were felt most keenly last week at the monthly meeting of the Federal Reserve Board's Open Market Committee, which determines the pace of money growth and interest rates. The 17 members, seated around a 30-ft. mahogany table in the room where some of the most secret plans of World War II were drawn up, faced an exquisitely difficult choice. They had to decide whether to further tighten credit and raise interest rates, thus taking the risk of tipping the nation into recession, or to maintain rates at their present levels, which might worsen inflation. Their deliberations will...
...insiders recognize that their anti-inflation policy is not working. Admitted a top policymaker: "We cannot go on expecting the wage and price guidelines to hold." Since President Carter has ruled out mandatory controls, the only other policy choice, in the view of White House advisers, is to raise interest rates. Leaks to the press and other pressures on Miller to tighten money became so obvious before the Open Market Committee meeting that Carter sent notes to Blumenthal and Schultze telling them to stop it. The President did not necessarily oppose the Fed's raising interest rates...
...pushing instant credit, as are finance companies, credit unions and similar "near banks." Moreover, bank depositors can lay their hands on credit and cash around the clock by sticking plastic cards into street-corner automated teller machines. Says Finn Caspersen, chairman of Beneficial Corp., which charges up to 20% interest on personal loans: "The consumer is borrowing today's dollar to get today's goods and is paying back with tomorrow's inflated dollars. It's a rational choice...
...this volatile environment, the Federal Reserve chairman argues that the board should take great care before making any marked change. As he told TIME: "We must avoid the unpredictability of monetary policy and moderate the swings of interest rates. Last summer there was criticism that if the Federal Reserve tightened money, we would wreck the economy. Now the clamor is the other way, telling us to do more. We must resist those temptations and have more nerve and sense of responsibility to look at the final good for the nation and not to our popularity from week to week...