The Williamsburg Caper

Once again it’s economic-sum- mit time, this year in Williamsburg. Why President Reagan dignifies these gatherings with his presence I don’t know. The general idea is to permit herds of journalists, economists, and bureaucrats to get together in comfortable surroundings for a few days and enjoy the illusion that the world continues to rotate under their expert guidance. Heads of state, not wanting to be left out of this “process”—a favorite coinage of the Civil Service/Fourth Estate nexus—lend a semblance of plausibility to the proceedings by showing up on schedule.

On the top of the agenda this year has been a disguised effort to get America back onto a more inflationary course. Not that anyone puts it that way. The Washington Post, for example, tells us three or four times a week that the dollar is “overvalued.” (Note that this is a policy prescription rather than a market judgment. We are never told how the journalist in question is better informed than the millions of participants in the foreign-exchange markets around the world.) The dollar is overvalued, we are told, because interest rates are so “high.” (Short-term rates are 8 per cent here, compared to, say, 130 per cent in Brazil.) In turn, high interest rates are caused by big budget deficits.

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Tom Bethell

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Once again it’s economic-sum- mit time, this year in Williamsburg. Why President Reagan dignifies these gatherings with his presence I don’t know. The general idea is to permit herds of journalists, economists, and bureaucrats to get together in comfortable surroundings for a few days and enjoy the illusion that the world continues to rotate under their expert guidance. Heads of state, not wanting to be left out of this “process”—a favorite coinage of the Civil Service/Fourth Estate nexus—lend a semblance of plausibility to the proceedings by showing up on schedule.

On the top of the agenda this year has been a disguised effort to get America back onto a more inflationary course. Not that anyone puts it that way. The Washington Post, for example, tells us three or four times a week that the dollar is “overvalued.” (Note that this is a policy prescription rather than a market judgment. We are never told how the journalist in question is better informed than the millions of participants in the foreign-exchange markets around the world.) The dollar is overvalued, we are told, because interest rates are so “high.” (Short-term rates are 8 per cent here, compared to, say, 130 per cent in Brazil.) In turn, high interest rates are caused by big budget deficits.