They cut real incomes, consumption, business investment and employment. On top of that, they show up in the Consumer Price Index . By acting when he did, Clinton pre-empted that, and gave our slowing economy a breather. No one noticed, but Clinton's action undid 20 years of myth-making about fighting inflation. This was supposed to be the Fed's job, alone .
Inflation is always and everywhere a monetary phenomenon.
So wrote Milton Friedman . But the fact remains that when the crisis came, a politician took over and sent the Fed to the sidelines. It served them right, too. Not one bit. Not in the least.