British Chancellor of the Exchequer Denis Healey who later described Simon as

British chancellor of the exchequer denis healey who

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British Chancellor of the Exchequer Denis Healey, who later described Simon as “far to the right of Genghis Kahn and totally devoted to the freedom of financial markets,” thus proposed a second, open-ended Oil Facility to Simon and the finance ministers of France, Germany, Japan, and the United Kingdom at another summit in September 1974 . 92 The proposal sought to disabuse American policy of what Healey believed was “a misconceived link between the issue of oil prices and that of recycling.” For him, the spillover of the American policy of “brinksman- ship” on oil prices into debates about lending was “dangerously imprudent.” 93 He hoped the new Oil Facility would attract at least $ 30 billion, and reminded Kissinger that this relatively small amount would leave the majority of petrodollars in private capital markets. 94 The United States did not budge. Simon explained his opposition to Healey’s plan to the Independent Petroleum Association in October 1974 . In the face of expensive oil, he complained, “the idea of free enterprise seems to have lost its sheen.” Some critics thought “the Arabs now have the United States in a perilous unbreakable hammerlock,” he said. But that fear was overblown: “I totally dis- agree, and I do so on the very solid grounds of economic realism and American tradition. A nation that can tame the wilderness, that has the most dynamic free market-place in the history of man, that can lift the standard of living to heights hitherto unknown, and can then place men on the moon – that nation, if it allows 90 . Research Department, “Adequacy of Present Financing Arrangement of Oil Surplus Funds,” 12 November 1974 , OFR, IMFA. 91 . Secretary to Executive Board, “Oil Facility – Further Review for 1974 ,” 29 November 1974 , OFR, IMFA; Edwin L. Dale, “ 20 Finance Chiefs Meet,” New York Times , 4 October 1974 , 53 ; U.S. Congress, House, Committee on Banking and Currency, Ad Hoc Committee on the Domestic and International Monetary Effect of Energy and Other Natural Resource Pricing, “Petrodollars: Recycling and Aid Prospects,” 93 rd Congress, 2 nd session, 12 December 1974 . 92 . Healey, Time of My Life (New York, 1989 ), 419 . On Simon, see Robery Asen, “Ideology, Materiality, and Counterpublicity: William E. Simon and the Rise of a Conservative Counterintelligentsia,” Quarterly Journal of Speech 95 , no. 3 (August 2009 ): 263 - 88 . 93 . H.M. Treasury, “Brief for Discussions with the Americans: Recycling,” 9 October 1974 , TNA: FCO 96 / 6 . 94 . Meeting Record, “Oil and the World Economy,” 2 October 1974 , TNA: FCO 96 / 6 . 518 : d i p l o m a t i c h i s t o r y Downloaded from by Bora Laskin Law Library user on 06 September 2018
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free enterprise full freedom, is not going to be cowed by the sudden threat of blackmail.” From Simon’s perspective, then, the OPEC price increases “were not only bad politics but bad economics.” 95 The market-driven conclusion was obvious—another large Oil Facility would abjectly capitulate to the producers. Simon thus worked to substitute the IMF proposal with a “closed-circuit
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