Volcker Asserts U.S. Must Trim Living Standard (1979)

Paul Volcker, a current 'wise man' of Washington, was the most vocal advocate for the assault on workers wages that began in the late 1970's. This assault was done for two reason, to restore dominance to the dollar as the leading international currency, and to restore profitability to American capitalism after a long period of stagnation. The assault was openly admitted, and long-planned, as this New York Times article ("Volcker Asserts U.S. Must Trim Living Standard") from 1979 attests:

"The standard of living of the average American has to decline" (Volcker) said "I don't think you can escape that".
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Administration economists regard as their top anti-inflation priority preventing the recent surge in energy and housing prices from spilling over into wages

The Volcker shock therapy consisted of raising interest rates to over 20 %, which led to a recession where unemployment peaked near 11 %. The aftershocks of this recession included an explosion of crime, and a crack epidemic, that lasted into the early 1990's. It also bankrupted Latin America, leading to a decade-long decline in its the standard of living and fueling the rise of the drug trade there. But, from the standpoint of capital, the 'shock therapy' was successful. There was a restoration of corporate profits, a nascent stock market boom, and the Yen and Mark were beaten back as competitors to the dollar.