The best way to restore confidence in a currency medium and long term is for a government to stop wasteful spending and to let its economy grow, and Reagan did that. Hiking interest rates and currency interventions can be a good short term measure to change the direction of a currency. But induced recessions and other forms of economic pain are simply unnecessary. They do make the Federal Reserve look powerful and satisfy the sadist side of many.
My only point is that you thereby criticize Reagan too. This was his policy also, or at any rate one that he fully agreed with and recognized the absolute necessity of, as the groundwork of and integral to the rest of his economic policy. (Of course I recognize that the President has no direct control over the Fed except in the appointment power.)
Look, there is just NO other way to kill inflation than by tightening the money supply (i.e. hiking interest rates). Nothing else works, and everything else had been tried by Reagan's predecessors; Nixon, Carter and Ford.
The availability of money is what drives inflation. Of course the availability of money is also (a necessary part of) what drives the growth of the economy. Inflationary economies are even more dependent on money to sustain economic growth, precisely because so much of its value gets eaten up by inflation.
If you tighten money sufficient to kill inflation you WILL contract the economy, temporarily, because you're also cutting the supply of money necessary to sustain growth in an inflationary economy. This however is necessary to create the conditions for long term real economic growth.
Every time and anywhere high inflation has been successfully conquered it's always been achieved by tight money policy, and the initiation of this policy has always and everywhere created significant economic pain in the short term.
But induced recessions and other forms of economic pain are simply unnecessary.
You are absolutely wrong about that. In the condition of an inflationary economy, recession, in the short term, is an absolutely unavoidable consequence of tight money policy, and tight money policy is the ONLY way to stop runaway inflation.
I suppose you can kill inflation s-l-o-w-l-y with very gradual tightening of the money supply, but this only lengthens the period of economic pain. You can't avoid it. Much better to do it quickly, like pulling off a bandaid. Volker did the right thing, as Reagan always recognized and affirmed. (Admittedly some of Reagan's aids and lieutenants went "wobbly" on monetary policy during the recessionary period, but to my recollection Reagan himself never did.)