Paul Volcker was a New Jersey boy with a tough mind. Even without a Ph.D., he was appointed Chairman of the Federal Reserve Bank by President Jimmy Carter and subsequently by President Ronald Reagan. Do you remember the WIN buttons for “Whip Inflation Now” of President Gerald Ford in 1979 as the country lost control of inflation? When Paul Volcker walked into office a year later, inflation was approaching 14%. He was determined to whip inflation . . . and he did! Of course, the cure was a recession.
Volcker was probably the most unpopular Fed Chairman in our history. People complained loudly when 30-year home mortgage rates approached 18%. In 1980, after a week backpacking in Big Bend National Park, I called my wife at the first phone to let her know I was back in civilization. Immediately, she blurted out that Volcker had just raised interest rates to 20%. That was bigger news than my safe return. Like most people, she hated Volcker.
History has been kinder to Volcker. By 1982, inflation was whipped. Years later, he was recalled to Washington to help prevent another Great Recession, and the “Volcker Rule” was born, restricting banks from some risky investing.
President Carter said that the 6’7″ tall Volcker was as stubborn as he was tall. I chuckle when I imagine how Volcker would react to President Trump’s constant bashing of the Fed. I envision a nuclear explosion?
Rest-in-peace, Chair Volcker, you served your country well!