My ex-wife was fond of saying that one of the biggest problems with men is that they just can’t stop competing with other men . . . even dead men.
Paul Volcker (1927-2009) was the Chairman of the Fed from 1979 to 1987, when he was succeeded by Alan Greenspan. A product of Princeton and Harvard, he is still widely regarded as the greatest “Fed-Head” in our history. A first-class economist, he led us thru some very difficult years. He was faced with the stark challenge of stopping inflation and doing it quickly. Lacking some of the tools available today, he made the painful but courageous decision to put our nation into a recession – the only surefire way to stop inflation. Criticism quickly swapped him, which of course, turned to praise as inflation began falling. Bear in mind – he had the opportunity to be courageous only because he faced the choice of creating a recession or not. Greenspan, Bernanke, & Yellen did not have that opportunity.
Every Fed-Head since then has lived in the shadow of Volcker, especially the current leader, Jerome Powell. Like Volcker, he is faced with surging inflation, which is an opportunity to equal Volcker’s heroism. A lawyer instead of an economist, Powell is trying to engineer a “soft landing” for inflation, i.e., stopping inflation without a recession. If he can do that, it will be a greater feat than Volcker’s.
I’m sure that Volcker wouldn’t mind the competition. (After all, all men do love competition, don’t they?) In fact, Volcker would undoubtedly salute Powell, if he can indeed achieve a soft landing! However, my concern is that Powell may take his foot off the brake too soon, allowing inflation to surge back. If so, Volcker wins!