Paul Volcker in 2014
Home Political

Paul Volcker Dies

By Jennifer Torkelson
Contributing Writer for Telegraph Local See My Medium Page

Paul Volcker, former Chairman of the Federal Reserve and a historic figure in the financial world, has died at the age of 92. Diagnosed with prostate cancer in 2018, Volcker had undergone treatment, although the cause of his death remains unspecified. His daughter confirmed that he passed away in his Manhattan home on Sunday.

An imposing man with a deadpan humor and somewhat laconic disposition, Volcker is credited with having tackled and tamed inflation with an iron fist at the end of the 1970s and throughout the 1980s. He led a long and storied career in banking and finance, and as the head of the top financial institution in the United States, Volcker was endowed with a ferocious independence and a particular distaste for the dangers of unchecked rising national debt. Interestingly, Volcker’s passing comes at a time when inflation, one of his greatest enemies and a catalyst for his greatest financial achievements, has all but disappeared from the economic landscape, while the national debt continues to rise, worrying economists. 

Jerome Powell, the current Chairman of the Federal Reserve, expressed his profound sadness at Volcker’s passing. “[Volcker] believed there was no higher calling than public service. His life exemplified the highest ideals — integrity, courage, and a commitment to do what was best for all Americans. His contributions to the nation left a lasting legacy,” Powell wrote in a statement. Former President Barack Obama praised Volcker’s wisdom, integrity, honesty, and dignity, highlighting his belief in the “power of the markets” and in the government’s responsibility to ensure that the markets work for all. Former President Jimmy Carter also paid homage to Volcker, saying that “although some of his policies as Fed chairman were politically costly, they were the right thing to do. His strong and intelligent guidance helped to curb petroleum-driven inflation, easing a strain on all Americans’ budgets. We are grateful for his service to our country.”

“The most effective chairman in the history of the Federal Reserve,” according to Alan Greenspan, Volcker, a Democrat, served under numerous presidents, including Richard Nixon in 1971 as Under Secretary of the Treasury for International Affairs, Jimmy Carter and Ronald Reagan in 1979-1987 as Chairman of the Federal Reserve, and Barack Obama in 2008 as Chair of the President’s Economic Recovery Advisory Board. It was as Chairman of the Federal Reserve, however, that Volcker made his sometimes painful but wholly necessary mark on the economy, gaining the respect of economists across the world.

In 1978, at the height of oil-induced inflation and the ensuing economic crisis, Jimmy Carter decided to name Volcker as Chairman of the Fed, despite warnings from numerous advisors that the pick would jeopardize his reelection. Volcker raised interest rates from 11% to 20% in his campaign against inflation. This extreme rate hike was followed by a recession that provoked fierce attacks against him from carmakers, car dealers, and farmers alike, and yet Volcker, as pragmatic and stubborn as ever, did not relent. Although inflation dropped from 14% in 1980 to only 3% in 1983 thanks to Volcker’s decisiveness, his harsh policies along with the hostage crisis at the U.S. embassy in Iran ultimately cost Jimmy Carter his reelection. Volcker left the Fed in 1987 and reemerged in Washington during the economic recession in 2008. Highly critical of high-risk practices of the banking industry at the time, he introduced the “Volcker Rule,” which forbids banks from using their own accounts for short-term trading. Although some of Volcker’s policies have lost their influence due to deregulation under the Trump administration, his impact on the U.S. economy and economic policy is unquestioned.

<script async src=""></script>
<ins class="adsbygoogle"
     style="display:block; text-align:center;"
     (adsbygoogle = window.adsbygoogle || []).push({});

Leave a Reply