Former Federal Reserve Chairman Paul Volcker died at 92. He was suffering from prostate cancer, according to reports.
“The economic hero of post-World War II America I would have to say was Paul Volcker,” Robert Kavesh, a professor at New York University. “And that’s saying something.”
President Carter appointed Volcker as chairman of the Fed in 1979 amid a stagflation crisis, in which both high inflation an rising unemployment led to gas rationing, etc.Volcker constricted the nation’s money supply and allowed interest rates to rise to more than 18 percent on mortgages.
The country blamed Volcker for increasing unemployment and recession.
“Ultimately, the only way, I think that just say flatly interest rates will be brought down and stay down is to get the inflation rate down,” he said at a Senate Banking Committee hearing in 1981.
Janet Yellen, the Fed chair from 2014-2018, sung Volcker’s praises. He “embodied the values we hold most dear: devotion to public service, the courage to do the right thing, even when it’s immensely unpopular.” She credited him with “taming inflation and ushering in a long period of macroeconomic stability.”
Ben Bernanke, the Fed chairman prior to Yellen, shared her sentiments in remarks to the New York Times, saying that Volcker “personified the idea of doing something politically unpopular but economically necessary.”
Born in Cape May, N.J., and grew up in Teaneck, Volcker stood at more than 6-foot-7. Volcker believed crises created opportunities to enact change.
“Well, when you’ve been in government and in public life a long time, you begin to realize you need a crisis to move the United States government, and other governments aren’t all that different,” he told NPR in 1992.
Volcker received death threats as recession increased into the early 1980s, and he was granted Secret Service protection.
“We read the papers at the time and we knew what he was doing and trying to do was not popular, obviously,” his son James Volcker said. “And I think the entire family knew that this was one of the things that comes with public service.”
Volcker did not take his first large salaried position in Wall Street until after his 60th birthday. Volcker served as Fed chairman for eight years until 1987. He returned to Wall Street before serving as an adviser to President Obama after the 2008 financial crisis, the worst such crisis in the U.S. since the Great Depression.
During that time, he proposed the Volcker Rule, which sought to reduce the risk big banks posed to the economy by curbing their ability to trade their own funds speculatively. A watered down version of it was enacted under the Dodd-Frank regulatory overhaul. President Trump ordered the rule be rewritten in 2017.
“I think he’s regarded as one of the stellar people of his generation,” late Fed historian Allan Meltzer.
Volcker’s wife of four decades died in 1998. Twelve years later, at the age of 82, Volcker married long-time assistant, Anke Dening, who survives Volcker along with his children.