Dec 10, 2019

What Jerome Powell learned from Paul Volcker

Former Fed chair Paul Volcker
Paul Volcker. Photo: Monica Schipper/Getty Images

Former Fed chair Paul Volcker died Sunday at 92 years old, it was announced yesterday. It reminded me of comments current Fed chair Jerome Powell made about him at the National Association for Business Economics conference in October.

Powell said of Volcker: "I don’t think there has been a greater public servant in our lifetimes."

The big picture: Volcker is best known for having the will to drive the U.S. into a recession in order to battle inflation, which he called "the cruelest tax" because of the pernicious way it could hurt the nation's poor and elderly.

  • He served in the Treasury Department under Presidents Kennedy, Johnson and Nixon before moving to the Fed.

Background: Powell said he first met Volcker when he was an assistant at the Treasury Department in the early 1990s and that Volcker, despite Powell's then-minimal profile, "couldn’t have been nicer and more interested in helping me and supporting me. He was a great person to know."

  • Since leaving the Fed, Volcker made a point to speak out against corporate greed and on behalf of reining in excesses on Wall Street.
  • He was a strong advocate for common-sense reforms and regulations that benefited regular people at the expense of big business and profits.

Where it stands: After being named Fed chair, Powell was seen numerous times with Volcker's memoir, “Keeping at It: The Quest for Sound Money and Good Government.”

  • "I actually thought I should buy 500 copies of his book and just hand them out at the Fed. I didn’t do that. But it’s a book I strongly recommend, and we can all hope to live up to some part of who he is."

Go deeper: Former Fed chairman Paul Volcker dies at 92

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