Paul Volcker, former Federal Reserve chairman who curbed a decade of high inflation and tightened the reins on commercial banks after the 2008 financial collapse, died Monday at 92.
Volcker got his start in the Treasury Department during the Kennedy, Johnson and Nixon administrations. There, he fought and failed to maintain the international monetary system created by the Bretton Woods agreement. He climbed from director of the Office of Financial Analysis to deputy undersecretary and then undersecretary of monetary affairs before transitioning to his most prominent post.
Volcker As Fed Chair
Under the Ford, Carter and Reagan regimes, he served as a senior Federal Reserve official resisting financial deregulation and accelerated debt growth. In 1979, he rose from president of the Federal Reserve Bank of New York to chairman of the Federal Reserve — a gig that earned him a spot in the history books.
One of his most meaningful contributions was shocking the economy into a recession to shake an inflation rate above 1% a month. His success won the Fed respect on the Hill, and political leaders began deferring to the central bank on monetary policy.
“He came to represent independence,” Ben Bernanke, Fed chairman from 2006 to 2014, told the New York Times. “He personified the idea of doing something politically unpopular but economically necessary.”
The Volcker Rule
Volcker closed out his federal career as chairman of the Obama Administration’s Economic Recovery Advisory Board, where he pressed legislators to enact restrictions on big banks post-2008. The resulting “Volcker Rule” is his legacy and a target of reform for the Trump Administration.
Between stints in the swamp, Volcker boasted incredible success in the private sector. He started out at Chase Manhattan Bank and served as CEO of Wolfensohn & Company, although he kept few friends on Wall Street throughout his public service.
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Photo credit: Edmond J. Safra Center for Ethics, Flickr
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