Paul Volcker

His father ran Teaneck, New Jersey, for 20 years as its first township manager, and the son grew up watching a man balance a municipal budget in public. He went to Princeton and graduated with highest honors in 1949. The senior thesis was an attack on the Federal Reserve for letting a swollen money supply sit there after the war: bring it under control, he wrote, or take the price rise that follows. He took a master's at Harvard, spent a year at the London School of Economics, and joined the New York Fed as an economist in 1952. Then Chase, then the Treasury, where he helped Nixon cut the dollar loose from gold in August 1971 — the single most important event of his career, he said later.

Carter needed a name the markets would believe and nominated him on July 25, 1979. Inflation hit 14.8 percent that March. Volcker's Fed stopped steering interest rates and started squeezing the quantity of money, and let the rates go where the squeeze took them — the federal funds rate reached 17.6 percent by April 1980. Inflation was under 3 percent by 1983, and the assumption that it would keep rising forever, which was the harder thing to kill, died with it. He stayed through Reagan's first term, negotiated the Plaza Accord in 1985 to bring the dollar down against the mark and the yen, and left in August 1987 without asking for a third term. Alan Greenspan inherited the office and the credibility.

The bill went to people who were never asked. Unemployment reached 10.8 percent in November and December 1982, the highest since the Depression. Auto workers hit 24 percent and construction workers 22. Black unemployment peaked at 20 percent that December, and for most of that year roughly half of Black teenagers were out of work. Farmers who could not service their debt drove tractors onto C Street in Washington and parked them around the Eccles Building. His Fed drew the heaviest political attack in the institution's history. In July 1984 the White House chief of staff, James Baker, summoned him to a meeting with Reagan and ordered him not to raise rates before the election. Volcker wrote that he was stunned. He said nothing publicly, partly because he had not intended to raise them.

He kept being handed the jobs nobody else wanted. He audited Swiss banks for the dormant accounts of Holocaust victims and brought the parties to a 1.25 billion dollar settlement. He investigated the United Nations oil-for-food program in 2004 and criticized the Secretary-General's son. After the 2008 crash he chaired Obama's economic recovery board, and the rule that carries his name — banks may not gamble with their own money — went into law in 2010 and has been narrowed since. He died in New York on December 8, 2019, at 92, a year after a prostate cancer diagnosis. Whether the recession was worth what it bought is still argued. No chairman since has escaped being measured against him.

Paul Volcker's life against the full span of the corpus.

• The Problems of Federal Reserve Policy since World War II article
  His Princeton senior thesis, 30 years before he got to fix it 1949
• Suspension of the dollar's gold convertibility other
  As Treasury under secretary he helped end the Bretton Woods system 1971
• Plaza Accord other
  An agreement to revalue the mark and the yen against the dollar 1985
• Committee of Eminent Persons report on Swiss bank accounts other
  A 1.25 billion dollar settlement over the dormant accounts of Holocaust victims 1998
• Independent inquiry into the UN oil-for-food programme other
  It criticized the Secretary-General's son and cleared the selection process 2005
• The Volcker Rule law
  Proposed January 21, 2010 — a bar on banks trading for their own account 2010

• 1945 aged ~18 Graduates from Teaneck High School, where his father ran the township
• 1949 aged ~22 Leaves Princeton with highest honors and a thesis attacking the Fed
• 1952 aged ~25 Joins the Federal Reserve Bank of New York as a staff economist
• August 15, 1971 aged 43 Helps Nixon suspend the dollar's convertibility into gold He called it the single most important event of his career.
• 1975 aged ~48 Becomes president of the Federal Reserve Bank of New York
• July 25, 1979 aged 51 Carter nominates him to chair the Federal Reserve The markets had panicked at the alternative.
• March 1980 aged 52 Inflation peaks at 14.8 percent It was under 3 percent by 1983.
• December 1982 aged 55 Unemployment hits 10.8 percent, the worst since the Depression Farmers had already blockaded the Eccles Building with their tractors.
• December 8, 2019 aged 92 Dies in New York City at 92

• Jimmy Carter 1924–2024
  39th president who emphasized human rights, brokered the Camp David Accords, and built a major post-presidential humanitarian legacy. appointed by
• Ronald Reagan 1911–2004
  40th president whose conservative domestic program and assertive Cold War strategy reshaped American politics. renominated, then let go by
• Richard Nixon 1913–1994
  37th President whose foreign policy achievements were overshadowed by the Watergate scandal. served under
• Barack Obama b. 1961
  44th President and first African American to hold the office, known for the Affordable Care Act. advised
• Ben Bernanke b. 1953
  Led the Federal Reserve through the 2008 financial crisis and won the 2022 Nobel Prize in Economics. later chair of the Federal Reserve
• Janet Yellen b. 1946
  First woman to chair the Federal Reserve and to serve as Treasury Secretary. later chair of the Federal Reserve