Posted on 12/09/2019 1:07:24 PM PST by Responsibility2nd
Paul A. Volcker, who helped shape American economic policy for more than six decades, most notably by leading the Federal Reserve’s brute-force campaign to subdue inflation in the late 1970s and early ’80s, died on Sunday in New York. He was 92.
The death was confirmed by his daughter, Janice Zima, who did not specify the cause. Mr. Volcker had been treated for prostate cancer, which was diagnosed in 2018.
Mr. Volcker, a towering, taciturn and somewhat rumpled figure, arrived in Washington as America’s postwar economic hegemony was beginning to crumble. He would devote his professional life to wrestling with the consequences.
As a Treasury Department official under Presidents John F. Kennedy, Lyndon B. Johnson and Richard M. Nixon, Mr. Volcker waged a long, losing struggle to preserve the postwar international monetary system established by the Bretton Woods agreement.
(Excerpt) Read more at nytimes.com ...
How nice.
The Federal Reserve is a soviet-style central planning agency for the most important commodity of all - money.
The best thing Jimmy Carter did was appointing Volcker, even though his policies probably helped make Carter’s re-election less likely.
Volcker tamed the inflation that had been crippling US investment since the first oil embargo. WIN buttons were not going to get the job done.
He waged a war alright. The Feds mandate says that it is to maintain zero inflation. Yet The fed intentional increased inflation all through the years. Anyone who was a saver got clobbered by his war of inflation.
I remember 13% Mortgages........................
You’ll get a lot of bankster groupies here who think Volcker did what he had to do.
Those of us who had to deal with his simplistic, brute force approach inspired by his complete lack of comprehension of anything in real economics are less impressed.
For example, in what galaxy was it necessary to bump mortgage interest rates to 18.45% in October of 1981?
We have had far worse issues in the intervening decades then the moderate inflation caused by oil price scams in 1979-80, and no one thought you needed triple the historic rates to solve the problem.
But Oh Yeah! The Triffin Dilemma! Yeah, that’s it! He had to do it Cuz That.
Except not once did anyone say that back then. Which means it wasn’t on their minds - it was just their rudimentary understanding of the way the reserve currency worked at that time.
IOW, using a damn sledgehammer to kill a gnat.
Volcker is just one more in a line of patrician banker types who barely understood what was happening, and destroyed enormous segments of the economy with his dumbthug actions.
http://www.mortgagenewsdaily.com/mortgage_rates/charts.asp?Y=1981&M=10
Reagan renominated him so obviously he didn’t think that.
I once heard a speaker that said he was an insurance underwriter during that time.
His compensation was partly based on how successful the approved policies were vis-a-vis the actuarial tables.
The finance guys, seeing how high interest on investment income was, lowered the bar on risk, just to get the policy premiums to invest at the high rates.
For instance, property insurance premiums typically cover ~93% of the overall claims payouts, with insurance companies making up the difference with investment income.
Well, no surprise, his company didn't change the compensation numbers for writing worse-than-expected business.
Bet the investment managers made out, though.
Yeah. The money definitely flowed uphill as everyone below struggled to make it.
I was selling capital goods equipment with leases and loan paper that had stupendous returns for the funders. Decided that I was in the wrong business. Better to sell debt then machinery.
Reagan was not perfect.
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