The Last Central Banker With Balls

As a graduate student, I interviewed at the Federal Reserve Board in the Eccles on Constitutional Avenue (entrance on 20th Street) as a junior economist.  This was way before the tight security now ubiquitous in government buildings.  I had worked at other Federal government agencies but never experienced the tight security upon entering those buildings as I did at the Fed that day.

Upon arriving upstairs for my interviews, I asked one of the economists why such tight security?   He responded something to the effect,

When Paul Volcker raised interest rates to near 20 percent to wring inflation from the economy, farmers and other disgruntled citizens were caught wandering the halls of the Federal Reserve Board with guns looking for the Fed Chairman. 

Yikes!

Paul Volker had some brass ones and realized and was his policy that short-term pain would result in long-term gains, such as a thirty-year plus bond bull market, for example.

Mr. Volker’s legacy contrasts sharply with the central bankers of today, who panic when, say,  the S&P500 drops 2 percent, which will almost surely result -in the opposite of the Volker monetary policy precept, i.e., trading short-term gains for long-term gains. It is already evident with accelerating wealth inequality.

He intellectual monetary giant, honest and spoke what was on his mind until his last days.