12-10-2019, 08:11 PM
Former Federal Reserve Chairman Paul Volcker:
Paul Adolph Volcker Jr.[3] (/ˈvoʊlkər/; September 5, 1927 – December 8, 2019) was an American economist. He was Chairman of the Federal Reserve under U.S. presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with having ended the high levels of inflation seen in the United States during the 1970s and early 1980s. He was the chairman of the Economic Recovery Advisory Board under President Barack Obama from February 2009[4] until January 2011.[5]
In 1952 he joined the staff of the Federal Reserve Bank of New York as a full-time economist. He left that position in 1957 to become a financial economist with the Chase Manhattan Bank. In 1962, Robert Roosa, who had been his mentor at the Federal Reserve, hired him at the Treasury Department as director of financial analysis.[11] In 1963, he became deputy under secretary for monetary affairs. He returned to Chase Manhattan Bank as vice president and director of planning in 1965.
Appointed by the Nixon Administration, Volcker served as under secretary of the Treasury for international monetary affairs from 1969 to 1974. He played an important role in President Nixon's decision to suspend gold convertibility of the dollar on August 15, 1971, which resulted in the collapse of the Bretton Woods system. Volcker considered the suspension of gold convertibility "the single most important event of his career."[12] Because of his position as under secretary, Volcker served as a board member for OPIC and Fannie Mae.[13] Across the policies he worked on, he acted as a moderating influence on policy, advocating the pursuit of an international solution to monetary problems and acting as a negotiator with other nations' policymakers.[14] After leaving the U.S. Treasury, he spent a year as a senior fellow at Princeton's Woodrow Wilson School (his alma mater). In 1975, he became president of the Federal Reserve Bank of New York, and he retained that role until he became Federal Reserve Chair in August 1979.
President Jimmy Carter nominated Paul Volcker to serve as chairman of the Board of Governors of the Federal Reserve System on July 25, 1979.[15] He was confirmed by the Senate on August 2, 1979, and took office on August 6, 1979.[16] President Ronald Reagan renominated Volcker to a second term in 1983.[17][18]
Inflation emerged as an economic and political challenge in the United States during the 1970s. The monetary policies of the Federal Reserve board, led by Volcker, were widely credited with curbing the rate of inflation and expectations that inflation would continue. US inflation, which peaked at 14.8 percent in March 1980, fell below 3 percent by 1983.[19][20] The Federal Reserve board led by Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well, which helped lead to the 1980–1982 recession,[21] in which the national unemployment rate rose to over 10%. Volcker's Federal Reserve board elicited the strongest political attacks and most widespread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of high interest rates on the construction, farming, and industrial sectors, culminating in indebted farmers driving their tractors onto C Street NW in Washington, D.C. and blockading the Eccles Building.[22] US monetary policy eased in 1982, helping lead to a resumption of economic growth.
The US current account was in permanent deficit by the nineties. Volcker himself tried to remedy the situation by the Plaza Accord in 1986, which called for Germany and Japan to revalue relative to the US dollar.[23]
The combination of the Fed's tight money policies and the expansive fiscal policy of the Reagan Administration (large tax cuts and a major increase in military spending) produced large federal budget deficits and significant macroeconomic imbalances in the U.S. economy. The combination of growing federal debt and high interest rates led to a substantial rise in federal net interest costs. The sharp rise of interest costs and large deficits led Congress to take some steps towards fiscal constraint.[24]
Nobel laureate Joseph Stiglitz said about him in an interview:
Congressman Ron Paul, well known as a harsh critic of the Federal Reserve, offered qualified praise of Volcker:
In 1983, Volcker received the U.S. Senator John Heinz Award for Greatest Public Service by an Elected or Appointed Official, an award given out annually by Jefferson Awards.[27]
In 2015, Volcker donated his public service papers to Princeton University's Seeley G. Mudd Manuscript Library.[28]
After leaving the Federal Reserve in 1987, he became chairman of the prominent New York investment banking firm, Wolfensohn & Co., a corporate advisory and investment firm run by James D. Wolfensohn (who later became president of the World Bank).
In 1993 he chaired the Group of 30 Report on the Derivatives market entitled "Derivatives: Practices and Principles" [29] with several appendices and a survey on how practices may have changed since the original 1993 report.[30] The Group of 30 is a "consultative group on international economic and monetary affairs." Volcker was their Chairman emeritus.[31]
In 1996, he took up the chair of the Independent Committee of Eminent Persons (Volcker Commission) to look into the dormant accounts of Jewish victims of the Holocaust lying in Swiss banks. This included a "massive accounting of Swiss bank records." In the midst of a contentious process (the committee was formed by three Jewish representatives and three representatives of Swiss banks), he was able to bring about an agreement among the parties for a settlement of $1.25 billion.[32]
In 2000 he accepted the Chairmanship of the IFRS Trustees, the not-for-profit funding arm of the International Accounting Standards Board (later the IFRS Foundation). The IFRS Foundation is a private sector enterprise based in London which seeks to develop a single global accounting model, subject to adoption country by country under their rules of law.[33]
In April 2004, the United Nations assigned Volcker to research possible corruption in the Iraqi Oil for Food program. In the report summarizing its research, Volcker criticized Kojo Annan, son of then-UN Secretary-General Kofi Annan, and the Swiss company Cotecna Inspection SA, Kojo's employer, for trying to conceal their relationship. He concluded in his March 2005, report that "there is no evidence that the selection of Cotecna, in 1998, was subject to improper influence of the Secretary General in the bidding or selection process."[34] While Volcker did not implicate the Secretary General in the selection process, however, he did cast serious doubt on Kofi Annan, whose "management performance ... fell short of the standards that the United Nations Organization should strive to maintain."[35] Volcker was a director of the United Nations Association of the United States of America between 2000 and 2004, prior to his being appointed to the Independent Inquiry by Kofi Annan.
As of October 2006, he was the chairman of the board of trustees of the influential Washington-based financial advisory body, the Group of Thirty, and a member of the Trilateral Commission. He had a long association with the Rockefeller family, not only with his positions at Chase Bank and the Trilateral Commission, but also through membership of the trust committee of Rockefeller Group, Inc., which he joined in 1987. That entity managed, at one time, the Rockefeller Center on behalf of the numerous members of the Rockefeller family. He was a chairman and an honorary trustee of International House, the cultural exchange residence and program center in New York City. He was a founding member of the Trilateral Commission and a long-time member of the Bilderberg Group.
In January 2008, he endorsed Democratic presidential candidate Barack Obama.[36]
On April 8, 2008, he was the featured speaker at The Economic Club of New York. Volcker discussed "what appears to be in substance a direct transfer of mortgage and mortgage-backed securities of questionable pedigree from an investment bank to the Federal Reserve," and offered his detailed analysis and evaluation of interrelationships among the U.S. capital markets, Federal Reserve policies, and the economy as whole.[37]
Paul Volcker appeared in the Charles Ferguson's movie Inside Job. He was interviewed about current Wall Street CEO pay, claiming it is "excessive."[38]
Volcker was an economic advisor to President Barack Obama, heading the President's Economic Recovery Advisory Board.[39][40][41] During the financial crisis, Volcker was extremely critical of banks, saying that their response to the financial crisis was inadequate, and that more regulation of banks is called for.[42][43][44] Specifically, Volcker called for a break-up of the nation's largest banks, prohibiting deposit-taking institutions from engaging in riskier activities such as proprietary trading, private equity, and hedge fund investments.[45][46] Volcker left the board when its charter expired on February 6, 2011, without being included in discussions on how the board would be reconstituted.[47]
On January 21, 2010, President Barack Obama proposed bank regulations which he dubbed "The Volcker Rule," in reference to Volcker's aggressive pursuit of these regulations.[48] Volcker appeared with the president at the announcement. The proposed rules would prevent commercial banks from owning and investing in hedge funds and private equity, and limit the trading they do for their own accounts.[49] According to SEC Commissioner Luis A. Aguilar, "[t]he success or failure of the Volcker Rule will depend on the manner in which banking entities comply with the letter and spirit of the rule, and on the willingness of regulators to enforce it." [50]
Volcker was known to defy the stereotype of a Wall Street insider. A profile in The Week for February 5, 2010, claimed that Volcker doesn't even buy the conventional wisdom that "financial innovation" is necessary for a healthy economy. In fact, he likes to say, "the only useful banking innovation was the invention of the ATM."[51]
On April 6, 2010, at the New-York Historical Society's Global Economic Panel, Volcker commented that the United States should consider adding a national sales tax similar to the Value Added Tax (VAT) imposed in European countries, stating "If, at the end of the day, we need to raise taxes, we should raise taxes." [52]
https://en.wikipedia.org/wiki/Paul_Volcker
Paul Adolph Volcker Jr.[3] (/ˈvoʊlkər/; September 5, 1927 – December 8, 2019) was an American economist. He was Chairman of the Federal Reserve under U.S. presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with having ended the high levels of inflation seen in the United States during the 1970s and early 1980s. He was the chairman of the Economic Recovery Advisory Board under President Barack Obama from February 2009[4] until January 2011.[5]
In 1952 he joined the staff of the Federal Reserve Bank of New York as a full-time economist. He left that position in 1957 to become a financial economist with the Chase Manhattan Bank. In 1962, Robert Roosa, who had been his mentor at the Federal Reserve, hired him at the Treasury Department as director of financial analysis.[11] In 1963, he became deputy under secretary for monetary affairs. He returned to Chase Manhattan Bank as vice president and director of planning in 1965.
Appointed by the Nixon Administration, Volcker served as under secretary of the Treasury for international monetary affairs from 1969 to 1974. He played an important role in President Nixon's decision to suspend gold convertibility of the dollar on August 15, 1971, which resulted in the collapse of the Bretton Woods system. Volcker considered the suspension of gold convertibility "the single most important event of his career."[12] Because of his position as under secretary, Volcker served as a board member for OPIC and Fannie Mae.[13] Across the policies he worked on, he acted as a moderating influence on policy, advocating the pursuit of an international solution to monetary problems and acting as a negotiator with other nations' policymakers.[14] After leaving the U.S. Treasury, he spent a year as a senior fellow at Princeton's Woodrow Wilson School (his alma mater). In 1975, he became president of the Federal Reserve Bank of New York, and he retained that role until he became Federal Reserve Chair in August 1979.
President Jimmy Carter nominated Paul Volcker to serve as chairman of the Board of Governors of the Federal Reserve System on July 25, 1979.[15] He was confirmed by the Senate on August 2, 1979, and took office on August 6, 1979.[16] President Ronald Reagan renominated Volcker to a second term in 1983.[17][18]
Inflation emerged as an economic and political challenge in the United States during the 1970s. The monetary policies of the Federal Reserve board, led by Volcker, were widely credited with curbing the rate of inflation and expectations that inflation would continue. US inflation, which peaked at 14.8 percent in March 1980, fell below 3 percent by 1983.[19][20] The Federal Reserve board led by Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well, which helped lead to the 1980–1982 recession,[21] in which the national unemployment rate rose to over 10%. Volcker's Federal Reserve board elicited the strongest political attacks and most widespread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of high interest rates on the construction, farming, and industrial sectors, culminating in indebted farmers driving their tractors onto C Street NW in Washington, D.C. and blockading the Eccles Building.[22] US monetary policy eased in 1982, helping lead to a resumption of economic growth.
The US current account was in permanent deficit by the nineties. Volcker himself tried to remedy the situation by the Plaza Accord in 1986, which called for Germany and Japan to revalue relative to the US dollar.[23]
The combination of the Fed's tight money policies and the expansive fiscal policy of the Reagan Administration (large tax cuts and a major increase in military spending) produced large federal budget deficits and significant macroeconomic imbalances in the U.S. economy. The combination of growing federal debt and high interest rates led to a substantial rise in federal net interest costs. The sharp rise of interest costs and large deficits led Congress to take some steps towards fiscal constraint.[24]
Nobel laureate Joseph Stiglitz said about him in an interview:
Quote:Paul Volcker, the previous Fed Chairman known for keeping inflation under control, was fired because the Reagan administration didn't believe he was an adequate de-regulator.[25]
Congressman Ron Paul, well known as a harsh critic of the Federal Reserve, offered qualified praise of Volcker:
Quote:Being in Congress in the late 1970s and early 1980s and serving on the House Banking Committee, I met and got to question several Federal Reserve chairmen: Arthur Burns, G. William Miller, and Paul Volcker. Of the three, I had the most interaction with Volcker. He was more personable and smarter than the others, including the more recent board chairmen Alan Greenspan and Ben Bernanke.[26]
In 1983, Volcker received the U.S. Senator John Heinz Award for Greatest Public Service by an Elected or Appointed Official, an award given out annually by Jefferson Awards.[27]
In 2015, Volcker donated his public service papers to Princeton University's Seeley G. Mudd Manuscript Library.[28]
After leaving the Federal Reserve in 1987, he became chairman of the prominent New York investment banking firm, Wolfensohn & Co., a corporate advisory and investment firm run by James D. Wolfensohn (who later became president of the World Bank).
In 1993 he chaired the Group of 30 Report on the Derivatives market entitled "Derivatives: Practices and Principles" [29] with several appendices and a survey on how practices may have changed since the original 1993 report.[30] The Group of 30 is a "consultative group on international economic and monetary affairs." Volcker was their Chairman emeritus.[31]
In 1996, he took up the chair of the Independent Committee of Eminent Persons (Volcker Commission) to look into the dormant accounts of Jewish victims of the Holocaust lying in Swiss banks. This included a "massive accounting of Swiss bank records." In the midst of a contentious process (the committee was formed by three Jewish representatives and three representatives of Swiss banks), he was able to bring about an agreement among the parties for a settlement of $1.25 billion.[32]
In 2000 he accepted the Chairmanship of the IFRS Trustees, the not-for-profit funding arm of the International Accounting Standards Board (later the IFRS Foundation). The IFRS Foundation is a private sector enterprise based in London which seeks to develop a single global accounting model, subject to adoption country by country under their rules of law.[33]
In April 2004, the United Nations assigned Volcker to research possible corruption in the Iraqi Oil for Food program. In the report summarizing its research, Volcker criticized Kojo Annan, son of then-UN Secretary-General Kofi Annan, and the Swiss company Cotecna Inspection SA, Kojo's employer, for trying to conceal their relationship. He concluded in his March 2005, report that "there is no evidence that the selection of Cotecna, in 1998, was subject to improper influence of the Secretary General in the bidding or selection process."[34] While Volcker did not implicate the Secretary General in the selection process, however, he did cast serious doubt on Kofi Annan, whose "management performance ... fell short of the standards that the United Nations Organization should strive to maintain."[35] Volcker was a director of the United Nations Association of the United States of America between 2000 and 2004, prior to his being appointed to the Independent Inquiry by Kofi Annan.
As of October 2006, he was the chairman of the board of trustees of the influential Washington-based financial advisory body, the Group of Thirty, and a member of the Trilateral Commission. He had a long association with the Rockefeller family, not only with his positions at Chase Bank and the Trilateral Commission, but also through membership of the trust committee of Rockefeller Group, Inc., which he joined in 1987. That entity managed, at one time, the Rockefeller Center on behalf of the numerous members of the Rockefeller family. He was a chairman and an honorary trustee of International House, the cultural exchange residence and program center in New York City. He was a founding member of the Trilateral Commission and a long-time member of the Bilderberg Group.
In January 2008, he endorsed Democratic presidential candidate Barack Obama.[36]
On April 8, 2008, he was the featured speaker at The Economic Club of New York. Volcker discussed "what appears to be in substance a direct transfer of mortgage and mortgage-backed securities of questionable pedigree from an investment bank to the Federal Reserve," and offered his detailed analysis and evaluation of interrelationships among the U.S. capital markets, Federal Reserve policies, and the economy as whole.[37]
Paul Volcker appeared in the Charles Ferguson's movie Inside Job. He was interviewed about current Wall Street CEO pay, claiming it is "excessive."[38]
Volcker was an economic advisor to President Barack Obama, heading the President's Economic Recovery Advisory Board.[39][40][41] During the financial crisis, Volcker was extremely critical of banks, saying that their response to the financial crisis was inadequate, and that more regulation of banks is called for.[42][43][44] Specifically, Volcker called for a break-up of the nation's largest banks, prohibiting deposit-taking institutions from engaging in riskier activities such as proprietary trading, private equity, and hedge fund investments.[45][46] Volcker left the board when its charter expired on February 6, 2011, without being included in discussions on how the board would be reconstituted.[47]
On January 21, 2010, President Barack Obama proposed bank regulations which he dubbed "The Volcker Rule," in reference to Volcker's aggressive pursuit of these regulations.[48] Volcker appeared with the president at the announcement. The proposed rules would prevent commercial banks from owning and investing in hedge funds and private equity, and limit the trading they do for their own accounts.[49] According to SEC Commissioner Luis A. Aguilar, "[t]he success or failure of the Volcker Rule will depend on the manner in which banking entities comply with the letter and spirit of the rule, and on the willingness of regulators to enforce it." [50]
Volcker was known to defy the stereotype of a Wall Street insider. A profile in The Week for February 5, 2010, claimed that Volcker doesn't even buy the conventional wisdom that "financial innovation" is necessary for a healthy economy. In fact, he likes to say, "the only useful banking innovation was the invention of the ATM."[51]
On April 6, 2010, at the New-York Historical Society's Global Economic Panel, Volcker commented that the United States should consider adding a national sales tax similar to the Value Added Tax (VAT) imposed in European countries, stating "If, at the end of the day, we need to raise taxes, we should raise taxes." [52]
https://en.wikipedia.org/wiki/Paul_Volcker
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.