In Memoriam

NABE Remembers Paul A. Volcker (1927 - 2019)

The NABE President and Board wish to mark the passing of Paul A. Volcker, former Chairman of the Federal Reserve System, and a longtime supporter of NABE. Paul Volcker received the first NABE Lifetime Achievement Award for Economic Policy, which was later named in honor of him, and spoke at NABE meetings.

Paul Volcker was an archetype business economist in that he was able to turn his considerable economic talents and intellect whichever way was required in the situation to achieve result.  Trained as an economist at Princeton, he worked as a  business economist in banking, then a policymaker in the U.S. Treasury.  But of course he is most recognized for his towering reputation as a central banker at a crucial juncture in the 20th century.

Paul Volcker is best remembered today as the two-term Chair of the Federal Reserve Board from 1979 to 1987. Upon being confirmed, Volcker moved swiftly to tame inflation, which hit 14 percent in 1980, adopting a tight money policy aimed at aggressive disinflation. The federal funds rate under Chairman Volcker peaked at almost 19 percent in December of 1980. These policy actions were massively unpopular, and they contributed to a doubling of the rate of unemployment and a recession. But inflation was whipped. Volcker’s resolute actions in the face of widespread opposition set the stage for a sustained period of stable inflation and the return of growth. Make no mistake: that period was difficult. Volcker recounts how in 1984 he was called to the White House by Jim Baker, then Ronald Reagan’s Chief of Staff. President Reagan was present but remained uneasily silent. Baker, speaking for the president, told Volcker he opposed any interest rates rises in advance of the upcoming elections. Volcker thought to himself, “What to say? What to do?” His response? He got up and walked out without saying a word. That is how you send a signal on the Federal Reserve System’s  independence. This is a matter that remains even more important today.

Like the best of our number, Mr. Volcker did not stop working when he retired from government and central banking. To the contrary. He never retired, working as a dedicated public servant and advisor to the very end of his life.  Two - of a great many - instances demonstrate this dedication.

From 1996 to 1999, Volcker chaired the inquiry into Nazi-era assets owned by Holocaust victims held by Swiss banks. Ultimately, the Volcker Commission discovered 21,000 accounts held by Holocaust victims and another 15,000 that needed claims analysis. Based on the Commission’s work, $1.29 billion in distributions were secured for Holocaust victims and their heirs.

At the request of then-UN Secretary General Kofi Annan, Volcker chaired an inquiry into the UN Oil for Food Program from 2004–2005. In that endeavor, he uncovered $1.8 billion in corruption and kickbacks, with $10 billion in oil having been smuggled out of Iraq. 

These types of challenges are typical of Mr. Volcker: Always being asked to tackle the hardest problems. Always willing to step up.  Always willing to go where the evidence took him.  

Paul Volcker was a model economist we can all emulate and learn from. A principled man. An advisor who spoke truth to power and used data for the common good. In government, central banking and the private sector. A prudent and decent man. Loyal. Supportive. A leader. A friend of NABE. It is striking that Mr. Volcker leaves no animus behind him - only admiration and loyal friends and colleagues across the globe. 

At a time when we have too few examples of what it is to be a person of strength, decency, fortitude, humanity, and humor, in a world which is characterized by a lack of these qualities and a preponderance of toxic language and practices, Paul Volcker’s life shows how we should act and hold ourselves. Rest In Peace Chairman Volcker.

(Written by former NABE President Stuart Mackintosh on behalf of the NABE Board)