| Paul Volcker | |
|---|---|
| Chairperson of the President's Economic Recovery Advisory Board | |
| In office February 6, 2009 – February 23, 2011 |
|
| President | Barack Obama |
| Preceded by | Position established |
| Succeeded by | Jeffrey Immelt (Council on Jobs and Competitiveness) |
| 12th Chairman of the Board of Governors of the Federal Reserve | |
| In office August 6, 1979 – August 11, 1987 |
|
| President | Jimmy Carter Ronald Reagan |
| Preceded by | William Miller |
| Succeeded by | Alan Greenspan |
| President of the Federal Reserve Bank of New York | |
| In office May 2, 1975 – August 5, 1979 |
|
| Preceded by | Alfred Hayes |
| Succeeded by | Anthony Solomon |
| Personal details | |
| Born | Paul Adolph Volcker, Jr. September 5, 1927 Cape May, New Jersey, United States |
| Political party | Democratic Party |
| Alma mater | Princeton University Harvard University London School of Economics |
| Profession | Economist |
Paul Adolph Volcker, Jr.[1] (born September 5, 1927) is an American economist. He was the Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with ending the high levels of inflation seen in the United States in the 1970s and early 1980s. He was the Chairman of the Economic Recovery Advisory Board under President Barack Obama from February 2009[2] until January 2011.[3]
Contents |
Volcker was born in Cape May, New Jersey, the son of Alma Louise (née Klippel) and Paul Adolph Volcker.[4][5] His grandparents were all German immigrants.[4] Volcker grew up in Teaneck, New Jersey, where his father was the township's first municipal manager. As a child, he attended his mother's Lutheran church, while his father went to an Episcopal church. Volcker graduated from Teaneck High School[6] in 1945.
Volcker's undergraduate education was at Princeton University; he graduated in 1949. He earned his M.A. in political economy from Harvard University's Graduate School of Arts and Sciences and Graduate School of Public Administration in 1951 and then attended the London School of Economics from 1951 to 1952 as a Rotary Foundation Ambassadorial Fellow, under the Rotary's Ambassadorial Scholarships program.
Volcker has received honorary degrees from several educational institutions including: Hamilton College (1980), University of Notre Dame, Princeton University, Dartmouth College, New York University, University of Delaware,[7] Fairleigh Dickinson University, Bryant College, Adelphi University, Lamar University, Bates College (1989), Fairfield University (1994), Northwestern University (2004), Rensselaer Polytechnic Institute (2005), Brown University (2006), Georgetown University (2007), Queen's University at Kingston in Canada (2009), and Amherst College (2011).[8]
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.[9] 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.
From 1969 to 1974, Mr. Volcker served as under-secretary of the Treasury for international monetary affairs. He played an important role in the decisions leading to the U.S. suspension of gold convertibility in 1971, which resulted in the collapse of the Bretton Woods system. In general he acted as a moderating influence on policy, advocating the pursuit of an international solution to monetary problems. After leaving the U.S. Treasury, he became president of the Federal Reserve Bank of New York from 1975 to 1979, leaving to become the chairman of the Federal Reserve in August 1979.
In 1975, Mr. Volcker also became a senior fellow in the Woodrow Wilson School of Public and International Affairs at Princeton University.
Paul Volcker, a Democrat,[10] was appointed Chairman of the Board of Governors for the Federal Reserve System in August 1979 by President Jimmy Carter and reappointed in 1983 by President Ronald Reagan.[11]
Volcker's Fed is widely credited with ending the United States' stagflation crisis of the 1970s. Inflation, which peaked at 13.5% in 1981, was successfully lowered to 3.2% by 1983.[12]
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.
Volcker's Fed 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 the high interest rates on the construction and farming sectors, culminating in indebted farmers driving their tractors onto C Street NW and blockading the Eccles Building.[13]
Nobel laureate Joseph Stiglitz said about him in an interview:
Congressman Ron Paul, well-known as a harsh critic of the Federal Reserve, has offered qualified praise of Volcker:
Congressman Ron Paul also said in a 2011 presidential debate that "If I had to name a Federal Reserve chairman that did a little bit of good, that would be Paul Volcker."
After leaving the Federal Reserve in 1987, he became chairman of the prominent New York investment banking firm, J. Rothschild, Wolfensohn & Co., a corporate advisory and investment firm in New York, run by James D. Wolfensohn, who later became president of the World Bank.
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.[16]
In April 2004, the United Nations assigned Volcker to research possible corruption in the Iraqi Oil for Food program. In the report summarising 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".[17] However, while Volcker did not implicate the Secretary General in the selection process, 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."[18] 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 is the current Chairman of the Board of Trustees of the influential Washington-based financial advisory body, the Group of Thirty, and is a member of the Trilateral Commission. He has 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. (RGI), which he joined in 1987. That entity managed, at one time, the Rockefeller Center on behalf of the numerous members of the Rockefeller clan. He currently serves as Chairman of the Board of Trustees of the International House in Manhattan, NY. He was a founding member of the Trilateral Commission and is a long time member of the Bilderberg Group.
In January 2008, he endorsed Democratic Presidential Candidate Barack Obama for President.[19]
On April 8, 2008, he was the featured speaker at "The Economic Club of New York" and spoke about the issues and causes of the 2008 US recession, and critiqued the 2008 US financial system and the 2008 Federal Reserve policies.[20]
Volcker was an economic advisor to President Barack Obama,[21][22] heading the President's Economic Recovery Advisory Board.[23] During the financial crisis, Volcker has been extremely critical of banks, saying that their response to the financial crisis has been inadequate, and that more regulation of banks is called for.[24][25][26] Specifically Volcker has called for a breakup 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.[27][28] Volcker left the board when its charter expired on February 6, 2011, without being included in discussions on how the board would be reconstituted.[29]
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.[30] 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.[31]
Volcker has been known to defy the stereotype of a Wall Street insider. A profile in The Week magazine for February 5, 2010, claimed that Volcker
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".[33]
Paul Volcker serves as an Honorary Co-Chair for the World Justice Project. The World Justice Project works to lead a global, multidisciplinary effort to strengthen the rule of law for the development of communities of opportunity and equity.
Volcker married Barbara Bahnson, the daughter of a physician, on September 11, 1954. She died on June 14, 1998, having suffered from lifelong diabetes, as well as rheumatoid arthritis. They had two children, Janice, a nurse and a Georgetown University graduate,[34] and James, a research assistant and a New York University graduate[35] who was born with cerebral palsy, as well as four grandchildren.[9][36][37] Over Thanksgiving, 2009, he became engaged to marry Anke Dening, a long-time assistant.[38] They eloped in February 2010.[39]
Volcker is an avid fly-fisherman,[40] having recounted, "The greatest strategic error of my adult life was to take my wife to Maine on our honeymoon on a fly-fishing trip."[41][42] Volcker is also known as "Tall Paul" for his height of 6 feet 7 inches (2.01 m),[43][44] standing exactly a foot (30 cm) taller than his wife when they first met.[9]
| Political offices | ||
|---|---|---|
| Preceded by Alfred Hayes |
President of the Federal Reserve Bank of New York 1975–1979 |
Succeeded by Anthony Solomon |
| Preceded by William Miller |
Chairman of the Federal Reserve 1979–1987 |
Succeeded by Alan Greenspan |
| New office | Chairperson of the President's Economic Recovery Advisory Board 2009–present |
Succeeded by Jeffrey Immelt as Chairperson of the Council on Jobs and Competitiveness |
|
|
|||||||
|
|
|||||