The last true enemy of inflation the Federal Reserve has seen died earlier this week.

Paul Volcker, former chairman of the Federal Reserve from 1979-1987, has passed away.

Credited with tampering incredibly high levels of inflation during the Carter and Reagan administration by jacking up interest rates to unpleasant levels, Volcker’s passing harkens back to a time when central bankers weren’t afraid to make tough choices.

Volcker instinctively knew that central planning of the economy by tugging on monetary policy levers was not only a tall order, but also wouldn’t ultimately succeed.

In an interview the former chairman said about the Keynesian “religion,” “…I was a bit turned off by the precision and certainty that these people attached to the doctrine. The analytical framework was very convincing but this feeling they had, that they could press the right buttons and manage the economy pretty exactly, for some reason it turned me off.”

Tall Paul (Volcker was reportedly 6’7”) was also the last chairman of the Federal Reserve who maintained plausible political independence, publicly butting heads with President Carter and President Reagan.

Though Volcker was one of the main architects of closing the gold window and once declared that “gold was the enemy,” he nevertheless seemed at least to understand the severe damage that inflation causes.

In an interview with PBS, Volcker said, “inflation is thought of as a cruel, and maybe the cruelest, tax because it hits in a many-sectored way, in an unplanned way, and it hits the people on a fixed income hardest. And there’s quite a lot of evidence, contrary to some earlier thinking, that it hit poorer people more than rich people…”

Continue reading: https://bit.ly/36rb6EM