Excerpt from the Washington Post:
Paul A. Volcker, a hard-headed economic statesman who as chairman of the Federal Reserve from 1979 to 1987 shocked the U.S. economy out of a cycle of inflation and malaise and so set the stage for a generation of prosperity, died Dec. 8 at his home in Manhattan. He was 92.
Mr. Volcker was a giant of a man, standing 6-foot-7, with a stature that came from his mastery of finance, his doggedness in navigating bureaucracies and his sheer toughness. His was an imposing moral authority acquired the hard way, the reason in his later years that he was enlisted for such knotty tasks as unraveling the holdings of Holocaust victims in Swiss banks and investigating the United Nations’ oil-for-food program in Iraq.
Mr. Volcker’s greatest historical mark was in eight years as Fed chairman. When he took the reins of the central bank, the nation was mired in a decade-long period of rapidly rising prices and weak economic growth. Mr. Volcker, overcoming the objections of many of his colleagues, hiked interest rates to an unprecedented 20 percent, drastically reducing the supply of money and credit.
Mr. Volcker was pilloried by industry, labor unions and lawmakers of all ideological stripes. He took the abuse, convinced that this shock therapy would finally break Americans’ expectations that prices would forever rise rapidly and that the result would be a stronger economy over the longer run.
On this biggest of questions, he was right.