Board Member Sheila Bair: The Legacy of Paul Volcker
[This excerpt is taken from a tribute originally published by the National Association of Business Economists (NABE).]
Thank you for letting me join this tribute to Paul Volcker, because he was someone who I deeply admired, and to be able to speak to his legacy is a special opportunity.
You had asked us to begin with what we viewed as his legacy.
I think, for me, it’s really that he was a model public serv-ant. That emanated from his fame in breaking the back of runaway inflation, and he was famous: This tall New Yorker was famous even in my neck of the woods back in Kansas, where he wasn’t very popular with the farmers. But for the traditionalists who liked to save money and not borrow, his efforts were welcomed and respected. And he got a lot of pushback for that. The politicians called for his ouster. Popu-lists called for his head.
I was doing a little research on this because I remember it got quite ugly. The realtors even had a noose-shaped lapel printed up for their members that said, “Hang Tall Paul!” So, he put up with a lot, but he and his Board kept the rates high until inflation was broken. We’ve had a lot of price stability since then, and we can thank him for that.
That one instance was just a small part of his career. But it was so widely known, and I think it really helped serve as a role model, and led a lot of people like me, and later genera-tions, to pursue careers in government service, particularly in financial regulation and policy.
When we saw him, we saw government service as an end to itself. It was a way to achieve tremendous public good. It’s a job noble and prestigious in its own right, not just a spin through a revolving door before landing a job on Wall Street. He believed in public service both as a means to an end, and an end in itself.
There was no better evidence of Paul’s complete devotion to the ideal of public service than that he spent the last years of his life in building the Volcker Alliance, where I’ve been proud to serve as a founding director. He understood that good policy was dependent on good management. And that good management depended on excellence in education and training of our public servants.
That is the Volcker Alliance’s credo and mission, and I’ve been very proud to serve in pursuit of that noble cause. Because we need more Paul Volckers: We need them now more than ever. We need his brand of leadership, particularly now as we confront skyrocketing deficits and ultra-low-to-negative interest rates for as far as the eye can see.