Before his death, legendary Fed chief Paul Volcker issued one last warning to the US
S E E D E D C O N T E N T
The legendary Federal Reserve Chairman Paul Volcker died on Tuesday at the age of 92, but he had a final warning for an American public wrestling with a declining trust in government and each other.
The Financial Times published the afterword in Volcker's upcoming autobiography which the newspaper said was written in September, three months before his death.
In it, Volcker condemned President Trump's efforts - without naming him - to pressure the Federal Reserve to lower interest rates in an attempt to juice US economic growth, already undergoing its longest sustained expansion.
"Not since just after the second world war have we seen a president so openly seek to dictate policy to the Fed. That is a matter of great concern, given that the central bank is one of our key governmental institutions, carefully designed to be free of purely partisan attacks," the former Fed chairman wrote.
Volcker said he trusted the members of the Fed will fend off any attempts to interfere in its monetary policy decisionmaking so it may act "free of partisan political purposes."
Trump has repeatedly assailed Jerome Powell, the current Fed chair, for not cutting rates. Back in August, Trump called Powell an "enemy" of the United States comparable to China, the Washington Post reported.
The former Fed chair painted a very bleak portrait of the nation's political environment, noting "forces" are rolling back environmental and other protections considered emblematic of American democracy.
"Increasingly, by design or not, there appears to be a movement to undermine Americans' faith in our government and its policies and institutions," Volcker wrote. "We've moved well beyond former president Ronald Reagan's credo that 'government is the problem,' with its aim of reversing decades of federal expansion."
He went on: "Today we see something very different and far more sinister. Nihilistic forces are dismantling policies to protect our air, water, and climate. And they seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free press, the separation of powers, the belief in science, and the concept of truth itself."
Volcker was best-known for waging a campaign to subdue inflation in the late 1970s and early 1980s as Fed chairman. He later sought to keep regulations in place to oversee the financial industry and became an advocate for financial reform.
The former Fed leader later chaired Obama's Council of Economic Advisory Board after the banking system teetered on the edge of total collapse in 2008.
Photo: © Alex Wong/Getty Images
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Sounds about right. We do have people trying to undermine and discredit departments and aspects of government, deregulation of everything and sowing discord/distrust in agencies.
Yes, we do and some of them are right here on NT.
I swear, some would rather burn down the house that try to put out any flames.
My comment rings true. You are only proving the premise correct.
Now there is a compelling argument. Put fingers in ears and say no.
My so called argument is going by ones own comments.
One thing people cannot deny.
Hey, your comments....
Or are you trying to say to not go by what people actually type out...
I understand feeble attempts at misdirection.
I’m more concerned about people who think the president loses his freedom of speech as soon as he’s sworn in. Let the man talk. No one is making you do what he says.
No, it’s designed to be free of day-to-day partisan control. However, members of the board of governors are still appointed by the president and approved by the Senate, so there is some political influence. There is nothing that says political people can’t criticize the central bank.
The Supreme Court is also supposed to be independent and free of political “influence” but that hasn’t kept presidents from being highly critical of the decisions they make. Invariably, when they do speak up, we hear the other side cry out about the threat to an independent judiciary. It’s the same insecure nonsense. I am suspicious of people whose first response seems to be trying to get someone else to shut up.
I didn't read anywhere where anyone was saying the pres has to shut up.
He was talking about influence.
It is about more than one person. It is about what seems like a concerted effort to undermine all aspects of government.
Undermine? Or be skeptical of it? I see the latter. The machinery seems to be humming along just fine. If Americans (high or low) are maybe not so trusting of our bureaucracy, I think that’s healthy.
He literally said the president speaking so openly about fed policy is a problem. That sounds like Volcker is telling the president to shut up.
We both know it is better to have a healthy skepticism.
I think we also both know there are people that will decry a whole organization as crooked just because of something they don't like.
Sorry but I don't think the pres or other top officials telling their followers that an agency is corrupt just because they don't like what they are doing is healthy.
Neither is putting people in charge of agencies that wanted them dismantled.
That was still only one aspect of what he was trying to convey. Only picking one part of the whole is doing him an injustice.
Anybody can take it too far, and I certainly think Trump does that now and then. I remember Obama’s comments about Citizens United made it sound like he thought the SCOTUS was crooked. We have to respond and adjust to that, not try to get him to stop talking.
Sadly I agree with him. I think CU has caused a lot of the problems we have today.
And he still wasn't just talking about a president, though he fits the criteria.