This may be hard to imagine but at one point in my life I was wearing $1,000 wool suits — black of course — nylons and heels. I was commuting every weekday to San Francisco on BART carrying a spiffy leather briefcase; riding up to the top of the Ninth District Federal Reserve Bank to arrive at my cubicle just adjacent to Fed President Robert “Bob” Parry’s office.
I was responsible for any marketing or communication document going out from the Fed to our member banks — writing, editing and proofing — as well as for monitoring the printed accuracy of “Federal Reserve Green,” which had its own Pantone formula and number.
From the distance of my porch in Nahcotta (or anywhere for that matter), this all sounds like the height of idiocy. At the very least it now seems like the life of someone I vaguely remember from long ago and far away; though in those heady corporate days I was hook, line, and sinker involved in what I was doing.
I’d managed to scramble into the Fed through the back door with my humanities degrees because a smart fellow named Mark Tanaka reasoned that I could talk to people and write; and as for data crunching, he could teach me that. So my first job was managing a huge batch of West Coast savings and loans by running data to determine the numbers and amounts of their jumbo CDs (part of what is called the “M1” money supply). If I noticed an amount larger than a predetermined cap, I would call and ask what was going on and write up a report about it. (The M1 and M2 numbers are still rounded up nationally and published in the financial pages of most urban newspapers.)
One day, I happened to have lunch in the staff cafeteria sitting, unbeknownst to me, next to an executive vice president who talked to me for a while and then said, “There’s a job in the marketing department you should apply for.” I said, “What’s marketing?” Thus began another dogleg in my already jig-jaggedy career — and one, mind you, that I wouldn’t have changed for anything.
Eventually I became Public Information Officer at the Federal Reserve Bank in Los Angeles, but not before we all got word that the Fed Chairman himself, Paul Volcker, was going to visit our digs in San Francisco.
Towering pubic servant
As Paul Solmon said on the PBS News Hour last week, “At 6’7” Paul Volcker was known as ‘Tall Paul.’ Indeed, he towered over economic policy for more than 60 years. President Jimmy Carter appointed Volcker to head the Federal Reserve in ‘79 when the U.S. faced runaway inflation. Volcker, never without a cigar, choked off the money supply, driving up interest rates to discourage lending and borrowing.”
Actually the U.S. economy was in a weird state of affairs called “stagflation” — a combination of both high inflation and rising unemployment. Not many economists even understood exactly what was happening. If you’re old enough, though, you may remember those times because interest rates for everyday things like car loans and mortgages shot up into the high double digits. Everybody was hurting because so many things were financially out of reach for everyday folks. And even if you could afford a house, who would want to lock in a mortgage rate at 18 percent?
Us common folk complained to each other and to our local government reps, who complained to their federal counterparts, who complained to people in the upper echelons of government. The unemployment rate reached 11 percent, and all of this probably cost Carter the election — though he is quoted as saying, “Although some of Volcker’s policies were politically costly, they were the right thing to do.”
Volcker stood tall on his policies, literally. There’s one photograph I love of President Reagan (who himself was 6’1”) at the microphone with the enormous figure of Volcker looming over his shoulder behind him. In fact Volcker’s stature made everyone of normal height look like yard gnomes.
During those months of pain and uncertainty, Volcker did not waiver; and eventually the economy righted itself: interest rates and unemployment shifted back into “normal” territory. Robert Kavesh, a professor at New York University, remembers his lifelong friend this way, “The economic hero of post-World War II America I would have to say was Paul Volcker.”
Anyway, Paul Volcker visiting our San Francisco Fed would be something like the Pope coming to St. Mary’s Catholic Church in Long Beach. All of us “upstairs staffers” got spiffed up for the day and were on our best behavior. Volcker arrived with no fancy entourage or security detail that I remember. It was just him and the surprise about how down-home and friendly he was. Just an ordinary guy, albeit enormous. He talked to all of us and shook our hands. But even more endearing was what happened next.
The ground floor of the SF Fed had a series of games and displays meant to appeal to tourists, parents and kids, or anyone who might wander in off Market Street curious about what the Fed does. One of the stations had a video game (but don’t even imagine anything close to the gaming we now have) that challenged the player to try to tame inflation — the exact problem that Volcker’s strident policies had, by this time, brought into line. He gamely walked up to this video and pitted himself against the machine.
Lights blinked and flashed, sounds rattled away as he turned dials, and numbers went up and down. Finally he received the ignominious message that he had failed in his effort to pacify inflation. The machine had won. We all went silent and embarrassed beside him, until he let out the biggest, most boisterous laugh perhaps ever heard in the hallowed hallways of the Fed. Then we all chimed in.
A model we need today
Suffice it to say, Volcker cemented in my mind the essence of a superlative public servant. He was humble, knowledgeable, approachable, and did what he knew was right even when he was savaged for it. Volcker was even getting death threats during the worst of his policy changes. But he stood steady and did what he knew would strengthened our country. (I might also add that despite being one of the most powerful moneymen in the country, he lived in a modest Washington D.C. apartment; and he left public life for a time to nurse his first wife of four decades during the last years of her life. Twelve years later, at 82, he married his longtime assistant.)
Janet Yellen, who served as Fed chair from 2014 to 2018, said Volcker “embodied the values we hold most dear: devotion to public service, the courage to do the right thing, even when it’s immensely unpopular.”
Paul Volcker died at 92 last week. I remember him fondly and with enormous respect. In our current environment, I’m afraid the concept of “public servant” that he so clearly personified is endangered if not already extinct.