Why should we not like Paul Volcker? Was he not the one who helped Reagan break the back of Carter’s stagflation in the early 1980’s?
No. in fact, he caused damage at the time, and actively sabotaged Reagan’s plans.
The first thing to remember: Volcker was and is a Democrat!
The “usual wisdom” is that the recession in Reagan’s first term was a necessary result from stopping inflation. Various economists and Reagan advisors (e.g. George Shultz) have shown that Volcker’s manipulation of the money supply, a type of socialist managing of the economy, was preventing the economy from rebounding: instead, he should have focused on interest rates.
Markets responded positively to the long-term prospects of a Reagan presidency in 1980, but Volcker kept up his “tight money” policies, preventing a nascent recovery and spawning a recession instead. To make the recession even deeper, Volcker actively, but quietly, campaigned against Reagan’s tax cut ideas (remember that Reagan was just an actor, and not really very smart), and in fact lobbied Republicans to vote for a tax increase, which they did, sabotaging Reagan’s initial tax cuts of 1981!
The political result was the Republicans losing over 20 seats in the next election, and a second Reagan term looking not quite so obvious.
So expect Volcker to continue reiforcing BIG BRObama’s socialist, anti-growth War On Business, complete with class-envy and blame games about how the W. Bush tax cuts have actually caused our recession, not multi-trillion dollar deficits caused by giveaways to the Lumpenproletariat and the elite liberal bases of the Dem Party.
An excellent article with more technical details and the names of several books on these issues can be found here: