Volcker_memoEssay Preview: Volcker_memoReport this essayINTEROFFICE MEMORANDUMDR. J. JONESPROFESSOR OF ECONOMICSFROM:H.R.SUBJECT: THE RIEGN OF VOLCKERDATE:1/28/2007More than a quarter of a century ago, President Jimmy Carter was saddled with disarray in his Administration in the midst of a rapidly declining U.S. economy. Attorney General Bell and Energy Secretary Schlesinger resigned, while Health, Education and Welfare Secretary Califano, Transportation Secretary Adams, and Treasury Secretary Blumenthal were forced out of their post. Former Federal Reserve Chair Miller replaced Blumenthal in the Treasury post leaving a very important vacancy, especially since the Carter administration saw their economic policies as a major re-election issue.
Suffice it to say that on the evening of June 1st, 2007, President Carter was confronted with growing economic troubles on a national level. A few days later, we had an opportunity to share some facts on a topic that President Carter and his Administration would most probably find a great pleasure discussing and discuss again in the coming months. We present a series of brief interviews and observations by Dr. David Rabinowitz, executive director of the Center for Economic and Policy Research (CEDAR), co-editor of the Federal Reserve Bank of New York Economic Journal (FedBIJ), a nationally-recognized economist and a former president of the Association for Economic Education. We discuss the Fed’s financial history, its policies of inflation, inflation rates and the way in which the Fed is handling all aspects of government policy. Rabinowitz outlines the Fed’s current policies, its most recent policy decisions (which he calls key “prices and other public data data”) and its fiscal outlook, including the Fed’s most recent quantitative easing, as well as its fiscal policy direction and the role the Fed should play in the economic recovery of the post-2008 recovery. Rabinowitz also discusses the key U.S. economic issues, including the Federal Reserve’s policy actions, the role of Congressional hearings and the Fed’s role in the fiscal and monetary discussions. Finally, we present a series of brief excerpts from a series of interviews and written comments made by Robert B. Kresser, the Chairperson of the Federal Deposit Insurance Corp. and a retired lawyer. Kresser discusses the Fed’s current and former policies, the Fed’s current fiscal policy direction, and the possible role of Congress in the monetary policy discussion (even though the federal government may not support the Fed due to its own policies). Kresser discusses the various topics discussed in this book: A History of the Federal Reserve System and Economic Change of the 1980s by Robert J. Kresser, the American Bar Association’s senior policy analyst and an adjunct professor at Rutgers University.
A History of the Federal Reserve System and Economic Change of the 1980s by Robert J. Kresser, the American Bar Association’s senior policy analyst and an adjunct professor at Rutgers University. The World in Review by Robert J. Kresser and David Rabinowitz: An Anthology of Economic History by Richard C. Smith.
and by Philip B. Miller and Peter F. Rector: A History of The World in Review by Richard C. Smith, Jr., the American Bar Association’s senior policy analyst. It should not be too surprising that the Fed is today the world’s first money transmitter, having been incorporated and run out of funds by the late 1990s. Money received from the Fed is now more freely available than ever. The Fed owns and controls the bulk of our money reserves and we cannot afford to let it go to
Suffice it to say that on the evening of June 1st, 2007, President Carter was confronted with growing economic troubles on a national level. A few days later, we had an opportunity to share some facts on a topic that President Carter and his Administration would most probably find a great pleasure discussing and discuss again in the coming months. We present a series of brief interviews and observations by Dr. David Rabinowitz, executive director of the Center for Economic and Policy Research (CEDAR), co-editor of the Federal Reserve Bank of New York Economic Journal (FedBIJ), a nationally-recognized economist and a former president of the Association for Economic Education. We discuss the Fed’s financial history, its policies of inflation, inflation rates and the way in which the Fed is handling all aspects of government policy. Rabinowitz outlines the Fed’s current policies, its most recent policy decisions (which he calls key “prices and other public data data”) and its fiscal outlook, including the Fed’s most recent quantitative easing, as well as its fiscal policy direction and the role the Fed should play in the economic recovery of the post-2008 recovery. Rabinowitz also discusses the key U.S. economic issues, including the Federal Reserve’s policy actions, the role of Congressional hearings and the Fed’s role in the fiscal and monetary discussions. Finally, we present a series of brief excerpts from a series of interviews and written comments made by Robert B. Kresser, the Chairperson of the Federal Deposit Insurance Corp. and a retired lawyer. Kresser discusses the Fed’s current and former policies, the Fed’s current fiscal policy direction, and the possible role of Congress in the monetary policy discussion (even though the federal government may not support the Fed due to its own policies). Kresser discusses the various topics discussed in this book: A History of the Federal Reserve System and Economic Change of the 1980s by Robert J. Kresser, the American Bar Association’s senior policy analyst and an adjunct professor at Rutgers University.
A History of the Federal Reserve System and Economic Change of the 1980s by Robert J. Kresser, the American Bar Association’s senior policy analyst and an adjunct professor at Rutgers University. The World in Review by Robert J. Kresser and David Rabinowitz: An Anthology of Economic History by Richard C. Smith.
and by Philip B. Miller and Peter F. Rector: A History of The World in Review by Richard C. Smith, Jr., the American Bar Association’s senior policy analyst. It should not be too surprising that the Fed is today the world’s first money transmitter, having been incorporated and run out of funds by the late 1990s. Money received from the Fed is now more freely available than ever. The Fed owns and controls the bulk of our money reserves and we cannot afford to let it go to
Suffice it to say that on the evening of June 1st, 2007, President Carter was confronted with growing economic troubles on a national level. A few days later, we had an opportunity to share some facts on a topic that President Carter and his Administration would most probably find a great pleasure discussing and discuss again in the coming months. We present a series of brief interviews and observations by Dr. David Rabinowitz, executive director of the Center for Economic and Policy Research (CEDAR), co-editor of the Federal Reserve Bank of New York Economic Journal (FedBIJ), a nationally-recognized economist and a former president of the Association for Economic Education. We discuss the Fed’s financial history, its policies of inflation, inflation rates and the way in which the Fed is handling all aspects of government policy. Rabinowitz outlines the Fed’s current policies, its most recent policy decisions (which he calls key “prices and other public data data”) and its fiscal outlook, including the Fed’s most recent quantitative easing, as well as its fiscal policy direction and the role the Fed should play in the economic recovery of the post-2008 recovery. Rabinowitz also discusses the key U.S. economic issues, including the Federal Reserve’s policy actions, the role of Congressional hearings and the Fed’s role in the fiscal and monetary discussions. Finally, we present a series of brief excerpts from a series of interviews and written comments made by Robert B. Kresser, the Chairperson of the Federal Deposit Insurance Corp. and a retired lawyer. Kresser discusses the Fed’s current and former policies, the Fed’s current fiscal policy direction, and the possible role of Congress in the monetary policy discussion (even though the federal government may not support the Fed due to its own policies). Kresser discusses the various topics discussed in this book: A History of the Federal Reserve System and Economic Change of the 1980s by Robert J. Kresser, the American Bar Association’s senior policy analyst and an adjunct professor at Rutgers University.
A History of the Federal Reserve System and Economic Change of the 1980s by Robert J. Kresser, the American Bar Association’s senior policy analyst and an adjunct professor at Rutgers University. The World in Review by Robert J. Kresser and David Rabinowitz: An Anthology of Economic History by Richard C. Smith.
and by Philip B. Miller and Peter F. Rector: A History of The World in Review by Richard C. Smith, Jr., the American Bar Association’s senior policy analyst. It should not be too surprising that the Fed is today the world’s first money transmitter, having been incorporated and run out of funds by the late 1990s. Money received from the Fed is now more freely available than ever. The Fed owns and controls the bulk of our money reserves and we cannot afford to let it go to
President Carter needed a Federal Reserve chairman who was strong, experienced, respected, tough on inflation, and willing to fight conventional wisdom on how to boost the U.S. economy. The position was offered to and accepted by Paul Volcker, President of the Feds most powerful member, the Federal Reserve Bank of New York. Volcker was very familiar with existing Fed policies, and knew he would have to make some significant changes to stabilize a dismal downward trending economy. He believed the Fed had to attack inflation more aggressively by putting the brakes on money supply growth. It was Volckers charge to persuade the Fed Open Market Committee (FOMC) who sets the Fed policy to trust him and follow his lead. He would also have to build and maintain a working relationship with the International Banking community, to assist with Global financial harmony.
Volckers operating procedures proved to be bold, unconventional, and risky in the eyes of most economists. Almost immediately following his appointment, the Fed increased the discount rate a full percentage point to 12% and introduced a marginal reserve requirement on some managed liabilities. The Fed then permitted the funds rate to vary within 11.5% to 15%. Also the discount rate would be managed flexibly to discourage excessive borrowing. All of these actions were