Word: volckerism
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Dates: during 1980-1989
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Apart from the obvious political considerations, the administration privately anticipated the only real effect of the program would be psychological. Inflation feeds on expectations of future inflations, so a program that looked like it would work--could work. Thus Fed Chairman Paul A. Volcker comments on the limited credit controls, "What we're talking about is not a huge part of the credit scene, but it's a showy and symbolic one." John L. Murray, president of Universal Foods, sums up the general business reaction to Carter's program when he says it is "essentially symbolic...
...frank assessment of the price explosion that is menacing the U.S., comes from a senior official of Jimmy Carter's Administration. Moreover, it accurately reflects the drift and disarray that have characterized the Administration's economic policy over the past three years. As Federal Reserve Chairman Paul Volcker and Treasury Secretary G. William Miller fiddle with the depressing statistics, Carter seems able to do little more than cast his eyes heavenward. Meanwhile, a frantic search for another new anti-inflation program, which could be announced as early as this week, is under...
Federal Reserve Board Chairman Volcker, who would be responsible for administering any program of credit controls, remains opposed in principle to the concept. He objects, in addition, because any limitation on consumer credit would have a disproportionately severe impact on two sectors of the economy that are already suffering: housing and auto sales...
...Although Volcker still retains enormous respect from the business and banking communities, he is beginning to come under some criticism for failing to tighten down on credit and the money supply enough to cool off inflation. Says John F. McGillicuddy, chairman of New York City's Manufacturers Hanover Trust: "Money has not been particularly tight in large money-center banks. It has been expensive, but not all that tight." Selective credit controls, which could perhaps include a boost in the down payment required for a house or auto loan or an increase in the minimum monthly payment...
...financial capital, the New York office carries out day-to-day operations in money markets that determine the international value of the dollar and the level of domestic interest rates. The New York president even earns twice as much as his nominal boss in Washington. Federal Reserve Chairman Paul Volcker, the previous New York Fed president, has taken a cut to $60,700, a salary pegged to that of the highest paid sub-Cabinet members. Solomon will earn about $125,000, an income judged to be a bit closer to that of a private New York bank president...