An interview with Paul A. Volcker

Paul A. Volcker has spent most of his life in public service, at the Treasu ry under President Kennedy(1962-1965) and then as Undersecretary for Moneta ry Affairs under President Nixon (1969-1974), as President of the Federal R eserve Bank of New York (1975-1979), and finally as Chairman of the Board o f Governors of the Federal Reserve System under both president Carter and p resident Reagan (1979-1987). Born in 1927, his world view was formed by chi ldhood experience of the Great Depression and World War II, times of great national trial that led ultimately to recommitment and reconstruction. He w ent into public service in order to be a part of the rebuilding effort, but it was his fate instead to be involved mainly in managing pressures that w ould ultimately lead to the breakdown of the Bretton Woods system internati onally and the Glass-Steagall banking system domestically. Consequently, th ere: is some sadness today when he looks back on his career, but there is a lso a sense of accomplishment. in spite of everything, there was no depress ion and there was no world war. The possibility and hope for progress in ye ars to come remains alive. The interview took place in Volcker's office at Rockefeller Center in New Y ork City. His fourth-floor windows look out over the sunken plaza to the go ld-leafed statue of Prometheus stealing fire from the gods, and then on far thar to the elegant GE building, which is familiar to anyone who has visite d New York. Over the front entrance it is just possible to see the inscript ion adapted from Isaiah 33:6,"Wisdom and Knowledge shall be the stability o f thy times." It strikes me as an appropriate inscription for the building, reminding one that this most beautiful complex was built in the years of t he Great Depression. Today, with the forthcoming interview in mind, it remi nds me also of the stakes involved in the conduct of monetary policy.