Volcker Biographer: Bernanke needs to embrace lessons of 1970s

Historians in the News

The ideas and legacy of Paul A. Volcker loom as large in contemporary economic debates as his 6’7″ frame. From the merits of the most recent Federal Reserve actions to boost the economy to how to regulate Wall Street, many of the challenges of today have echoes of those that the former Fed chief grappled with in a five-decade career. William L. Silber has written a rich and detailed new biography of a man who has left as deep an imprint on the world economy as anyone of his generation. Silber, a professor at New York University and author of a bestselling textbook on money and banking, discussed the lessons for the present from his new book, “Volcker: The Triumph of Persistence.”

Washington Post: What do you see as the lessons that Ben Bernanke and the current Federal Reserve should be taking from Volcker’s experience in the 70s and 80s?

William L. Silber: I’m going to preface what I say with this: Bernanke gets an A for what he did in 2008. He did exactly what a central banker, knowing the history of the Great Depression, should have done when confronted with the potential for panic. Open up the floodgates and lend. But now he should worry about the fallout from remaining too easy for too long, which Volcker maintains is the reason we lost the battle against inflation before....

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