Paul Volcker, the Fed Chair Who Had Reason to Keep an Eye on New Jersey

NJ Spotlight News | December 11, 2019 | Budget
The late chairman of the Federal Reserve, a Garden State native, co-chaired 2012 blue-ribbon task force that detailed NJ’s budgetary problems
Credit: Edmond J. Safra Center for Ethics
The late Paul Volcker

Former Federal Reserve chairman Paul Volcker said that New Jersey’s long-range fiscal problems — which he noted were numerous — should be left up to elected officials and the voters. Volcker, who died in New York City on Sunday at the age of 92, was speaking in 2012 on the release of recommendations by the State Budget Crisis Task Force, which he cochaired.

A key figure in American economic policy from the mid-‘70s through 2008, when he chaired President Barack Obama’s Economic Recovery Advisory Board, Volcker kept a keen eye on the Garden State economy. As he mentioned at a 2012 presentation of the task force report, he was born in Cape May, grew up in Teaneck, and had lived in Montclair, Plainfield, Princeton and Jersey City.

When Volcker was appointed by President Jimmy Carter to chair the Federal Reserve in 1979, inflation was in the double digits; he introduced restrictive monetary policies that are credited with eventually “taming” inflation. To his admirers, Volcker represents the zenith in economic theory-turned-to-action while his detractors consider him a technocrat who took untoward control of the economy, to the detriment of working people.

He was “a giant whose leadership, whether as Chairman of the Federal Reserve in the 1970s and 1980s or leading the Economic Recovery Advisory Board under President Obama, focused on restoring stability and faith in uncertain times,” Gov. Phil Murphy said in a statement on Volcker’s death, adding, “He, along with his wife Anke, was a friend to Tammy and me, visiting us during our time in Berlin, and offering his advice on how to jumpstart New Jersey’s economic engines. His admonition, ‘good policy is dependent on good management,’ is sage advice all of us in public office must heed, regardless of our politics, now more than ever.”

Senate President Steve Sweeney said, “We have lost one of the most important and consequential economic policy leaders of our time … He was a man of integrity who had the courage to make the best decisions for the right reasons. He put the country’s economic needs first, knowing the impact the policies would have on the lives of everyday Americans.”

As the Volcker legacy awaits final assessment, here’s part of his address at that 2012 presentation of the State Budget Crisis Task Force recommendations.

(NJSpotlight video by Steve Lubetkin/