Summary
PBS NewsHour column written as a Volcker obituary (December 2019) arguing that Volcker’s legacy — Fed independence — is under threat from Trump I’s attacks on Powell. The piece contrasts Burns’s capitulation with Volcker’s resistance, and calls for reaffirming central bank independence. Though written in 2019, the argument is structurally identical to what’s happening in 2025 under Trump II.
Key Points
- Volcker’s biggest legacy wasn’t killing inflation — it was proving that an independent central bank works
- Burns and Nixon: Burns kept rates low before 1972 election → inflation rose from 3.2% at end of 1972 to over 11% by 1975
- Volcker took over August 1979 with inflation above 13%; raised rates to “a hair’s breadth below 20%”
- Facing protests: home builders sent two-by-fours to the Fed; auto dealers mailed car keys; farmers drove tractors around HQ
- Facing pressure: Reagan’s chief of staff ordered Volcker not to raise rates before the 1984 election (secret meeting)
- By 1983, inflation had plunged below 4%; “economic recovery lasted until July 1990”
- Five living former Fed chairs (including Volcker) argued jointly for central bank independence shortly before Volcker’s death
Newsletter Angles
- The piece was written in 2019 about Trump I — and reads as if written in 2025 about Trump II. The template is identical.
- The five-former-chairs statement is worth referencing as a data point on how unusual Trump’s attacks were even by 2019 standards
- The Burns/Volcker binary (capitulate vs. resist) is the cleanest framework for explaining what’s at stake in 2025
Entities Mentioned
- Paul Volcker — the subject; died December 8, 2019
- Arthur Burns — the negative archetype; capitulated to Nixon
- Federal Reserve — institution their legacies shaped
- Jerome Powell — the current chair being pressured (in 2019 as in 2025)
- Donald Trump — the current president pressuring the Fed
Concepts Mentioned
- Fed Independence — the core concept the piece defends
- Stagflation — the outcome Burns’s failures helped create
Quotes
“Arthur Burns… helped ignite the inflationary spiral with his efforts to help President Richard Nixon win reelection in 1972 by keeping interest rates low to supercharge the economy.”
“In protest of the pain his policies were causing, home builders sent unused two-by-fours to the Fed in Washington, D.C., auto dealers mailed keys to the cars they couldn’t sell and farmers drove tractors around the bank’s headquarters.”
“Just as we want our judges to make decisions based on the law, not politics, we need our central bankers to steer the economy free of political pressures.”
Notes
Written 2019; published on PBS NewsHour. The Trump I context (first-term attacks on Powell) makes it directly applicable to the 2025 situation. Klein is an academic economist writing in The Conversation.