Saw Carter More in 2 Yrs. Than Reagan in 6: Volcker

Departing Federal Reserve Board Chairman Paul A. Volcker said today that he met more often with former President Jimmy Carter than with President Reagan, under whom he served the bulk of his eight years at the central bank.

“I met more frequently with President Carter than President Reagan, and on a greater variety of issues,” Volcker told the Senate Banking Committee in his penultimate appearance before Congress as Fed chairman.

Volcker was appointed by Carter in 1979 and helped to bring raging U.S. inflation under control but apparently harmed Carter’s 1980 reelection bid in the process. In all, Volcker served 18 months under Carter and about 6 1/2 years under Reagan.

“(Carter) had some reason to understand the direction I thought monetary policy ought to go in,” Volcker said of his tough anti-inflation measures.

Asked whether he discussed monetary policy with Reagan, Volcker said, “It came up on occasion.”

The anti-inflation measures were inherited by Reagan, whose relations with Volcker were not close, and helped bring about the steep recession of 1981-82. The Reagan Administration often publicly criticized the politically independent central bank’s policy as being too severe.

But despite that, Volcker was thought too essential to the U.S. and world economies, and Reagan reappointed him to a second four-year term in mid-1983.

Volcker also gave some clues to his own future. He said he will serve as volunteer chairman of a nonprofit commission designed to strengthen the public service. The commission will study how to attract able people to government service, and how to motivate and educate them.

Noting that many young people today are more concerned with making a fortune, Volcker said: “It’s harder to get them to come and its harder to get them to stay.”