Read Volker's interview first then read Kahn's. Be sure to plow all the way through Kahn's interview. He talks about a lunch he had with Volker during the bad times. Fascinating.
I don't idolize Paul Volker. In a way I feel kinda sorry for him. I think history has given him a bum rap. He was a guy who circumstances forced into a very bad situation. I'm sure he didn't enjoy wrecking careers and families and forcing people into bankruptcy. But he inherited a mess and he did what he had to do. As he told Kahn at lunch: "Only I have a weapon to use in this town and one of these days I am going to have to use it." The only point I am trying to make using Volker as an example is: if you have to cut meat, find yourself a butcher. Get the guy for the job.
I think the Kahn story is even more fascinating. He was Chairman of the Council on Wage and Price Stability. Remember that? His observations on the nature and effect of inflation are well worth the read. He makes some great points. I think he is right on about the psychological effects of inflation. Once you get inflation psychology moving in the country its damned hard to reverse. You need to get yourself a butcher. Greenspan knows all this. He lived through it, too. And, he is determined to not let it happen again in his lifetime. Shoulda acted sooner than he did though, IMO. Psychological cat may be out of the bag now.
I'm reading, with my 2d glass of wine. Anyway, first thing I notice is I was wrong about his time frame. He took over in 1979, right at the end of Jimmy Carter's presidency. Of course he was on the Fed during Carter's dreadful economic years, but didn't become chairman until late.
Here's one excerpt: QUESTION: Why did they say inflation is the cruelest tax?
PAUL VOLCKER: Inflation is thought of as a cruel, and maybe the cruelest, tax because it hits in a many-sectored way, in an unplanned way, and it hits the people on a fixed income hardest. And there's quite a lot of evidence, contrary to some earlier thinking, that it hits poorer people more than richer people, who have more maneuverability, more way to protect themselves - who own their houses, for instance.
I know that Greenspan feels the same way; hates inflation. I remember a 60 minutes program during that time saying that it was common practice to "buy now", cause it'll cost more tomorrow. Kind of like Kahn.
His reply on throwing people out of work is insightful. His policies got them unemployed, only sooner.
Kahn's interview indicates that Volcker took action in spite of the fact that it would annoy Democratic voters He knew that unemployment would ensue. I like that. Not the unemployment, but he appears to be a man of principle.
Well, back to the wine and the reading. But I better read it again tomorrow, with coffee.
And thanks for the insight.