Paul Volcker: The Making of a Financial Legend [Paperback]

Joseph B. Treaster (Author)

Book Description

Publication Date: September 5, 2005

As the Chairman of the Federal Reserve from 1979 to 1982, Paul Volcker established himself as one of the most influential economic thinkers. Currently a major advocate for corporate governance and accounting reforms, Volcker’s reputation as a great business leader with uncompromising ethics continues to this day. Written by award-winning New York Times journalist Joseph Treaster, Paul Volcker: The Making of a Financial Legend takes readers through the most compelling moments of this legend’s life in private and public service. From his early days as a young Treasury Department official through his appointments to the New York Federal Reserve Bank, the Federal Reserve, and James D. Wolfensohn, Inc., this inspiring book captures the significant moments in Volcker life and explores the ethical, economic, and moral dilemmas he faced at every turn.

Editorial Reviews

Review

" This new biography of Paul Volcker... . Adds colour and personality to a figure who often came across to the general public as a ' cold and arrogant numbers cruncher.' " ("CFO Europe, July 2004)

It may be hard to remember that the chairman of the Federal Reserve Board can be reviled as well as revered. But witness the tenure of Paul Volcker, Alan Greenspan's predecessor, whose tough economic policies halted the runaway inflation that staggered the American economy in the late 1970's and early 80's. Even so, Volcker's engineering of ever higher interest rates cost millions of Americans their jobs. (Embittered Democrats would include President Jimmy Carter among the victims.) In ''Paul Volcker: The Making of a Financial Legend, '' Joseph B. Treaster, a financial reporter for The New York Times, has written something of a mash note to the retired Fed chairman, a slim biography that lauds Volcker's steadfastness in applying the economic shock therapy that laid the groundwork for the boom years in the 1990's. Treaster offers little in the way of new policy history; William Greider's ''Secrets of the Temple'' (1988) provides a much more comprehensive and skeptical account of Volcker's tenure at the Fed. Where Treaster does break ground is in his personal portrait. Volcker could appear insensitive in public, but Treaster enters into his family life as well; particularly touching is Volcker's relationship with his son, who has cerebral palsy.Treaster's depiction of Volcker's honesty and resilience highlights some attributes that American policy makers should keep in mind as the Greenspan era draws to a close. ALEXANDRA STARR ("New York Times Book Review, May23, 2004)

From the Inside Flap

Paul Volcker is a living legend of finance. He has established himself as one of the world’s most influential economic thinkers and is regarded as both a figure of integrity and an instinctive leader who–throughout his career–has invariably done what he has thought was right, regardless of the consequences. Volcker is that rare financial titan who never sought to amass great personal wealth. Throughout his career, it is evident that he had no greater goal than doing the best job he could in the public interest, leading organizations from both the public and private sector to seek out his advice when crises of confidence arose.

Written by award-winning New York Times journalist Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend takes you through the most compelling moments of Volcker’s fifty years in finance and public service–documenting his days as one of the most powerful voices in America as chairman of the Federal Reserve, as well as his more recent endeavors, including a mission to revive the Arthur Andersen accounting firm and efforts to recover billions in lost savings of Holocaust victims from Swiss banks.

From public politics to private business, this masterful book examines the ethical, economic, and moral dilemmas Volcker faced at every turn. Compelling moments captured within these pages include Volcker’s:

• Early days as a young Treasury Department official during the Nixon years and his leading role as Treasury Department undersecretary in ending the Bretton Woods system
• Appointment as president of the New York Federal Reserve Bank
• Tenure as chairman of the Federal Reserve from 1979 to 1987–through the Carter and Reagan administrations
• Role as chairman of the investment firm James D. Wolfensohn, Inc.
• Campaigns for change in corporate governance and accounting

Weaving together anecdotes and analysis in an action-oriented narrative, Paul Volcker: The Making of a Financial Legend is an engaging account of how one man achieved results that ultimately improved the lives of millions of Americans and continues to influence the worlds of business and finance. --This text refers to the Hardcover edition.

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Product Details

• Paperback: 244 pages
• Publisher: Wiley (September 5, 2005)
• Language: English
• ISBN-10: 0471735868
• ISBN-13: 978-0471735861
• Product Dimensions: 6 x 0.6 x 9 inches
• Shipping Weight: 15.5 ounces (View shipping rates and policies)
• Average Customer Review: 4.8 out of 5 stars  See all reviews (10 customer reviews)
• Amazon Best Sellers Rank: #535,261 in Books (See Top 100 in Books)

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12 of 13 people found the following review helpful:

5.0 out of 5 stars Paul Volcker: An Honorable Man, August 4, 2004

By 

J. Horwitz (New York, NY) - See all my reviews
(REAL NAME)   

This review is from: Paul Volcker: The Making of a Financial Legend (Hardcover)

No need to be a bellowing bond trader nor an obsessive and fetishistic day trader taking your market temperature by the minute to appreciate NY Times journalist Joseph B. Treaster's most readable biography, Paul Volcker: The Making of a Financial Legend.

In our age of cooked corporate books and perp-walking CEOs, Treaster shines an admiring and well-deserved light on the former chairman of the Federal Reserve, a man of towering financial and personal integrity. Words like honor, integrity, truth, steadfastness are thrown around like confetti these days in the political and financial world, but as Fed Chairman from 1979 to 1987, Paul Volcker's strong will and good sense were perhaps the major factors in the survival of the nation's economy through the inflationary tsunami of the Carter years and the financial wrecking ball of Reagonomics.

Standing 6'7", physically ungainly and socially reserved and stand-offish, Volcker had a commanding intellect when it came to bigtime economic and financial matters. Born to public service (his father was longtime town manager of Teaneck, NJ), Volcker attended Princeton, Harvard's Littauer School of Public Administration (it eventually became the JFK School of Government) and the London School of Economics. He was a special assistant to David Rockefeller at Chase Bank, served as an undersecretary in Nixon's Treasury Department, ran the New York Bank of the Federal Reserve and became fed chairman in July 1979 while inflation was rocketing and Pres. Carter was bemoaning the national "malaise".

Chairman Volcker was the man with the plan. He turned old economic theory upside down with his idea to drastically cut the money supply as the country's economy sweated and shuddered through the debilitating national fits of inflation and recession. Politicians and businessmen, fearful and shortsighted as usual, whined and squealed that Volcker was Dr Kevorkian or Dr. Demento, putting a noose around the national economic neck. In fact, as history has shown and Treaster explains so even the ordinary Joe can understand, Volcker had applied the ideal tourniquet to stop the bleeding and the poison. The patient lived and by the mid-90s, the country was economically healthy and prospering as never before.

Of course, like the Lone Ranger, Volcker had ridden off into the sunset by that time. Waved good-bye (and good riddance) by Reagan's Treasury Secretary and the GOP's most artful backroom Machievelli, James A. Baker III in 1987, Volcker turned his enormous economic and monetary talents to the private sector. But this principled and unpretentious public servant with his "unshakeable integrity" was not happy in this work.
These days, as the political swamp gases are once again rising and spreading their bad odor, Volcker, even at the age of 76, is being called on once again to perform his public duty.

In recent years, Volcker has admirably and successfully refereed the "battle royal" between the Holocaust survivors and the Swiss banks with their appalling Nazi connections. When Enron, the King Kong of corporate fraud sunk in its own muck, "Mr Incorruptible" Volcker took the job of chairman of an independent oversight board to try to salvage some shred of integrity for the accounting community, which had been badly tainted by Arthur Anderson, the giant accounting firm that was the handmaiden to Enron's tangled scams and schemes. And at this moment, Volcker is heading up the international investigation of the massive corruption between Saddam Hussein, various corporate greedheads and UN officials in the administration of the decade-long Oil For Food program in Iraq.

After reading this worthy biography of Paul Volcker, one can only hope they did not break the mold when they made this honorable man.

6 of 7 people found the following review helpful:

5.0 out of 5 stars Lessons to learn..., May 23, 2004

By 

Steve (Illinois) - See all my reviews

This review is from: Paul Volcker: The Making of a Financial Legend (Hardcover)

This cleverly-constructed biography not only reminds us of Paul Volcker's tough-minded role in taming inflation in the perilous economy of the '80s into the '90s, but it provide potent insights into his personal life--elements that laid the foundation for the clear thinking, determination and honesty that the American economy still benefits from today.

Volcker's city manager/father passed to his son a belief in the worthiness of public service and the need for absolute integrity and perception of integrity. Volcker's public service meant sacrifice for him and his family.

This is not a thick volume (244 pages), but it leaves the reader very satisified that he or she has a clear understanding of what drives Volcker, of the politics that brought him to office and then challenged him, of who he is today. It's no wonder the United Nations has turned to him to help investigate its oil-for-food program in pre-war Iraq.

The fact that so many "heavyweights" (people like David Rockefeller, Marshall Loeb, Bill Bradley, Ed Koch, etc.) were willing to write pre-publication blurbs that spill off the dustcover into the book itself, and that Arthur Levitt wrote the foreword, reflects the respect they have not just for Volcker but for author Joseph Treaster, a business writer for The New York Times.

This book is very readable, well-sourced and documented, and has some delicious photos. As the nation faces the prospect of renewed inflation today, our leaders would do well to read this book and learn its lessons. So would our nation's citizens.

2 of 2 people found the following review helpful:

5.0 out of 5 stars The Wisdom and Brilliance of Paul Volcker, Still at Hand, May 9, 2004

By 

Thomas C. Hayes (Ossining, NY, United States) - See all my reviews

This review is from: Paul Volcker: The Making of a Financial Legend (Hardcover)

This is an inspirational book. Joseph Treaster's accomplishment is masterful, timely and urgent.

On one level, he presents in disarmingly clear prose compelling new insight and perspective for those who know the tale well along with the essential facts, context, and players from Washington to Wall Street you expect in a first-rate political biography. On another -- and this is the book's true, unexpected gift -- he reconstructs the forging of Volcker's remarkable, civic-minded character. Here are reasons and clues behind the Volcker's commitment to a long career in international economic policy and bank regulation despite considerable personal and family sacrifice until late in life. The source material? Rare interviews with family members, close friends as well as the intensely private, immensely gifted Volcker himself. Treaster devotes one-third of the book to the making of Volcker's character.

Paul Volcker's role in framing monetary policies to crush the inflation of the '70s, then prevailing shrewdly against powerful enemies in both political parties -- in the White House and Congress -- to enable these policies to work, was heroic. I followed it closely as a newly arrived New York Times business reporter in 1979. Occasionally, such as the peaking of the prime rate at 21-1/2% in December 1981, I was assigned to write directly about the impact. Like millions of Americans, mmembers of my own family paid a price, short-term and long-term, for Volcker's convicton. With mortage rates climbing above 16% in the early '80s, my father was unable to market a new condominium project in the Middle West; the condo my wife and I owned in Westchester County stood unsold and vacant for a year after our transfer to the West Coast. My father was furious with Volcker, wary of more financial pain that indeed lay ahead. I was more temperate, aware of Volcker's logic, sensing a steadfast hero in the making (even as my meager savings were depleted), and anticipating economic revival that soon was manifest. Absent the accomplishments of Paul Volcker preceding him, Alan Greenspan never would have had the good fortune to guide the booming economy in the '90s. Treaster makes the case.

Volcker's frugal, stern father was town manager of Teaneck, New Jersey, for 20 years, 1930-1950. During that period, Teaneck became known as a model of small-town America in large part because Paul Volcker Sr. worked to create, sustain and protect the vision and the public policies required to achieve it. His principled practice of standing firm against the narrow interests of town politicians made an impact on Paul Jr. The unemotional, fact-based detachment with which his father engaged his adversaries in public forums played well on Capitol Hill a generation later.

Volcker's legacy at the Fed, his pivotal leadership in brokering the $1.25 billion payment by Swiss banks to Holocaust victims, and his ultimately futile effort to save the Arthur Andersen accountancy from its ethical blunders at Enron are all of a piece. In his gem of a foreward, Arthur Levitt sums it this way: Volcker "has always stood for what he believed was right, regardless of the political consequences."

Leaders in all walks of life -- business, government, non-profit, military, academia, volunteer, and more -- possibly will see parts of themselves reflected in these pages. Courage, commitment, competence and communication are requirements for effective leaders in any situation. Certainly, in Treaster's "Paul Volcker", most readers will recognize and admire an extraordinarly high standard of leadership. Few in public life have exercised it so well and on such a large stage in the past 25 years.

Government leaders need to be reminded of this high standard today. The Chirman of the Federal Reserve is voicing frank warnings against massive federal budget deficits. Interest rates are rising. The moral authority of the U.S. is at risk globally. Remarkably, the wisdom and brilliance of Paul Volcker remains at hand. As The Times's Joe Treaster makes abundantly clear in this convincing work, world leaders should make the most of it.