Wikinvest Wire

Paul Volcker - frugal to a fault

Monday, December 08, 2008

There's a nice article about former Fed chairman Paul Volcker in today's LA Times with a good deal of background information that helps to explain why he is the way he is.

Volcker grew up during the Depression, raised by a father who taught him one lesson above everything else: Integrity is a person's greatest asset, said Volcker's sister, Virginia Streitfeld. She calls Volcker, who stands 6-foot-7, her "little brother."

He is known for practicing what he preaches about the nation living within its means. He travels with one business suit and lives in the same Manhattan apartment that he bought decades ago.

When he was Fed chief, he lived in a modest Maryland apartment and did his laundry on Saturdays at his daughter's house nearby, recalled Marina v.N.Whitman, a University of Michigan economist who has known Volcker for decades.

"Paul is one of the most frugal guys on Earth," Whitman said. "The advice he gives and the way he views the world are entirely consistent with his personal ethics and lifestyle."

He is outraged by executive compensation packages, seeing them as part of a larger breakdown on Wall Street.

"Paul can't imagine anybody wanting or needing that much compensation for consumption purposes," said Whitman, a member of the Group of Thirty. "It probably offends his sense of right and proper."
He'll have his hands full in helping to get the U.S. economy back onto a more solid footing - there's a lot that needs to be "undone" since he passed the Fed chief baton to Alan Greenspan back in 1987.


Anthony J. Alfidi said...

Tim, do you think the new administration is merely using Volcker's reputation as a cover for the continuation of fiscal and monetary imprudence? Mr. Volcker will be very upset if he discovers he is the public face of a hidden agenda (much like Colin Powell's reaction to the necons).

Tim said...

I don't know. I don't think even he has understands how "intractable" the situation is, a word that he's used quite often when commenting from afar. Now that he's up close he may with that he wasn't.

little larry sellers said...

From what I've seen, Volcker is a principled guy. We'll know if Volcker's presence is meant as a cover if he resigns in protest after working with the Obama team for a while.

But honestly, I don't think it matters much. The situation is far worse than it was in 1979 and this time around Paul isn't wielding any real power.

Stephen Lins said...

I remember reading these stories about his frugality back when he was Fed chairman. Too bad the rest of the country ignored his example.

Fran├žois said...

Thank you for the information which is effectively pretty useful.

Alas may I say that I second the opinion of Volcker as some kind of cover.

I just do not buy into running both a Volker-ian policy and a massive stimulus package. It just does not add up.

Anonymous said...

did his laundry on Saturdays at his daughter's house nearby

Great, a free rider.

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