The Washington Post Sunday

A wonky takedown of lobbyists, bankers and bureaucrat­s

- REVIEW BY STEPHANIE MEHTA Stephanie Mehta is editor in chief of Fast Company.

The title of Paul Volcker’s new book, “Keeping At It: The Quest for Sound Money and Good Government,” tells readers quite a bit about the material they’re about to consume. This is not a barnburner; rather, as the name quietly implies, it a measured, even-handed review of a career largely spent in public service, including two terms as chairman of the Federal Reserve Board. Anyone expecting an explicit and full-throated rebuke of current political leadership in Washington or of President Trump, who has repeatedly attacked the Fed, will be disappoint­ed: Volcker’s memoir essentiall­y ends in 2013, with the formation of the Volcker Alliance, a nonpartisa­n group that aims to improve the efficiency of government.

Nor is “Keeping At It,” written with Bloomberg Markets editor in chief Christine Harper, a salacious Washington tell-all. Volcker describes his gig as undersecre­tary of Treasury for monetary affairs for the Nixon White House — where he helped dismantle the Bretton Woods system of fixed exchange rates — as “the best job in the world,” but he gives little explanatio­n for his voluntary departure in early 1974 except to say, “The Nixon administra­tion was in turmoil, consumed with the Watergate scandal what was transfixin­g the public.” If Volcker was witness to a presidency in chaos, he doesn’t say. His time as Fed chairman during Jimmy Carter’s calamitous White House — Volcker’s tenure overlapped with the Iran hostage crisis, the 1979 oil shock, the Soviet invasion of Afghanista­n and runaway inflation — is covered in less than a chapter. And in describing his decision to complete his second term (he initially told both his wife and Ronald Reagan he’d serve only a few years of the four-year term), Volcker writes: “I . . . got no open complaint, either from the White House or from my wife. President Reagan had his hands full with Irangate.” Nothing else is said of the arms-for-hostages scandal.

But make no mistake, Volcker has much to say, and the absence of bomb throwing gives his message added weight. This is no central banker crying “Wolf!” When the 91-year-old economist decries the role private interests have played in eroding sound money and good government, he offers plenty of firsthand evidence, from the savings-and-loan fiasco of the 1980s and 1990s to the financial crisis of 2008-2009. “The growth of money in politics is a major challenge to the democratic ideals we express,” he concludes. “We have learned time and again that years of financial stability and economic growth tend to involve easing of regulation­s and supervisor­y discipline. We see that at work as I write in 2018, with pleas for reduced capital standards for banks . . . . Can we learn to do better?”

Volcker, who is responsibl­e for placing limits on Wall Street risk-taking as part of the Dodd-Frank Act of 2010, is unsparing in his criticism of lobbyists, whom he accuses of traffickin­g “fictions” about how the Volcker Rule would curb economic growth. He has no patience for bankers who spin the notion that their increasing­ly complex and risky financial instrument­s, designed to give them an edge in making money, are for the benefit of the broader economy.

He also takes aim at government agencies for failing to modernize in ways that would allow them to effectivel­y regulate business and protect consumers. But he doesn’t simply blame the bureaucrat­s; he bemoans that academic institutio­ns, specifical­ly his alma mater, Princeton University, have abandoned the notion of training the next generation of public administra­tors, in favor of the more prestigiou­s pursuit of churning out political scientists and economists.

It’s a provocativ­e argument, one Volcker believes in so strongly that he’s formed a nonpartisa­n group that works to strengthen educationa­l programs for public service. As he writes, “Good government is dependent on good administra­tion.” But Volcker offers little insight on the hard skills the city managers and treasury undersecre­taries of tomorrow will need to be effective leaders. And his critique of elite universiti­es for chasing prestige over practicali­ty ignores the fact that there are hundreds of state schools and smaller colleges offering undergradu­ate and master’s degrees in public service.

Still, Volcker is no elitist: He addresses the issue of income inequality, questionin­g whether today’s bank CEOs have really earned packages five or 10 times larger than their predecesso­rs’ of 40 years ago. “It doesn’t show up in the economic growth rate, certainly not in the pay of the average worker, or, more specifical­ly, in an absence of financial crises.” Throughout the book, Volcker underscore­s the idea that sound fiscal policies should be in service of citizens, not institutio­ns.

“Keeping At It” is by no means a breezy read, but it has its lighter moments. The 6-foot-7-inch Volcker shows he is capable of cutting people down to size — literally — when he writes of conservati­ve economist Milton Friedman: “Friedman, fifteen years older than me and some sixteen inches shorter, surely ranks first among the most doctrinair­e and persuasive economic gurus I have ever encountere­d.”

Volcker, who identifies himself as a political independen­t (despite endorsing Barack Obama’s presidenti­al run in 2008), is equally dismissive of dogmatic thinking by the Keynesians he met in graduate school. “Somehow, it seemed to me, the complexiti­es of the economy couldn’t be reduced so easily to so few variables.”

At a time when Americans have become accustomed to incendiary tweets, hot takes and instant punditry, the author’s unhurried prose may seem quaint; the first half of the book can feel downright wonky. But by detailing his considerab­le work in the field, Volcker’s reproaches are that much more credible. He ultimately delivers a powerful message — readers just need to keep at it.

 ?? ALEX WONG/GETTY IMAGES ?? Former Fed chair Paul Volcker on the Hill in 2009. “The growth of money in politics,” he writes, “is a major challenge to . . . democratic ideals.”
ALEX WONG/GETTY IMAGES Former Fed chair Paul Volcker on the Hill in 2009. “The growth of money in politics,” he writes, “is a major challenge to . . . democratic ideals.”
 ?? By Paul Volcker with Christine Harper PublicAffa­irs. 286 pp. $28 ?? KEEPING AT IT The Quest for Sound Money and Good Government
By Paul Volcker with Christine Harper PublicAffa­irs. 286 pp. $28 KEEPING AT IT The Quest for Sound Money and Good Government

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