Flashback: When Democrats opposed the Fed
This morning, I called the pressure that Republican congressional leaders are exerting on Federal Reserve Chairman Ben Bernanke “unusual.” But it’s certainly not unprecedented. Here, for instance, is a 1982 New York Times article reporting that Rep. Jim Wright, then the Majority Leader of the House, had called for Federal Reserve Chairman Paul Volcker to resign:
Representative Jim Wright, the House majority leader, a strong critic of current monetary policy, called today for the resignation of Paul A. Volcker as the Federal Reserve Board’s chairman.
‘’I would ask for Mr. Volcker’s resignation,’’ the Texas Democrat said at a breakfast meeting with reporters, in arguing for an easing of monetary policy that some economists contend could lower interest rates. Mr. Wright would not say who he would like to see as the board’s chairman or whether he wanted Mr. Volcker to resign from the board entirely or just from the chairman’s post.
Volcker didn’t resign and nor did he back off his policy of raising interest rates to crush inflation. He’s now remembered as one of the greatest Federal Reserve chairmen of all time.