Remembering Paul A. Volcker




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Remembering Paul A. Volcker

“Giant of public service” and multi-time Salzburg Global Fellow died in December, aged 92 Paul A. Volcker at Schloss Leopoldskron in 2013. Photo: Thomas Seifert

Paul A. Volcker, former chairman of the US Federal Reserve died on December 8, 2019. He was 92.

A multi-time Salzburg Global Fellow since 2002 when he attended The Euro: Implications for Europe, Implications for the World, the economist last visited Schloss Leopoldskron in 2013 in an early step of what he called a “new journey”: the launch of his legacy-defining Volcker Alliance, founded that same year.

Through the establishment of the institute, the long-serving public servant sought to reaffirm the six-word aphorism of Thomas Edison: “Vision without execution is hallucination.”

Volcker did not lack vision nor execution. In an obituary in the New York Times, Volcker was noted as having “helped shape American economic policy for decades.” US President Jimmy Carter, who appointed Volcker as chairman of the Board of Governors of the Federal Reserve System in 1979, said Volcker’s “economic acumen made him a giant of public service”. President Barack Obama, who appointed Volcker to serve Chair of the President’s Economic Recovery Advisory Board amidst the 2007-08 financial crisis, added: “I’ll remember Paul for his consummate wisdom, untethered honesty, and a level of dignity that matched his towering stature.” Fellow Salzburg Global Fellow and current chair of the US Federal Reserve, Jerome Powell said: “His contributions to the nation left a lasting legacy.”

Outside of the worlds of finance, banking and the economy where he held many leadership roles, Volcker also headed the Independent Committee of Eminent Persons, formed by Swiss and Jewish organizations to investigate deposit accounts and other assets in Swiss banks of victims of Nazi persecution and to arrange for their disposition. President Bill Clinton highlighted this work in his tribute: “We should all be grateful for the legacy he left as Chairman of the Federal Reserve, his work with President Obama to avert depression, and his leadership in obtaining overdue financial justice for the families of Holocaust victims.”

The Volcker Alliance, led since 2016 by Salzburg Global Fellow Thomas W. Ross, stated in a tribute: “The Volcker Alliance mourns the loss of our founder, Paul A. Volcker. He has entrusted us to carry forth his legacy through our work of the Volcker Alliance and we will do our best to carry out his vision.”

In memory of his nearly two-decade-long association with Salzburg Global and his almost 60-year-long career as a tireless public servant, below we share his last interview he gave to Salzburg Global in 2013 when chairing the program, Restoring the Public’s Trust: Delivering on Public Policy Goals.

Paul Volcker: “It’s a Crisis of Governance at This Point”

Chairman of The Volcker Alliance looks back on four-day session

Sitting on the Schloss Leopoldskron’s sun-drenched terrace, Paul Volcker, Chairman of The Volcker Alliance, is left feeling encouraged after leading a three-day session on Restoring the Public’s Trust: Delivering on Public Policy Goals.

“We’re starting out on a new journey with this little institute,” says Volcker. “We had a lot of people who I think are happy to be here and felt they learned something from each other, and we learned something from them.”

Those invited to the session included politicians, senior public servants, researchers, academics, and corporate and public sector representatives. The group’s aim was to consider new ways of thinking to improve effectiveness in public policy execution. The Volcker Alliance was keen to hear what part it could play, alongside other organizations.

Volcker says, “Once a goal is decided, it doesn’t mean much unless you’ve got ways of implementing the goal.”

The Alliance’s mission is to focus on the need for governments to run effectively and efficiently. This in turn might help to rebuild public confidence and trust, something which Volcker suggests is not as strong as once was.

“One of the contributing factors is – and I’m not saying it’s the major contributing factor – but a contributing factor is the perception that government has failed to deal with certain circumstances and crises effectively.

“I think it’s a crisis of governance at this point. But when does a crisis of governance become a crisis of democracy? If people lose faith in the democratic process, we’re all in trouble.”

The session on Restoring the Public’s Trust: Delivering on Public Policy Goals was convened in conjunction with Salzburg Global Seminar. Opening the program, Volcker said: “We see our role as a catalyst, able to bring to bear new and existing resources, to help generate new analysis and new research with the help of today’s technology, and to sponsor cooperative programs - all to facilitate, in Edison’s word, ‘execution’ of public policies.

“To be a bit dramatic, I think of this [session] as a call to arms. It is a rare opportunity to exchange views, to learn from each other in the United States and elsewhere, to assess priorities, to gauge the extent of our common interests, and maybe in some instances to work as partners.”

It’s the fourth time Volcker has visited the palace, having more recently chaired a discussion on Financial Regulation: Bridging Global Differences at Salzburg Global in August 2012. Is it fair to argue he likes the location?

“Do I like Salzburg? Salzburg is a terrific place. Look at the beautiful garden, the facilities are wonderful, the view is better, [and] the intellectual stimulation is first-class.”

Participants spent their second day in Salzburg considering some of the major challenges facing governments around the world, hearing from speakers such as Angel Gurría, Secretary-General at the Organisation for Economic Co-Operation and Development (OECD), political scientist Francis Fukuyama, Sir Michael Barber, founder of the British Prime Minister’s Delivery Unit, and Susan L. Marquis, vice president of Emerging Policy Research and Methods for the RAND Corporation.

After splitting into smaller working groups, participants stepped forward the following day to propose specific areas The Volcker Alliance, and similar organizations, could step into and address.

Complexities and problems raised in discussions began to be represented as new opportunities. But Volcker reveals they needed to be tackled in a way that “takes account of the resources that we have, the understanding that we have, the education that we need so that it makes some contribution toward some sense of trust and confidence in government.”

Volcker recognizes there is no “magic solution” and remedying these problems will take time, but that’s no reason to be pessimistic. “We haven’t got the candle quite lit yet; we’ve got the match approaching the candle to light it. This is part of the match.”

Paul A. Volcker was a Fellow of Salzburg Global Seminar, attending The Euro: Implications for Europe, Implications for the World in 2002, and chairing the programs, Sovereign Wealth Funds: Risks and Opportunities for Global Financial Markets (2008), Financial Regulation: Bridging Global Differences (2012) and Restoring the Public's Trust: Delivering on Public Policy Goals (2013).