Paul Volcker

“That year, the lead in fighting inflation moved from the White House to the Federal Reserve System. Paul Volcker, whom Carter appointed chairman of the Fed, made stopping inflation his main goal, even if it took inducing a recession to achieve it.” p.329

This is similar in many regards to what is going on currently with Mr. Bernanke. He is putting these measures into place that will seemingly make things worse before they get better. Paul Volcker is important because he is the person behind the policies that were aimed at restricting the money supply (with intentions on lowering inflation). It is a major underlying reason why interest rates skyrocketed leading in turn to the decline in consumer spending. Volcker’s policies along with other contributing factors led to a huge amount of layoffs and plant closings in the automobile and steel industries.