Do any of the following statements sound familiar?
“I appreciate the opportunity to appear again before this committee in my still-new capacity.”
“I belabor the obvious when I say we face unpleasant economic circumstances, and that none of our choices is risk-free or pain-free.”
“Monetary policies can only be a part of the overall framework. But they are an essential part.”
“… it is hardly surprising that many citizens have begun to wonder whether it is realistic to anticipate a return to general price stability and have begun to change their behavior accordingly.”
“We have recently seen clear evidence of the pervasive influence of inflation and inflationary expectations on the orderly functioning of financial and commodity markets and on the value of the dollar internationally.”
“The U.S. economy has enjoyed a long and relatively strong economic recovery; more people are employed than ever before …”
“As the rate of increase in energy prices moderates — and it should, with responsible pricing behavior by producers in coming months — there is a reasonable prospect that the overall inflation rate will soon decline.”
“Economic activity abroad is being sustained; this should support the recent trend of substantial growth in U.S. exports and help to improve the overall U.S. current-account position.”
“… the recent actions by the Federal Reserve were designed to deal with the clear danger of a renewed outburst of destabilizing and inflationary speculative pressures …”
“… these actions are not intended to, and will not, cut off the supply of money and credit to the economy. Indeed, we are conscious of the fact that there are important areas of the economy — homebuilding, smaller businesses, and others — that are particularly dependent on a continuing flow of credit.”
“Finally, we should not rely on monetary policy alone, critical as disciplined monetary policy is, to solve our economic problems. We also need an effective energy policy, commanding the support of all segments of our society, that will put us more surely in control of our destiny …”
“… I was impressed again by the general understanding that rising real energy prices will require significant and painful economic adjustments and by the consensus on the need, under current circumstances, for virtually every country to attach high priority to the fight against inflation.”
Each of these statements was made by then-Federal Reserve chairman Paul A. Volcker to the Joint Economic Committee of the U.S. Congress on October 17, 1979.
Surely as things change, they stay the same.
– Thomas E. Nugent is executive vice president and chief investment officer of PlanMember Advisors, Inc., and principal of Victoria Capital Management, Inc.