Paul Volcker—the legendary Federal Reserve chair—died early this month on December 8. Volcker fought to restore discipline to monetary policy after the easy money binge of the 70s and the resulting economic stagflation. Left-wing policies led to out-of-control inflation. Volcker made the tough choices—tightening money supply and killing inflation.
This came at the cost of deep economic pain, but Ronald Reagan did not pressure Volcker, focusing instead on tax cuts, persuading the nation to give the policy a chance to work.
Despite the constant economic and political pressure to turn the morphine drip back on, Volcker stayed the course—and annual inflation went from 15 percent all the way down to under 3 percent.
The lesson today is that easy money is not the answer to a flagging economy. Conservatives should take the lesson of Paul Volcker and stick with our principles.
Even when it’s tough.