“We’re in a hell of a mess in every direction.”
Those were some of the last official words from Paul Volcker.
He died over the weekend. You may have heard.
To some, the man was a hero. He saved the nation from runaway interest rates.
To others, the man was the enemy. He got the nation addicted to Fed intervention and was an ex officio leader of the deep state.
But we don’t measure a man by his job. It’s not our thing.
We don’t condemn him because of the career he chose. And we certainly don’t toss stones at a body that’s yet to be buried.
So we mention the man today to study his words.
We’re in a hell of a mess, he believed.
And he’s right.
A Democracy in Doubt
“Respect for government. Respect for the Supreme Court, respect for our president, it’s all gone,” he said last year. “Even respect for the Federal Reserve.”
Gulp. We may be responsible for that last one… at least partially.
The former Fed chief continued, though.
“I don’t know how you can run a democracy when nobody believes in the leadership of the country.”
It’s a timely lesson. Trump’s in big trouble. The media is a mess. And the markets are eagerly awaiting the results of the Fed’s latest meeting – the press conference is at 2 p.m. today.
But there’s something a lot of folks don’t know about Mr. Volcker.
He ran something he dubbed the Volcker Alliance.
Its aim was simple. The group wanted to make government and its policies more effective – quite a lofty goal.
The group ties universities, businesses and government together… all aimed at making the government’s work actually work.
That’s why that last quote above is so interesting.
How do we run a democracy… when nobody believes in the democracy?
We’d like to think that if Volcker had another 92 years, he’d have answered his own question. But we reckon he was too close to the action to see it clearly.
After all, his dad was a town manager… a very hands-on town manager. His career propelled Volcker into politics at an early age. It’s what led him to Princeton, where he blasted his future employer for not smashing inflation earlier.
Then Volcker went to Harvard… where he studied “political economy.” We’re not sure what that means, but we certainly see how he and his fellow Washingtonians turned it into quite an art.
Volcker went on to work for Nixon… where he helped to blow up the gold standard.
He worked for Carter… although he was the president’s second choice.
He worked for Reagan… where he may be known as the last Fed chief to preside over rising interest rates.
So when Volcker asked how we run a democracy when nobody believes in the democracy, we raise our hand with an answer.
To us, the question seems to answer itself. Let the democracy run itself.
Do what the voters want… not what the politicians want.
America has come to a fork in her gilded road.
Lots of folks are rightfully wondering what comes next. Will we impeach every president from here on out? Will extremes become the norm? Have we reached our peak?
We know the answers.
The history books are clear.
If we continue to let the power hungry “run” the democracy, we’re in trouble.
But if we let the democracy run itself – and let the people flush the system clean every now and then – we’ll be just fine.
Our suggestion… Do yourself, the nation and your money a favor and read Paul Volcker’s last book, Keeping At It: The Quest for Sound Money and Good Government.
It’s critical Know-How.
Once you see things from the inside, you’ll never look at your money or the state of our democracy the same way.
And that’s a good thing.