In This Review

Paul Volcker: The Making of a Financial Legend
Paul Volcker: The Making of a Financial Legend
By Joseph B. Treaster
Wiley, 2004, 244 pp

Paul Volcker has become an American icon-if not in every bar, at least in the worlds of politics, business, and finance. This short, readable biography covers not only his public life at the U.S. Treasury and the Federal Reserve Bank of New York and as chairman of the Federal Reserve System's Board of Governors, but also his little-known childhood and family life. One of the dramatic public events covered is the "Nixon shock" of 1971, when the United States dropped its commitment to convert dollars into gold on request by foreign central banks and negotiated a devaluation of the dollar. (Volcker was the key deputy to Treasury Secretary John Connolly.) Another is the switch, soon after President Jimmy Carter's appointment of Volcker as chairman of the Federal Reserve in 1979, to a stiff anti-inflation policy, which provoked mixed reactions during the painful period of disinflation but earned Volcker lasting respect after it was over. In addition to providing a flattering portrait of a dedicated public servant, Treaster offers an informative, nontechnical glimpse at how the Federal Reserve works.