- The Washington Times - Saturday, September 4, 2004

Our lives today are heavily influenced by officials who haven’t been elected by anybody — judges, scientists, regulators. And none of these unelected officials has a greater effect on the lives of Americans than does the chairman of the Federal Reserve, the country’s central bank.

Before there was Alan Greenspan at the Fed there was Paul Volcker, the subject of a new biography by Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend (Wiley, $27.95, 206 pages). Brought up in the suburban town of Teaneck, N.J., where his father was mayor for a time, Mr. Volcker learned to esteem public service even as he opted for a career in finance. Educated at Princeton, Harvard, and the London School of Economics, he divided his early years between positions with the Federal Reserve Bank of New York, the U.S. Treasury Department, and the Chase Manhattan Bank.

Mr. Volcker was president of the New York Federal Reserve Bank in 1979 when President Jimmy Carter appointed him chairman of the Federal Reserve. He was not Mr. Carter’s first choice; Mr. Carter had wanted David Rockefeller, but when Mr. Rockefeller turned him down, the president went with the Wall Street favorite, Mr. Volcker.

The country’s economy was in turmoil. Unemployment was high and inflation was rampant. Mr. Volcker made inflation his immediate target, regardless of the political or economic fallout.

In an interview, Mr. Volcker’s wife, Barbara, observed that her husband “is not confident about himself in some ways, but in his field he is more sure about himself than anybody I have ever known. It may sound egotistical, but I believe he thinks he is the only man in the country who can do the job.”

In October 1979, Mr. Volcker sold the Federal Reserve’s regional presidents on a dramatic increase of a full 1 percent in the discount rate, the rate that the Fed charges other banks for loans. It was the opening gun of his war on inflation, which between 1979 and 1983 would bring inflation down from 13 percent to 4 percent. In the mid-1980s, however, high unemployment and a stagnant economy obliged him to support an increase in the money supply.

The most interesting sections of Mr. Treaster’s book concern the pressure from the White House under both Mr. Carter and Ronald Reagan. Mr. Carter’s aides appear to have recognized the importance of Mr. Volcker’s war against inflation, but the Reagan administration was less appreciative. In a 1984 meeting that Mr. Volcker had with President Reagan and White House Chief of Staff James Baker, Mr. Baker bluntly told the chairman that the White House did not want any increase in interest rates that would hurt Reagan’s reelection chances.

In fact, Mr. Volcker lowered interest rates, but he insisted that White House pressure was not a factor. Probably it wasn’t. In David Rockefeller’s words, “Paul Volcker stands out as a financial leader of unusual competence, unquestionable diligence, and uncompromising integrity.” These qualities contributed to Mr. Volcker’s appointment as head of a commission representing Jewish groups and Swiss banks to deal with the unclaimed accounts of Holocaust victims.

The author’s task is not an easy one. Mr. Volcker is not a colorful personality, and his expertise is in an arcane, technical field. Seeking to accommodate the general reader, Mr. Treaster, a New York Times reporter, has kept it simple, even explaining that Mr. Volcker’s alma mater, Princeton, is “one of the finest universities in America.” This short book sheds little light on the private Paul Volcker, but tells the story of a dedicated public servant.

In 1999 Peter Hill, an art critic in Australia, ran into a fellow art critic at a conference on Tasmania. This man, like himself, had spent some time two decades earlier keeping the paraffin light in a lighthouse going, shortly before the task became completely automated. They compared notes: “How many keepers were on your lights? How long did you work without a break? What were the meals like? Did they move you from light to light? Were there many mad bastards?”

The two agreed that “someone needs to tell our story,” because “once we die that’s it. No one will know what it was like.”

In Stargazing: Memoirs of a Young Lighthouse Keeper (Canongate U.S., $24, 275 pages, illus.), Mr. Hill shows what it was like for him — a long-haired, poetry-reading, 19-year-old Glaswegian — to spend six months with crusty old salts on three different islands off the west coast of Scotland in 1974. Even if the references to BBC TV programs and to rock-music idols of the 1970s — not to mention the obsession with Vietnam — become wearying, the book overall is a thoughtful, captivating story of a life-changing experience.

The first day on the job, the author learned why the interviewer had asked him, “Now, Peter, what are you like as a cook?” In the isolation of the lighthouse, meals took on ritualistic significance, and all hands were expected to maintain a gourmet (baked Alaska) standard. He underwent a sink-or-swim course in cooking as in all aspects of service on the lighthouse.

He was thrown immediately into the routine — each of the three keepers took two 4-hour watches every 24 hours, and the watches rotated every day. He never found the time he had expected to write haiku and paint watercolors, but he did learn how to get along with some eccentric characters, how to play nautical Scrabble, how to shear sheep for a local farmer, how to row his way out of a sudden life-threatening gale, and how to tell stories to keep his colleagues awake at night so that they could turn on the light and start a new watch.

“All lighthouse keepers have their hobbies,” writes the author. “Some build miniature five-masted schooners in bottles. One I knew spent three years building a real motor boat in the vegetable shed behind the fog signal, while others carved mermaids from bits of driftwood, played hymns on the one-stringed fiddle, [or] became experts on the subject of the Dr. Who television series.” One veteran keeper was renowned for shedding his clothes upon arrival at the lighthouse and remaining naked throughout his tour of duty. (“It’s a frightening sight, especially if he’s frying sausages.”)

The author expresses his feelings upon reaching shore after his first two weeks in a lighthouse as akin to the sense of having spent two weeks “in space, in prison, in hospital, on a desert island, or in Vietnam.” At the end of the book he muses that lighthouse training could “turn raw young boys into — not men, but fully rounded human beings, however flawed. Two weeks would be enough to re-invent society.

“The good people of Thailand often spend a month or two as monks in a monastery before pedaling off on the cycle of life. In my wilder moments I imagined the lighthouses performing such a duty. Sadly, it was not to be … Ours was the first profession ever to be made totally redundant.”

This is an appealing book. Skip the parts that don’t resonate and relish the rest like a collection of lyrical short stories.

John M. and Priscilla S. Taylor are writers in McLean, Va.


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