Robert Messman

Background

About Robert Messman

Had 4 or 5 letters to the editor published in Barrons. Latest one used the St. Louis Fed Inflation graph to debunk the myth that Paul Volcker pioneered the way to fix inflation. Actually, Pres. Ford and his much maligned Fed Chair instituted the first DUAL MANDATE for the Fed, adding the focus on minimizing inflation while maintaining stable employment, and pioneered the inflation cure. There was great confusion and fear at the time and the typically ignorant press focused on the "Whip Inflation Now" slogan and ignored the brilliant and courageous monetary remedies of the Ford administration. Despite the mild recession Ford inherited, Ford/Burns cut inflation by an astounding 5% in two years-See the St Louis Fed graph-by tightening the money supply and driving up interest rates. It deepened the recession but just as the election passed and a stupid electorate voted in "loose money Carter," the economy emerged from recession beautifully. Carter's clueless Treasury Secretary Blumenthal said in Feb 1980 that he would "inflate the world out of this recession" despite the fact the recession was over. Carter replaced Burns with Paul Volcker a year before the 1980 election. Volcker did Carter's bidding by keeping the money supply growing rapidly, particularly after April of the election year to grease the election skids for Carter as inflation hit 12%. The day Reagan was elected, the money supply flatlined and it was only then that Volcker became a copycat inflation fighter with Reagan's blessing. What they learned from Ford/Burns policy was that a tight money policy could indeed drive down inflation over about a 2 year period. Ford had only 28 months in office so did not have time to reap the public's praise for their action and lost the election. Reagan knew that he had 4 years to ride out the storm. So the Reagan team repeated the Ford cure resulting in a recession that pummeled the Republicans in the mid-terms but were overwhelmingly re-elected in 1984 as inflation faded and the economy boomed. The St Louis Fed Inflation graph shows TWO almost identical and dramatic drops in inflation from 12% with the first being executed as an economic high-wire act by Ford/Burns. With an economically ignorant media, Ford's statesmanly administration gets no credit for it's brilliance. That was perhaps the last we have seen of statesmen until Zelinsky along with Liz Cheney and Adam Kinsinger have invaded our otherwise weasel- and incompetence-filled political sphere. Hope they become models for the voters.