America’s Inflation Antihero Gets a Makeover

Mr. Hughes argued in his essay published last fall that modern policymakers could learn from Mr. Burns’s cross-government collaboration. Raising taxes, revising zoning rules, and other frequent Democratic priorities could help temper price increases, he thinks.

Other suggestions for government intervention to tame price increases have gone even further: Isabella Weber, an economist at the University of Massachusetts Amherst, has suggested that price and wage controls should be reconsidered. Their design and implementation in the 1970s did not work, but that does not mean they never could.

But such interventions — even if successful, which is far from assured — would take time. The way today’s central bankers understand Mr. Burns as disaster and Mr. Volcker as savior could matter more immediately.

And while Peter Conti-Brown, a Fed historian at Wharton and Mr. Hughes’s thesis adviser, said he thought Mr. Burns deserved most of the blame he received for failing to control inflation, he also thought it was possible that Mr. Volcker had been improperly lionized.

To foster both maximum employment and stable inflation — the Fed’s twin jobs — is a balancing act, and to do it requires acting like neither Mr. Volcker, with his firm concentration on inflation, nor Mr. Burns, with his yielding one, he said.

“I think in the history of central banking, there are few if any heroes,” Mr. Conti-Brown said. “There are also few if any villains.”

Article source: https://www.nytimes.com/2023/04/21/business/economy/arthur-burns-inflation-paul-volcker.html