An ingenious new Roosevelt Institute study on the influence of money on politics begins with an incredible story about how the world actually works:
In the spring of 1987, Paul Volcker’s second term as chair of the Federal Reserve was running out. Volcker had first been appointed by Jimmy Carter in 1979, and was willing to stay for another four years if President Reagan asked. While Volcker had used high interest rates to engineer a crushing recession at the start of Reagan’s first term, he then allowed the economy to expand rapidly just in time to carry Reagan to a landslide reelection in 1984.
Yet Reagan wanted to replace him. Why?
The study’s authors, Thomas Ferguson, Paul Jorgensen, and Jie Chen, report that they learned the answer from a participant in the key White House meeting on Volcker’s fate.