Paul Volcker was a great man

The world as we know it has drastically changed in the past few years. The COVID-19 pandemic, a rare and unexpected black swan event, has brought about unprecedented challenges and has left an indelible mark on society. While trends can provide useful insights and information about the future, the pandemic has shown us the importance of recognizing the potential for black swan events and being prepared for the unexpected.

In this post, we will reflect on the past and learn from it, including the legacy of Paul Volcker, a towering figure in economics and finance. We will also pay tribute to the brave men and women who have risked their lives to keep us safe during these uncertain times. As we continue to grapple with the effects of the pandemic, it’s essential to remember those who have been affected and to acknowledge the sacrifices of those on the front lines. So join me as we delve into the past and present, and strive to find hope for the future amidst the chaos of this black swan event.

COVID Logo.jpeg

March 2020 ~ at the usual quarantined family dinner the other night, my daughter Elise asked me what it was like during the 9.11 crisis compared to COVID-19. We’ll get to that shortly.

Late December 2019 I read an article about Paul Volcker after his death. The article on Volcker was a chronology from 1979 to present and a summation of the five past presidents and economic times.  It got me thinking about writing something based on that article as it relates to my life and most of my Baby Boomer friends or Yuppies as we were known, amidst my own economic turbulent times and current. As I was finishing the last edit, COVID-19 hit. The author’s historical perspective on Volcker got me thinking about how our President is handling things, along with the Fed, the SBA, congress and the senate. And the current SBA loan program including the Payroll Protection Plan (PPP), Economic Injury Disaster Loans (EIDL), the Main Street Lending program (MMS) and a host of other solutions, all attempt to right the ship. So here is my perspective on the current situation and my thoughts for the last 40 years of my life and ending with other historical crisis situations. I’ve enjoyed countless conversations with my friends inserting their own chronological perspective since Volcker’s entry to the world stage in 1979.

I’ll spare any political observations. It’s not my place nor necessary to comment on how leaders are handling things. This post includes my observations, thoughts and research on past and current statistics such as unemployment, the stock market, the GDP, and inflation. Now we watch the new stat, the death and hospitalization curves and the “when we’ll return to normalcy.” ZOOM meetings, masks and gloves, and social distancing have been the new norm.

The most current, Phase seven ~ the current COVID-19 and Saudi-Russia oil fight. 

Global widespread virus, layoffs and shutdowns have been the new norm.  Donald Trump was our president, Jerome Powell remains Fed Chair and our Treasury Secretary Steven Mnuncin are all-navigating a plethora of government programs, both at the federal and state level. Stock gains in Trump’s reign have been totally wiped out just like the decrease in NASDAQ in 2002. While the immediate effects of our current health and economic situations are impacting our daily lives, we see an even larger impact happening from the enormous stimulus and bailout packages that are going through Federal and State legislatures. The CARES Act, EIDL, and the Main Street lending programs are now enacted and many business owners have received  funding, while others sit and wait on phase two of additional government approved funds.

I expect that certain industries anticipate new solutions that will become even more compelling as people may need to change work and daily life patterns. With the need for governments to spend on COVID-19, the tax dollars for newer disruptive projects are going to be questioned even more so.

For 2019, unemployment was 3.5%, the GDP was 2.3% and inflation was 2.3%. The unemployment rate continues to skyrocket and set daily records and the rate is expected to reach or even exceed 10%.


Before the pandemic hit, as of February 2020, The BLS household survey showed that the US unemployment rate fell 0.1 percentage points in February 2020 to 3.5%. The unemployment rate peaked in October 2009 at 10.0% and is now 6.5 percentage points lower. From a post peak low of 3.5% in September 2019, the unemployment rate has now risen by exponential historical highs.

And here is an interesting statistic. As of April 15, 2020

Other historical crisis situations

The Vietnam War and the Blizzard of 77

I was too young, other than I kind of knew about Vietnam and the only reason I list the blizzard of 77 is everything was shut down for a week including a driving ban.

1980 ~ U.S. presidents Jimmy Carter and Ronald Reagan reigned from August 1979 to August 1987 Paul Volcker was an American economist and was Chairman of the Federal Reserve.  Alan Greenspan took the reins a month before black Monday. We’ll get to that shortly. Upon Volcker’s reign, it was 1980 for me then while he was in charge. I finished college at the University of Buffalo. Interest rates on mortgages were 13.5%.  In 1981 I debated moving to Texas as things were booming there. We stayed in Buffalo, the interest rate on our first house was at 13.5% and unemployment was at 7.5%. I had three jobs during this phase and we had our first child in 1982. We bought our first house in 1985 and life was good. $33,000 was all we could afford at 13.5% interest rates.

1987 ~ Black Monday Ronald Regan was the President and Alan Greenspan took over as Fed Chair in September. The stock market crashed on October 19, 1987. There was a sudden and drastic unexpected stock market crash that struck the global financial market. The DOW fell 508 points (22.6%).  We got an 8% mortgage on our second home and I felt like we won the lottery.  Unemployment rates were at 5.7%, the GDP was 3.5%, and inflation was 4.4%. George H.W. Bush became president in January of 1989 after Regan’s eight years at the helm.

The real estate downturn in the 1990s ~ George H.W. Bush and Bill Clinton were presidents in this era and Alan Greenspan was Fed Chair from 1987 to 2007. The introduction of S & L’s and often-inexperienced lenders led to the collapse of the commercial real estate markets in the 1990’s. Empire of America and Goldome were great clients and both bit the dust. Unemployment skyrocketed and layoffs were everywhere. The good news is legislation led to the passage of the Financial Institutions Recovery, Reform and Enhancement Act (FIRREA) of 1989. That legislation, aimed at bailing out the S & L industry, established the Resolution Trust Corp, which provided efficient selling off the bad commercial mortgages from the likes of Empire and Goldome.  That was a huge boom for our temporary staffing division and we flourished with placing the likes of many laid off workers. In 1991, the unemployment rate was at 7.4%, GDP was -.01% and inflation was YOY for December was 3.1%. We were at war, The Bills made it to the Super Bowl and I witnessed Whitney Houston singing the national anthem in Tampa and Scott Norwood’s wide right. A few years later life was good and the economy was flourishing. Sir Timothy Berners Lee and his team of scientists brought the World Wide Web to the globe for free and it was a remarkable run until 9/11.

Five Presidents.jpeg

Five of the last six Presidents

9/11 ~ Tuesday September 11, 2001 ~ George W. Bush was the president; Alan Greenspan was still the Fed Chair.  Mortgage rates were 6.82% and unemployment was 4.9%, the GDP was 1.0% and inflation was 1.6%.  George W. threw a fastball at Yankee Stadium shortly after 9/11 on 10.30.01 , and America went back to war and stayed at work.

The 2001 dot-com bubble, or the dot-com boom ~ George W Bush was president Alan Greenspan was the Fed Chair. I was engaged in our staffing companies during this period where excessive speculation in Internet related companies sparked a period of massive growth. From 1995 to 2000, the NASDAQ rose 400% only to fall 78% from its peak by October 2002 washing out all its gain by 2002. Mortgage rates were 6.0%, the GDP was 1.7%, unemployment was 5.7%, and inflation was 2.4%.

2007-2008 subprime mortgage crisis ~ There were three presidents in this phase, George W. Bush, 2001 to 2009, Barack Obama from 2009 to 2017, and Donald Trump from 2017 to present. There were also three Fed Chairs, Ben Bernacke from 2006 to 2014, Janet Yellen took over as Fed Chair in 2014, nominated by Barack Obama, and in 2018 Jerome Powell nominated by Trump to be Fed Chair and confirmed by the senate on February 5, 2018. Mortgage rates peaked at 5.4% and unemployment rates peaked at 10% the GDP was -.01% and inflation was .01%. Many eager job seekers simply gave up looking for employment.  Needless to say, our temp business sustained and it was a rough few years finding people permanent jobs. The subprime mortgage crisis occurred between 2007 and 2010. Home prices declined after the collapse of the housing bubble spearheading mortgage delinquencies, foreclosures and devalued housing prices. Household spending declined and hiring freezes were ablaze. Tom and I took a two-week trip to Hong Kong and China exploring the possibility of an offshore IT programming entity. We all somehow survived the subprime dilemma.

Fed Chairs

Fed Chairs from 1979 to 2018: Janet Yellen, Alan Greenspan, Ben Bernanke and Paul Volcker

The Great Depression …began in September of 1929 on Black Tuesday worldwide was October 29,1929. My dad was one year old and my mom came two years later. We’ll get to her comments shortly. The depression lasted until the late 1930’s so mom will have a good perspective from her parents’ point of view. Herbert Hoover and Franklin D. Roosevelt were the two Presidents during this era of decline. Both my grandparents were crop farmers and farms and rural communities were especially hard hit with crop prices falling 60%.  The good news for my grandparents is they were primarily self-sufficient as they also raised egg laying chickens, dairy cattle, hogs and a fully efficient greenhouse.  Other than clothing, sugar and gas for the equipment, they fared ok and lived on the land.

Here’s a quote from my mother  “Joe  ………my  Mother told me a lot of other farmers in the area lost their farms………they were fortunate not to.   I asked how everything  was and she said  “not so bad as everyone was in ‘the same boat’, one had any money”.   That sounds like what we’re going through now.     The  loss of lives is a tragedy  here!        Love ya, Mom”

Worldwide GDP fell by an estimated 15% compared to just 1% during the 2008 – 2009 recession. The negative of the Great Depression lasted until the start of WWII. International trade fell by 50% while unemployment peaked at 23%.

Farm House

A hundred + years ago ~ The Spanish Flu

Or also known as the 1918 flu pandemic which wreaked its havoc from January 1918 to December 1920.  It infected 500 million people and estimates were never confirmed and deaths were estimated to be anywhere from 17 to 100 million lives putting its stamp on one of the deadliest pandemics of all time.

Amidst the Spanish Flu, World War 1 ended November 11, 2018 and Woodrow Wilson was our President. Neutral Spain’s King Alfonso XIII contracted the flu and that situation gave rise to the naming of the flu. In April of 1919, our president was stricken with the Spanish Flu while he was embroiled in Post World War 1 negotiations with the French Prime Minister Georges Clemenceau and British Prime Minister David Lloyd George.  Wilson’s negotiating ability was hampered by the flu as he lay stricken and quarantined in a hotel room. Wilson eventually recovered from the flu but unfortunately suffered a debilitating stroke six months later. The Versailles Treaty was stamped June 28, 1919 and historians conclude Wilson succumbed to the harsher demands by the French and Britain’s due to his weakened state from the flu.

After many many edits, there is your answer in Elise.

*Occasional updates

May 1, 2020

As reported in the Buffalo News today By Nelson D. Schwartz, Tiffany Hsu and Patricia Cohen


WASHINGTON – “Despite trillions in stimulus spending and a rush to reopen shuttered businesses in some states, the U.S. economy continues to stagger under the weight of the coronavirus pandemic, with a further 3.8 million workers filing for unemployment benefits last week.

The figures announced Thursday by the Labor Department bring the number of workers joining the official jobless ranks in the last six weeks to more than 30 million, and underscore just how dire economic conditions remain.

The depth of the chill was evident when the Commerce Department reported that consumer spending in March fell by 7.5% from February’s level, a stunning decline that helps explain why the overall economy is so weak. Consumer activity ordinarily accounts for more than two-thirds of the country’s output.”

Jerome Powell

November 23, 2021 update

So it’s been two years now since I authored this post. Today President Biden tapped Jerome Powell to a new Federal Reserve Term and the secretary of treasury secretary is Janet Yellen who has served previously as the Fed Reserve chief. Inflation has skyrocketed to 6.2%, the highest in 31 years.  Employment remains at 4.2 million below its pre-pandemic peak while labor shortages are throughout the country and wage growth accelerates as employers continue to scramble to fill vacancies. Looks like Gov. Lael Brainard will be vice chairwoman.

November 15, 2022 update

A year later inflation on the rise yet, unemployment down and statistically there are three job openings for every two eager job seekers.Fed raises rates

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