Paul Volcker is known for the tough measures he used as Fed chief to reel in inflation in 1981, risking a recession and widespread pain in the short term to get the economy back on track for the next 2 decades. Now Volcker, tapped as chairman of Obama’s Economic Recovery Advisory Board, says painful measures are going to be required again, the Los Angeles Times reports. “It’s going to be a tough period,” he predicted recently.
Volcker sees rampant American consumerism and unrestrained manipulation of financial markets as causes of the current global crisis; he'll be looking to reel in both. "The market was being run by mathematicians who didn't know financial markets," he said earlier this year. Volcker’s stature is expected to give him major influence in the new administration, despite a merely advisory role. "The only reason I sleep at night," a longtime colleague tells the Times, "is that Paul Volcker will have the president's ear."