His mother made an impact, too. In his office, Paul kept a framed copy of a letter, dated Nov. 15, 1929, about two weeks after Black Tuesday, that she had written to her own mother. It reads, in part:
“As for what I think of the stock markets, I haven’t bothered much about it. I have expected a drop from the inflated values for a long while and while most stocks are below their real values now the pendulum will undoubtedly swing back to normal again. Of course people who bought on margin mostly got stung. Gambler’s luck, and anyone is foolish to gamble if he’s using money he needs for it.”
Not a long way from that last sentence to the Volcker Rule!
During our interviews, Paul often defied my expectations. He had criticized the high bonuses and trading-centric culture of firms like Goldman Sachs Group Inc., which he thought undermined any focus on their customers. So when President Donald Trump was said to be considering naming former Goldman Sachs executive Gary Cohn as Fed chairman, I was surprised that Paul approved. The Fed relied too much on academic economists; it needed someone with Wall Street experience, he said.
Another time, I asked for his view of Modern Monetary Theory, which posits that a government with its own central bank and currency can and should keep spending until the economy is running at full employment. Surely the greatest living inflation fighter would recoil at such a prospect? But instead he simply pointed out that MMT hadn’t really been tested.
It wasn’t just his thinking that was surprising. At 90, Paul was still taking the bus to the office and back home, always happy when strangers recognized him and said hello. He relished spending time with people from all walks of life.
One day, Paul handed me a sheaf of pages he’d written: an initial draft of a preface. He was recovering from an operation, had some down time and had started writing. I encouraged him to continue. His assistant, Melanie, typed up his often indecipherable handwriting. Soon he was back in his office, sitting at his desk, writing out his life story on legal pads. On some days he’d stay at the office writing for hours after Melanie and I had left him.
His powers of concentration were extraordinary. I became accustomed to sitting silently in his office, waiting as he finished absorbing whatever he was reading. He brought that focus to anything he decided was worth his time. A devoted home cook, he studied the New York Times’s weekly food section so carefully that at least twice he showed me minor errors he’d found in the recipes.
He loved words and pulled out his dictionary or thesaurus during several of our discussions. (He wrestled in particular over which adjective best described James Baker, settling on “wily.”) Transcripts of the Federal Open Market Committee meetings he chaired from 1979 to 1987 show the careful deliberations he conducted over how to convey the committee’s meaning to the markets.
So of course he was a great letter writer. At his alma mater, Princeton University, I spent a few days reading through the papers he had donated, including copies of letters he’d written to important people like Milton Friedman, Alan Greenspan, Henry Kissinger. But also the four-paragraph response to a schoolgirl in Wyoming who asked which novel most influenced him (he named three: George Orwell’s “Animal Farm” and “1984” as well as “Oliver Wiswell” by Kenneth Roberts) and the thank-you letters to each Federal Reserve typist who worked overtime preparing materials for the Fed’s momentous announcement of a new approach on inflation in October 1979, one that focused on limiting the supply of money rather than on setting its price.