in fact only one person they are dead and that was paul volcker but let me take one step back. what was remarkable about the people around him was that most people had never heard of them. and if they had heard of them they heard of them in a much different contexts. as richard said john commonly was the secretary of the treasury and in many ways he would have been very much at home in the trump administration. he was a fierce nationalist and basically his motto was let's screw the foreigners before they screw us. he had no interest at all and global financial assistance and he arrived in washington thinking the europeans and the japanese had taken advantage of us over the last two decades and they owe us big. in contrast there was paul volcker who was the undersecretary of treasury but he was the only one there who really understood. but he too realized the dollar had to be devalued and the only way to do that was to use gold but he really felt okay the value of the dollar and he wanted exchanges. connolly couldn't care less. he just wanted to be sure that we could take advant

as you mentioned, paul volcker, i want to go back to the courage of 1979. doom and gloom crew wants volcker courage right now. i do not hear that from you that that is needed right now. what is the prescription for 2022, but what kind of courage is necessary for our monetary economist, our leaders on this theory? ken: we are in this pandemic where there is such a menace uncertainty. -- there is tremendous uncertainty. in 1979 it was clear what had happened. there was broad consensus the fed needed to do something and the politicians pushed back and i'm not sure jimmy carter knew what he was doing when he appointed paul volcker. today there is a lot of lingering uncertainty. i mentioned at the beginning that everyone on the fed is terrible, they're idiots. it is monday morning quarterbacking. i did not know when the pandemic broke out we would have the vaccine at this point. there were predictions about it. the modal predictions were much worse. where he will have to be courageous, he is going to raise rates next year. where he has to get courageous is things

are we more sophisticated about inflation or did paul volcker have a right that there's only one way to do it and that is tighten rates to dupe point that the economy softened and to do it in such a way that there's no doubt the expectations of continuous inflation art -- are we smarter than that are read basically destined to these crude instruments? >> as you should set the earlier history repeats itself. i'm not sure we are smarter. there's a piece on "wall street journal" this morning which recalls a picture that was just drawn up your with arthur and president nixon that said inflation is savory and anywhere a monetary phenomenon and we will just have to see. the monetary base has increased at 39.4% year-over-year. his formula was mv equals pt. and prices going up and the question is what happens with transactions to the economy so we will have to see jeffrey. i'm not sure we are any smarter than we were before. the point is when you have an aggressive fiscal policy you run a significant risk of inflationary pressure. i don't want to deviate. >> i want to come back to the dollar

i don't know if we'll get to that place where we need a paul volcker.re is no political will to act now. can you imagine the kind of, political courage that it would take for any fed official and a president to go side by side, hey, america, we're going to sock it to you. it will hurt for six months, then we'll have 12 to 20 years of prosperity. are you with me? maybe you fit that on a bumper sticker. >> yeah, exactly. i sure wish our politicians were that strong but the flesh is weak, charles. charles: it certainly is, brian. >> especially in politics. charles: certainly is. i guess that is why you and i are not in politics. >> right. >> always appreciate it what is happening to your knowledge. >> charles, thank you. charles: can president biden get tough enough with president vladmir putin? we have morgan ortegas, she will weigh in own the high-stakes call that went down today. today marks the 80th anniversary on pearl harbor by japanese forces in a surprise raid. fox business talks to some of the surviving american heroes. that is all coming up. ♪♪ c

and it hasn't been a problem for 40 -- since paul volcker was there at the fed. now we have 90% of americans are deeply concerned now, according to polls, about inflation. it goes across the board. this is not a partisan issue. it's everybody who is having to pay higher prices at the gas pump and at food counters and that sort of thing. and with carter, when it grew that big and he had to take it on, it killed his presidency. he went on to a bad defeat as you'll remember. but right now, what we are seeing is president biden has to get this thing under control soon and get credibility on it. 55% of americans disapprove of the way he's handling the economy. only 35%, only 35% approve of the way he's handling the economy. >> kirsten, if you can advise the white house right now on their economic message, what would you say? >> well, i think it's hard because it's complicated. and any time you have to have a complicated message with people, you are swimming upstream because -- and so i think to the extent they could simplify it and get that message through to people t

back in the late '70s, early '80s, the head of the fed at the time, paul volcker, became one of the most hated men in america because his fed raised interest rates a lot. he also saved america from inflation in the process. marcus, when people say do something, that something really is interest rate hikes which could be very, very painful as our parents and grandparents can tell us as they were adults in the '70s and '80s. same people saying do something would say, well, not that thing. don't raise interest rates. but that's what needs to happen. >> everything is already high so add it -- >> exactly. >> more pain solves the current pain. >> thanks, scott. >>> a new twist in a 25-year-old bay area cold case. the clue that led investigators to the suspect in a murder of a teenage girl and the closure family members thought would never come. we'll be right back. >>> this morning, washington, d.c., and the nation remembering former senator and presidential candidate bob dole. the national cathedral was packed for the funeral of the statesman who represented kansas for 36 years. and today's f

through the roof, and the fed doesn't even understand the true state of affairs on going back to the paul volcker days when he was earning the federal reserve. you know, the inflation numbers that prompted him to raise interest rates up to 6 same percent we got on the 10 year treasury now they were a lot lower than what we see today. in other words, these numbers are a lot higher than what they were when the central bank opted to start aggressively raising rates. the central bank is coming out and saying, we're going to keep rates at 0 to a quarter of percent. they're not raising rates. i don't get it mesh, i mean, clearly their job is to raise rates in this scenario. that's it. that's of that. there's no equivocation on this. they're not doing what they're supposed to be doing mesh. oh, absolutely not. i can sing a song about this. i don't know if you want me to, but you know the song, a baby steps. you got the cutest little baby face. excuse me. it's baby steps. now the feds got the cutest little baby steps here. they're talking about tapering and they reduce tapering. is just a reduction at th

economy, sorry, america, but it's over because the ability to do what paul volcker did raise right is no longer on the table because the duration rest, the fundamental understanding of the was kind of the bond market is so far out in the elk or that any little bit move up, we'll crash it anyway. so it's either crash or one way or crash it another way, but you're not going to avoid the crash for is your media reflection of reality in the world transformed what will make you feel safe? isolation, whole community? are you going the right way or are you being that somewhere? direct? what is true? what is faith? in the world corrupted, you need to descend a join us in the depths or remain in the shallows. i was diagnosed with cancer in 2009 when the doctors told me the cancer was incurable . i knew i had to make a change. so i decided to travel to one of the most toxic places in america. florida. one of florida is biggest industries and best kept secrets is fostering and the biggest player is $85000000000.00 industry. is mosaic, and i, there are reports of millions of gallons of contaminat

in 1979, paul volcker did the saturday night massacre. do you remember that that is where we are. he was sure and station would go higher. they are running a deficit of one.5% of gdp which is 0.one of what we have now and a poll, surprisingly interest rate which made markets realize this guy is serious. if we don't to do something like that, in the michigan survey that just came out, to a wage price spiral, all these wages that didn't keep up with inflation will go up and the firms will lift their prices, 70% of small businesses, so they are passing higher wage cost on to consumers. that is everybody's listing price. they need a saturday night massacre site to get it is under control and you're going after it was scored guns next year. if we end like the 70s we will be lucky. eric: that is a dire prediction. i looked at what the federal reserve did this week, talks more hawkish lead but when you look at inflation they think it will fall in half and their core inflation prediction excludes food and energy, 2.6% next year. is that pie in the sky? what are they seeing that you and i

i can three number the exact numbers, but i think paul volcker raised rates up to may be 19% when heng with inflation, so half a basis point or even 75 -- sorry, 50 or even 75 basis points shouldn't really do that much damage. jonathan: we are in a very different economy compared to where governor voelker was back then. do you think going to 50 is even tightening? do you think 1% is tightening, given where we are going? matt: you make a good point that we are in a very different situation then we have been in before. that is always going to be the case into the future. so i don't know. but to me, it does not feel like that would be very tight. i can imagine, for example, if my mortgage rose by 50 basis points, i would not be thrilled about it, but it would not be the end of the world. it would still not be the 17% that my parents paid on their mortgage in 1980. jonathan: you can't help yourself, can you? got to come back to you. matt: i would argue that is the case for everyone doing any good reporting. jonathan: we do try to take ourselves out of it sometime. matt can talk about him

crazy, and we got the yield around 1.5%. 1982, the last time we had inflation like this, under paul volcker, the 10 year yield reached 15%. so what is causing this, and what would lead it to reverse? that is the big issue. michael: and you talk about --romaine: and you talk about recessionary pressures, we don't hear anyone talking about a recession. you have yields basically the lowest on record. so you wonder what the market is seeing here where they are still willing to bid up stocks to record highs come about the same time, seem to be comfortable with the idea that you've got a dividend yield trailing inflation and an earnings yield that is negative territory. alix: this is more of the structural issue because this might show that the fed had less control over the back end of the curve because we had all that buying, particularly overseas buying, and i wonder if we can't look at the market just on this liquidy issue, that there is a broader structural change here. michael: we are not going to know that for a while, about a broader structural change. but multiple markets believe it is th

the only two examples i can think of where that wasn't the case was when paul volcker broke the backf inflation in the early 1980's, and when greenspan increased the fed funds rate in 1994. every other fed tightening cycle, the markets always get ahead of the actuals, when we end up tightening in the end versus what markets expect. we think that might be the case again this time. jonathan: darrell, great to catch up. darrell cronk weighing in on this equity market. your equity market up 17, advancing 0.3%. this go back to the conversation still building all week on this program. the sequencing of the federal reserve. there has been a belief recently that you just go from tapering, winding down by march, and then thinking about rate hikes. increasingly we have had a series of guests talking of the possibility of balance sheet reduction in between, that maybe that is the move after tapering. lisa: how much of this is because we have not seen any material tightening in financial conditions in response to the front end? why do we have these rate hikes not translated into volatility and e

we need paul volcker to come back quickly. >> sandra: thanks for spending the hour at the grocery store it's tough. there's sticker shock out there. some folks didn't look as closely before. they are now. you can see the polling out there. a majority of americans feel the pain at the pump, they feel the pain at the store. they don't like what is happening with inflation and the political consequences of that could be very real come the mid-term elections if as projections are that this lasts well into next year. solve this one for us. you got the dow in the bottom corner of the screen. we're talking about supply chain issues and empty store shelves and these commission crises that this administration is battling, the stock market keeps going higher. record high after record high, gary. what is fuelling that? >> well, we had a pretty good pull back. today good move. today's move all you have to do is look at the travel stocks. this was about over the weekend hearing that this new variant, the words being used are modest and we're not hearing "death." so i long for the day as a money mana

carter appointed paul volcker to be chair of the federal reserve, a carter appointee, that reagan got the credit for ending inflation. it was suggested that there was socialist spending by socialist spending jimmy carter. carter cut the budget. he was fiscally way too conservative for many democrats which is one of the many reasons why ted kennedy challenged him for the nomination in 1980 and basically couldn't get a hold of inflation but it wasn't his policies that caused inflation and actually we learned later and we now -- economists now know that government spending which throughout the 1970's everybody assumed this is what causes inflation. actually, not the case. so we've had this tremendous amount of government spending under both democratic and republican administrations in the last 20 years in particular and until we have these supply disruptions and other recent problems coming out of covid, we didn't experience that kind of inflation, anywhere close to it. so the connection between government spending and inflation has been severed by experience. john: jonathan alter with u

these chances may be, i'd still like to know what they are that we end up using jay powell and paul volcker in the same sentence at some point >> you know, it's not crazy. i think you just did it, scott, technically. you're not the first, but maybe one of the most prominent yet to do it. and i think that's where we are right now. which is if you ask me what the biggest risk out there is, it's that the fed has to do more than the newly priced market has already priced in to get control of inflation when i look at the numbers on friday, scott, i see more to come from a whole bunch of different, i think the housing number is going to keep accelerating i don't think they have control of the vehicle market yet where they have inventories backed up. i think that the whole wage spectrum of higher wages has yet to work its way through inflation. i was very sanguine about inflation earlier on as these supply chain disruptions persisted and people did not come back to the workforce i've started to get more concerned about it and i don't know where inflation's going to be in the summer, but i think it

it truly was a remarkable group of people, many of whom became lions, paul volcker.terson evolved into one of the great financiers of all time. i will say one thing about arthur burns at the fed. and this is what haunts everybody there. no chairperson wants to go down with arthur burns' legacy. at the end of that big table where the fomc meets, at one end is the chairman's office. you go through a door, and they've got a portrait gallery of former fed chairs. nobody looks at arthur burns' portrait. he is viewed as a big mistake. and, as you mentioned, it was because he wanted to please the president. and the question now being debated is does powell want to please this president? is he looking for reappointment when it comes up in february? or is he really preserving the independence of the central bank? i can tell you this. i know jay very well. we text each other, we play golf together. we don't talk about policy anymore. i'm not allowed to. but he doesn't want to be arthur burns. that should be hopefully a saving grace. we'll see. >> let me ask you one other quest

so your base case is that all of a sudden powell will turn into this hawkish inflation-fighting paul volcker figure. you really should not be managing your own money and you should give it to somebody else because this is wrnt this is going and if you're also worried about omicron becoming this horrific thing, there is no taper! i don't know if i agree with jenny that you can't own companies that have long duration cash flow expectation or higher multiple names i think like in most cases you want to strive for a balanced portfolio. you want companies that are cheap, of course, and i think you can find them in financial services and energy, but i also think you want growth because ifyearing about back to trend growth which i think is likely, the high growth names are always going have a bid, right? so yeah, you want to pick your spots -- >> can i just say -- >> i don't know what the regime ahead of us will be and that's a tough game to play as hard as it is to time the overall market. >> go ahead, jenny. >> okay. thanks i want to be really clear. >> i agree with you, josh, if you do own a hig

getting started in the '80s and then the early '80s, a lot of them have this era and as soon as paul volcker and brought inflation down and businesses started to invest in equipment and computer technology or what have you, and you -- these companies suddenly needed workers who were more skilled to operate, and yes, all the other factors that you just said were at play here as well. so this is when the demand for college graduates went up and the demand for nongraduates started going down. >> they didn't necessarily want to open the door to the newer, untested students and they were proceeding, and they wanted to advertise a that they have a graduation rate and not necessarily making spots for the students. >> right, and the same with private colleges, i mean, private colleges were doing more of that. they were sort of first ones to engage in the prestige game. and, yeah, and so what ended up happening, there were these for-profit colleges started to crop up, going off people with a g.i. bill and that's who came back from the vietnam war, who had gi bill money as well as student loans or gra

this beast they created, this mountain of vulnerability 69 who can take the job outside after paul volcker part two and do, quote, unquote the right thing right now? >> at this point you just don't know. let's add the other thing of printing money our debt has gone from 10 trillion to 29 trillion. so the whole history of the united states took us to 10 trillion in '08. other 19 trillion since. why? easy money. it is the worst possible scenario, brought to you by people who keep telling you they have us in mind but all they're doing is feeding the wealthy, killing savers with zero% interest rates, you're seeing bust after bust since february. i keep fingers crossed it does not hit the major indices. so far, so good, hopefully things get better. charles: nancy, same to you, real quick answer, the job itself, if you get the job you have to be ready to print, print, pause for a moment and then print, print, print. >> yeah i think we need somebody from outside of the beltway to step in but we thought that is what we got with powell. it has become very political. i will say great time to be a bo

you trade on a relief that powell is not turning into paul volcker. that's what you did today, but here's the thing. it's not his call ultimately. it's the inflation call and if he screwed this up, if he missed the boat on this , that inflation is a lot higher, man, all these things are going to trade-off. liz: wages, eci, the employment cost index, he referenced that and said yeah we started to notice after labor day wages were going up well yes because employers had to offer much more money. charlie: they aren't going up as much as inflation. liz: they are not. it's okay, i'm agreeing with you charlie: but you said the last time they were. liz: well they were very close but i will say when you pair the two together and superimpose that over consumer prices, we are starting to see a real hike there. charlie: the question is this , and nobody can answer this. this is a one-day rally by the way during the financial crisis can't tell you how many great one-day rallies we had right before bear stearns blew up when people said oh, it's going to be fine an

paul volcker in the 1980's, having to fight back against inflation, but the fomc like powell now agreeshat inflation is no longer transitory, the economy is quickly moving towards full employment, and importantly, they did not even speed up the taper. they signaled three rate hikes in 2022. look at our classic chart. you can see out of the 16 current members of the fomc, there are now 10 favoring rate hikes next year. there are two who see 4 rate hikes, not three, and there were five that only see one, but remember in september, nine of the people on the fomc or half then did not see any rate hikes in 2022. this was a major shift. when jay powell was asked about moving to rate hikes, listen to what he said. >> the economy is so much stronger. it is so much closer to full employment. inflation is running well above target and growth well above potential. there would not be the need for that kind of long delay. having said that, we will make this decision in coming meetings, and it is not her decision the committee has really focused on yet. >> -- kathleen: about omicron, you might say. p

don't want to predict that we will go back to where we were in the late 1970's, but i was with paul volckerhe announced his policy and i watched it happen and it took years to get out of that. . it will be painful. it will be painful for growth. it is going to be painful for jobs. we have an election coming next year which will be complicated. >> listening to the white house, they still say it may be transitory. one thing they point to is guest crisis, it is artificially -- gas prices. what about the difference between headline and so-called core? >> there are transitory elements in inflation, no question about it. but here's the thing, if you look at annual rates, take this month's number and you annualize it, it is 10%. a lot of that is no doubt transitory, to say that a lot of it is transitory is not to say that you will get price stability on its own. there is another point, we always talk about the things that are high and might be transitory. house prices on every index, rental prices on every index except the consumer price index, our app 20% over the last year -- are up 20% over the

in 1981, 9082, the last time we had this big bout of inflation, paul volcker, who is in the federal reserveenching recession. i remember i graduated from college at the time and you couldn't get a job as a burger flipper to sweat the inflation out of the system. when you go on a big drinking binge you have that hangover effect in the morning, i'm really worried about that hangover effect of all this inflation in cheap money in the economy in 2022. >> gillian: no one likes hangovers, democrats nor republicans. take a listen to the former acting counsel of economic advisors. >> you already see unions sort of demanding cost-of-living adjustments already, so you see increases coming from inflation. once those kick in, the sellers have to recoup those costs and higher prices. that is what economists are worried about. people are really feeling a lot poorer right now. >> gillian: so the fault is with laborers asking for higher wages? >> i disagree with that premise. i think the market is efficient, and if someone can get a job that pays them more and gives them more benefits, that means that's wh

stuart: after the carter years it was paul volcker who raise the district -- percentage rate and theicymakers, inflation got so bad the volcker almost had no choice but slam the brakes on the money supply. remember the gut wrenching recession? it was the worst recession since the great depression. it crashed the economy. it took 12 to 16 months for the economy to recover. i graduated from college about that time. with a college degree you couldn't get a job flipping hamburgers, it was so bad. i don't want to see that so bad but that is why the fed has to get ahead of this and not wait. stuart: thanks for sorting it out. >> you haven't aged. stuart: i said the same about you. tomorrow, first lady jill biden and second gentleman doug i amohfe, they will meet with first responders who were epidemic christmas parade attack. leo terrell is a civil rights attorney and joined me now. it has been a month since the outrage in what keisha. why are they going back now? >> joe biden should go there. kamala harris should go there. the second string, they have to answer questions about the suspect

that's his background just like paul volcker the only two didn't have ph.d.s including volker he doesvolker had to do things painful as things got out of control. so i have great confidence he will move forward in the right way. that's my point. >> that's a really interesting thought, too not beholden to them they didn't want him there this idea of independence. others said they are still part of the government and have to be careful because they realize that if they raise rates too much, again, you know -- >> not talking about rates. >> historically low levels but if you raise rates too much, big things in terms how you pay back the government's debt. that those interest payments will end up eating much more of the tax payments that you take in, and it means what you can't spend on other things. how big of an issue does -- how big an issue is that for fed governors or anybody else sitting down at the fomc meeting? >> i don't ever remember that being discussed. remember, as i was leaving we had already taken down an enormous amount, in fact 100% of the government debt issuance now, de