By the time Ronald Reagan was inaugurated, in 1981, the U.S. economy had slipped into a deep recession, one for which the Volcker Shock was largely blamed. Unemployment neared 11 percent. Volcker became a target of popular anger. One welcome ray of sunshine came from the White House, with Reagan giving full support to the continuation of Volcker’s program. (Volcker later said, “I don’t kiss men, but I was tempted.”) Another came from the American Home Builders Association, in early 1982. Its industry had been badly hit by the recession, but Volcker gave a tough speech to the association about staying the course against inflation, and was amazed to get a standing ovation.

Inflation—blessedly—broke in mid-1982. The second half of the year saw a flat consumer price index. Real GDP for 1983 was a very respectable 4.6 percent and a blistering 7.2 in 1984. By 1986 annual inflation had come down to only 2 percent. The crisis was effectively over. After 1982, Americans enjoyed the lowest interest rates (with a blip here and there) among the major industrial countries, and interest rates are low to this day. The second half of the 1990s was one of the most prosperous periods in history—there was a twin boom in high technology and in housing. Volcker attributes the crash that came in both industries to the same “greed and grasping” he cited when we spoke.

Volcker served two terms as the chairman of the Fed, giving way to Alan Greenspan in 1987. By that time, the challenges confronting the Fed had moved to new arenas—like the reckless “oil lending” by the big American banks to Mexico, Brazil, Argentina, and a string of smaller countries. In Keeping at It, Volcker writes, “Looking back, I see Latin America today as a sad culmination of hard-fought, constructive efforts to deal with a debt crisis that, aided and abetted by reckless bank lending practices, grew out of a chronic absence of suitably disciplined economic policies.” Volcker will never escape a Fed-inflected prose style, but his assessment is spot-on.

Retirement has treated Volcker well. He did some teaching and loved it. He spent 10 contented years as the chief executive of Wolfensohn & Company, an old-fashioned investment bank, which mostly gave advice on mergers and acquisitions. When he retired, he had plenty of time for nonprofit activities and was much in demand. He chaired inquiries into the ownership of Jewish art sequestered in Swiss bank vaults; the massive theft from food and medical programs after the Iraq War; and corruption in the World Bank.

Volcker also played an important role in the cleanup after the 2008–2009 crash. His advice was widely solicited, if not always followed. In his memoir, he describes sitting at a conference and listening to bankers warn that new regulations must not inhibit trading and “innovation.” He finally exploded: “Wake up, gentlemen. I can only say that your response is inadequate. I wish that somebody would give me some shred of neutral evidence about the relationship between financial innovation recently and the growth of the economy, just one shred of information.” His lasting contribution from this period is the so-called Volcker Rule, which bars traders from taking risky positions with depositors’ funds, and which he summarizes as “Thou shall not gamble with the public’s money.”