Central bankers are by tradition an aloof bunch, awed into solemnity by their own eminence as arbiters of a nation's money supply and guardians of the value of its currency. They immerse themselves in financial esoterica, dress somberly in three-piece blue suits, and give the impression that they speak only to one another and to God. When they do appear in public, they issue Delphian warnings, usually of impending inflationary doom. An optimistic central banker has been defined as "one who thinks the situation is deteriorating less rapidly than before."
So what is one to make of G. (for George) William Miller? As chairman of the U.S. Federal Reserve Board, Miller, 53, is the most powerful of all central bankers—but he is far outside the mold. He delights in reminiscing about his boyhood in the oil boomtown of Borger, Texas, a throwback to the wild West of unpaved streets and gun fights. Miller vividly remembers the day that the town's founder, Ace Borger, was shot dead in the post office. He cheerfully relates that his last exposure to classroom economics was a basic course at the Coast Guard Academy 33 years ago. All his knowledge of money markets was picked up while he ran Textron Inc., the $2.8 billion conglomerate based in Providence that makes thousands of products, ranging from helicopters to watchbands.
Far from affecting bankerly reserve, Miller roars with laughter at his own often corn-pone jokes, some directed at the august but arcane institution that he heads. He has invented a mythical poll in which 23% of the U.S. population thought the Federal Reserve was an Indian reservation, 26% judged it to be a wildlife preserve and 51% identified it as a brand of whisky. Most important, he speaks almost garrulously in tones of unabashed can-do optimism. The nation, he insists, can bring down its frightening rate of inflation without suffering another recession—indeed, while working toward a "model economy" in the 1980s.
That may sound less like optimism than Pollyannaism. So far this year inflation has exploded. From March through May, it averaged 11.3% at an annual rate, one of the worst three-month performances ever. Though no one expects the surge to remain that bad, the Carter Administration last week forecast a 7.2% rise for the full year, and some economists expect an 8% increase.
A healthy economy cannot tolerate that pace. It wipes away most wage and salary gains, lowers standards of living and sets poor, middle class and rich to snarling at one another. It also weakens the dollar overseas: foreign moneymen rush to dump greenbacks out of fear that inflation will steadily erode their value. Last week the dollar slipped to a record low of 201 Japanese yen, down almost 17% just since January. The dollar's slide, in turn, makes U.S. inflation worse because it raises the prices that Americans pay for imported goods.