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His success in following that approach has been far from perfect, and at times the nation's money supply has swung up and down erratically. But on the whole, Volcker proudly asserts that he has done just about what he said he would. In the process, however, he has become the nation's prime scapegoat for all its economic ills. The cover of the January-February issue of the Tennessee Professional Builder, a construction-trade publication, consisted of a WANTED poster of Volcker and the other six governors of the Federal Reserve (THE MALEFICENT 7), charging them with "premeditated and cold-blooded murder of millions of small businesses" and "kidnaping (and holding for ransom) the American dream of home ownership." R.K. Resmondo, who runs a cattle ranch near Kissimmee, Fla., has a simple solution for high interest rates: "Take a stick and run Mr. Volcker out of the country."
The heat on Volcker has been hottest of all in Washington, which has hardly surprised him. Members of the Reagan Administration, chagrined because high interest rates have plunged the economy into an unexpected recession, have been quick to blame Volcker for their troubles. Ronald Reagan, asked at a press conference in January whether he thought Volcker should resign, declined to comment, on the ground that the Federal Reserve is an independent entity. This was scarcely a pleasant augury for Volcker, since Reagan will have to decide whether to reappoint him as Federal Reserve chairman when his term expires a year from August.
Reagan met with Volcker alone in the White House living quarters on Feb. 15—the first time the two men had ever conferred without aides, and only the fourth business meeting between them since Inauguration Day. Three days later, the President changed his tune, volunteering at a press conference that the Administration and the Federal Reserve would try to work in concert.
In reality, the rapprochement is primarily political. Reagan knows that any open breach with the nation's central bank could only hurt his Administration. Volcker is already making the convincing argument that the Administration's runaway budget deficits, which are expected to top $110 billion this year alone, are simply driving interest rates higher. A full-blown quarrel between the Federal Reserve and the White House would only draw attention to Volcker's arguments.
Other Volcker critics are hardly so restrained. Congressmen, their ears burned by constituents' tales of woe about then-inability to pay high interest rates, seethe with helpless frustration. Henry Gonzalez, a Democratic Representative from Texas, has made the grandstand play of calling for impeachment of Volcker (the only way a Fed chairman can be removed). Jim Wright, another Texan, who is Majority Leader of the Democrat-controlled House, last week called for punitive taxes on lenders who charge excessive interest rates, a measure that he knows cannot be got through Congress anyway. Howard Baker, Majority Leader of the