HIS ONLY PEER IS HAMILTON:

When Volcker, a Democrat, was appointed in the summer of 1979 by President Carter to become the Federal Reserve's 12th chairman, the nation had lived for years with high inflation, caused in part by oil crises stemming from geopolitical and economic shocks.

Consumer prices were soaring at an annual rate of more than 13% that year. And Americans had become almost numb to the problem: families reacted by making purchases before their money lost value, and businesses routinely bumped up prices and wages.

Volcker wasn't alone in viewing this as inherently unstable for the economy or in thinking that the Fed needed to lift short-term interest rates to rein in runaway inflation. But few had advocated -- or anticipated -- the kind of quick and tough medicine that the new chairman would administer.

Within days of taking office, Volcker began the first of what would be repeated efforts to reduce the money supply and ratchet up interest rates, which would climb to more than 20% in 1981.

The aggressive policy made borrowing costs very expensive, and many feared that Volcker's bold strategy would prove to be too costly. In fact, the economy fell into recession, first in mid-1980 and then again in 1982.

Volcker came under withering criticism. Consumers decried the double-digit unemployment. Lawmakers from both parties vilified the Fed as an enemy of America.

Businesses went even further. Some plastered "Wanted" posters of Volcker and his colleagues. Farmers drove their rumbling tractors along Constitution Avenue in downtown Washington, D.C., near the Fed's marbled building, and home builders dumped piles of two-by-fours at the central bank to show their unsold lumber and the housing market's woes.

"This guy was berated by an awful lot of people, and day after day he just shrugged," Lyle E. Gramley, who watched Volcker's steely performance while serving as a Fed board governor in 1980-85, said in 2014. "He was one very tough guy." (Gramley died in 2015.)

Volcker's approach carried a heavy political price for Carter, contributing to his landslide defeat at the hands of Ronald Reagan in 1980.

Carter acknowledged as much in a statement issued Monday through the Carter Center: "Paul was as stubborn as he was tall, and although some of his policies as Fed chairman were politically costly, they were the right thing to do," he said. "His strong and intelligent guidance helped to curb petroleum-driven inflation, easing a strain on all Americans' budgets. We are grateful for his service to our country."

In the early 1980s, as the recession deepened, the Reagan White House grew anxious as well, with some top aides deriding Volcker and seeking to pressure him to back off.

But as George P. Shultz, Reagan's economic advisor and secretary of State from 1982 to early 1989, recollected, none of that mattered because Volcker had Reagan's backing.

"He put a political umbrella in effect on Paul," Shultz said in an interview with The Times in 2014, adding that Reagan and others in the administration knew that a solid economy depended on getting control of inflation.

Although Reagan and his Republican Party lost a number of congressional seats in the midterm elections in 1982, the next year, the nation's inflation rate -- which had peaked at nearly 15% in 1980 -- was brought down to about 3%. And the economy began a growth spurt that would last to the end of the decade.

"Paul could think long and act on that basis," Shultz said.

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