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Steve S
, October 06, 2015
Mention immigration today, and we think of Asia and Latin America, but between 1945 and 1960, the largest single immigrant group - about twenty three percent of total arrivals - came from Germany. One of them was Belvedere resident Robert Heller, who entered as a young college student, later becoming an economics professor, a banker, and eventually a key figure in the world of monetary policy. He recalls his path’s potholes, detours and milestones in a new book, The Unlikely Governor: An American Immigrant’s Journey From the Ruins of Wartime Germany To the Federal Reserve Board.
Although Heller has written four books on international trade, the original impetus for this more personal tale came from his grandchildren. They thought he should write down his stories: as a three year whose family’s house in Cologne was bombed, as a nine year old seeing his war-weary father - who suspected the Korean conflict would soon spread to Europe - plan the family’s escape to (neutral) Ireland, and of his arrival in New York in 1960, (the Karmann-Ghia he’d shipped brought a sales price that hardly helped finance his education.)
The Unlikely Governor isn’t just a string of sometimes suspenseful, sometimes humorous, incidents. Heller was an immigrant for whom the phrase ‘land of opportunity’ was genuine, and that view surely influenced which policies he advocated after he reached a position of public influence.
Although the Federal Reserve System has an enormous impact on business and finance in the United States, the Fed cultivates the impression that its policies are a blend of the views of one very prominent chairman and a committee of almost nameless and faceless bankers and economists. Heller’s book, which blends the personal and the political, puts a vivid name and face on at least one of the crew.
The Federal Reserve’s Board of Governors typically includes ‘doves’ who believe that monetary policy should be as accommodative as possible in order to promote employment, and ‘hawks’ who believe it should be as strict as possible to assure that inflation is kept in check. When Heller joined the Fed in 1986, it was headed by Paul Volcker - perhaps the most hawkish Fed chairman in its history. The country had recently undergone several rounds of steep inflation, and Volcker had taken extraordinary measures to change the psychology that turns inflation into a self-fulfilling prophecy and a never ending spiral. Volcker accepted the view that inflation was ultimately the result of a money supply that had been allowed to expand too rapidly, and he was determined to stop that.
Heller, too, was a hawk. Although born long after the German hyperinflation of the early twenties, like many of his former countrymen he shared an abhorrence of policy that conveniently, even deliberately, weakened a nation’s currency in pursuit of other goals. His memoir reveals a strain of economic conservatism that was acquired from many other sources as well. He was a graduate student and teaching assistant at Berkeley during the height of the ‘free-speech’ movement, but the extremism of fellow teaching assistants who wished to unionize and bargain for higher pay quickly disenchanted him.
Heller’s first full time teaching job began at UCLA, just after the Watts riots. The political controversies that grew out of a new awareness of rights and grievances soon engulfed the campus, alongside an academic ferment in his own economics department that foreshadowed the controversies over easy money vs. stable currency that continue to this day.
At one point, Heller needed a break from that intensity and took a teaching post at the University of Hawaii. Except for the fact that this was where he married Emily -" they exchanged vows on a catamaran - ‘paradise’ turned out to be a bit too quiet. He returned to the action by becoming Chief of Financial Studies for the International Monetary Fund.
And what action awaited! In 1971, Richard Nixon decided it was necessary to delink the dollar from gold. A monetary system that had been developed at the end of World War II - with fixed exchange rates and underpinned by dollar-gold convertibility - had come to an end. As the price of gold, along with oil and other commodities, fluctuated wildly, the era of floating exchange rates remained tumultuous throughout the seventies. The turmoil had begun to subside by the time Heller joined the Fed, but only just.
So Heller has lived through interesting times and has reflected on how those times helped shape his life - as a businessman and Fed Governor to be sure, but also as a teacher and a grandfather. It’s fortunate that his grandchildren encouraged him to write this book.
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