The argument that “Volcker did what needed to be done” overlooks a fundamental issue: no action, no matter how economically justified, can override basic moral laws. Throughout history, civilizations have recognized the dangers of usury—excessive interest rates that trap individuals and economies in cycles of debt. Volcker’s policies, particularly his removal of usury caps through the 1980 Depository Institutions Deregulation and Monetary Control Act, did not simply fight inflation; they permanently embedded high-interest lending into the American financial system. This shift marked a turning point where the economy became increasingly dependent on debt rather than wage growth and industrial production.
This same reasoning was used during the 2008 financial crisis, when reckless lending practices triggered a massive economic collapse, and the response was, “We had to bail out the banks to save the system.” The result? Banks and creditors emerged stronger, while ordinary Americans bore the burden through foreclosures, job losses, and long-term financial instability. Similarly, in the 1980s, Volcker’s aggressive rate hikes devastated small businesses, homeowners, and workers, all under the justification that it was a “necessary” sacrifice. However, just because an action achieves a desired outcome does not mean it was the only or the best course of action. The long-term consequences of Volcker’s policies—namely, the financialization of the U.S. economy and the normalization of predatory lending—demonstrate that he did not just tame inflation; he fundamentally restructured the economy in a way that prioritized creditors over workers.
