Future historians may be able to record that the U.S. avoided a severe recession in 1979 partly because the brisk, self-assured chairman of the Federal Reserve Board talked the country out of it. Bill Miller, 53, refuses to go along with the gloom-and-doom-sayers who see calamity around the corner. “If the media is the message,” he insists, “and we hammer every day that there is going to be a recession, then we’ll have one, because every one of us will hole up from his normal activities and fear will replace confidence. But there is no economic reason to have a recession.”
With inflation at an annual rate of close to 10 percent, Miller concedes that recovery will not come soon. “Inflation forces have built up over a dozen years,” he says. “It’s going to take us quite a while to dislodge them.” Specifically, Miller believes the U.S. must dig in for a period of tighter credit, slower economic growth and reduced federal spending. “If we fail,” he says, “then I’m afraid we will create conditions of instability, tension and inequality that will lead to very dangerous confrontations in the world. But,” he adds more cheerfully, “I’m sure that if we can spend the five to seven years that are necessary to wring out this inflation, we will be looking at a quarter of a century beyond that of very promising times.”
Last January, when crusty Arthur Burns resigned from the Fed chairmanship after eight years, Washington wondered what kind of man could possibly replace him. As it turns out, a very self-confident one. “The fact that Burns’ personality and reputation might overshadow my stewardship just didn’t enter into my thinking,” Miller says.
Some philosophical differences became apparent too. Burns had repeatedly admonished the President he couldn’t fight inflation and unemployment at once; Carter appointee Miller appeared more compliant. But in nine months he has established his own reputation for independence and thoughtfulness. He enjoys a close relationship with Treasury Secretary W. Michael Blumenthal, with whom he breakfasts once a week, and refuses to be embarrassed by suggestions that he is more a team player than his illustrious precedessor. “I’m never surprised when the Administration and I agree,” Miller says with a grin. “I think intelligent people looking at the same set of facts always come to the same conclusion, and I assume everybody in Washington is intelligent.”
That assumption, perhaps, is based on his own uncomplicated assertiveness, the product of a rough-and-tumble boyhood in Borger, Texas. His father earned $150 a month (and a free apartment) as the town’s police and fire chief, judge and building inspector. By the time little G. William (then called George) was 9 years old, he was working in his Uncle Willie’s hamburger joint. From there it was onward and upward. After Coast Guard service in World War II and law school under the Gl bill, Miller began a brief career as a Wall Street lawyer. Then, in 1956, he accepted a management position with Textron, a Rhode Island-based conglomerate whose products range from Talon zippers to Bell helicopters. Four years later, at 35, he was president of the company.
Miller’s salary plummeted from $400,000 a year to $57,500 when he joined the Fed, and that’s meant cutting back sharply on expenses. “I’ve had to resign from a lot of clubs,” he admits, “and I probably should resign from some more.” He and his wife, Ariadna, shopped around for six months before taking a modest plunge into the overheated Washington housing market. They bought a two-bedroom condo only after negotiating the financing cost down. It was just the kind of prudent investment that Miller would recommend as national policy in a time of inflation. “We’ve got to have a steady hand on the reins,” says the man from Texas. “We can’t let the horse run wild—but neither can we pull so hard we break his jaw.”