G. William Miller
Encyclopedia
George William Miller served as the 65th United States Secretary of the Treasury
under President Carter
from August 6, 1979 to January 20, 1981. He previously served as the 11th Chairman of the Federal Reserve
, where he began service on March 8, 1978.
Miller was the first and currently only Federal Reserve Chairman to come from a corporate
background, rather than from economics
or finance
. He is also the only person to have served both as Federal Reserve Chairman and as Treasury Secretary.
. His family soon moved to Borger
, the largest city in Hutchinson County
, Texas
, where Miller spent his childhood. After attending Amarillo College
for the 1941-1942 school year, he received an appointment to the U.S. Coast Guard Academy
. He graduated in 1945 with a B.S. in marine engineering and served until 1949 as a Coast Guard officer in the Far East and on the U.S. West Coast. During his time with the Coast Guard, he met and then married Ariadna Rogojarsky, a Russian emigre. He received a law degree from the Boalt Hall School of Law at the University of California, Berkeley
in 1952, and joined the law firm of Cravath, Swaine & Moore
in New York City
.
In 1956, Miller joined Textron, Inc
as an assistant secretary. He became a Vice President of the company in 1957 and President in 1960. In 1968 he became Chief Executive Officer of Textron and was elected Chairman and Chief Executive Officer in 1974, a post he held until he came to the Federal Reserve Board.
Miller also forayed into politics. From 1963 to 1965, Miller was Chairman of the Industry Advisory Council of the President's Committee on Equal Employment Opportunity; in 1966 and 1967, he was a member of the National Council on the Humanities. Miller also served in the "think tank" Club of Rome
. In 1968, he aided Hubert Humphrey
's presidential campaign as chairman of a Democratic-leaning business group.
At the time he joined the Federal Reserve Board, Miller was a director of the Federal Reserve Bank of Boston
and of several corporations. He was also a member of the Business Council and the Business Roundtable and Chairman of the Conference Board and of the National Alliance of Businessmen.
economy, still suffering from the increase in oil prices
from OPEC
. The change in the Consumer Price Index
was 4.9% in 1976 and 6.7% in 1977. Nevertheless, Miller maintained a Keynesian
belief that inflation could "prime the pump" of the economy, and would at any rate be self-correcting. He thus pursued a strongly dovish policy and opposed raising interest rates. The effect of this was to send the dollar
's value spiraling downward. In November 1978, only 11 months into his term, the dollar had fallen nearly 34% against the German mark
and almost 42% against the Japanese yen
, prompting the Carter administration to launch a "dollar rescue package" including emergency sales from the U.S. gold stock, borrowing from the International Monetary Fund, and auctions of Treasury securities denominated in foreign currencies. This proved only a short-term fix; while temporarily steadying the dollar, it soon resumed its fall. The portmanteau stagflation
, the combination of stagnation and inflation, increased in popularity during this time to describe the high rate of inflation that was failing to spur the economy.
Miller's lackadaisical measures against inflation caused distress among members of the Carter Administration itself. Treasury Secretary Blumenthal, Inflation Adviser Alfred Kahn
, and Chief Presidential Economist Charles Schultze
all advocated for increasing the interest rate prior to the April 1979 meeting, where Miller opposed such measures. Carter had to admonish his own staff over the press leaks used to carry on the dispute.
Miller was not perceived as having great prestige; not coming from an economics or Wall Street background, he was seen as an "outsider." A 2003 article in The Economist said that "America's central bankers have all made their weight felt across the political sphere, with the possible exception of William Miller, whose brief tenure in 1978-79 was notable for his attempts to ban smoking at the board." It is rare for the influential chair's opinion to not carry the vote at the Federal Reserve's meetings, but Miller was outvoted by the Board of Governors at a meeting in 1979 where he opposed an increase in the discount rate
, the rate at which the Federal Reserve lends to banks.
Economic historians have generally considered Miller's short tenure unsuccessful. The high inflation that Miller allowed required harsh "shock therapy" treatment by his successor Paul Volcker
to bring under control, which sent the U.S. economy into recession from 1980-1982. Steven Beckner, a Federal Reserve analyst, offered a particularly harsh assessment:
Miller was Fed chairman for just over a year when Carter appointed him Secretary of the Treasury in August 1979, replacing Michael Blumenthal as part of a major cabinet shuffle in which five Cabinet
members were replaced. Blumenthal had previously clashed with the administration, and Miller desired his post. Miller leaked certain unsavory personal details about Blumenthal to Carter, and soon Blumenthal was gone. Carter appointed Paul Volcker to replace Miller. He thus became the only person to serve as both Treasury Secretary and Chairman of the Federal Reserve. As Treasury Secretary, Miller is best known for his role on the Chrysler Loan Guarantee Board, which oversaw management of a $1.5 billion loan to rescue the carmaker from bankruptcy. This attracted some controversy as the bailout was thought to reward mismanagement and impede fair trade relations between the United States and Japan. Miller agreed that "The administration does not favor, as a general proposition, government aid to private corporations," but thought an exception should be made in Chrysler's case. Chrysler recovered in the early 1980s and paid off the loan early.
Miller is also known for managing the freezing and partial unfreezing of $12 billion in Iranian funds held in the United States during the Iranian hostage crisis. He also pushed through an accord with labor unions on wage-price guidelines that had been "stalemated for months."
Miller's economic policies failed to contain inflation and had little impact on rising unemployment rates. The poor state of the economy was a major factor in Carter's 1980 defeat by Ronald Reagan.
, a trustee and director of the Washington Opera, and chairman of the Washington-based H. John Heinz III Center for Science, Economics and the Environment. He also was chairman and chief executive of Federated Stores Inc. (now Macy's, Inc.) from 1990 to 1992.
William Miller died on March 17, 2006 from idiopathic pulmonary fibrosis
, a lung condition.
United States Secretary of the Treasury
The Secretary of the Treasury of the United States is the head of the United States Department of the Treasury, which is concerned with financial and monetary matters, and, until 2003, also with some issues of national security and defense. This position in the Federal Government of the United...
under President Carter
Jimmy Carter
James Earl "Jimmy" Carter, Jr. is an American politician who served as the 39th President of the United States and was the recipient of the 2002 Nobel Peace Prize, the only U.S. President to have received the Prize after leaving office...
from August 6, 1979 to January 20, 1981. He previously served as the 11th Chairman of the Federal Reserve
Chairman of the Federal Reserve
The Chairman of the Board of Governors of the Federal Reserve System is the head of the central banking system of the United States. Known colloquially as "Chairman of the Fed," or in market circles "Fed Chairman" or "Fed Chief"...
, where he began service on March 8, 1978.
Miller was the first and currently only Federal Reserve Chairman to come from a corporate
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
background, rather than from economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
or finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
. He is also the only person to have served both as Federal Reserve Chairman and as Treasury Secretary.
Early life and career
William Miller was born in Sapulpa, OklahomaSapulpa, Oklahoma
Sapulpa is a city in Creek and Tulsa counties in the U.S. state of Oklahoma. The population was 20,544 at the 2010 United States census, compared to 19,166 at the 2000 census...
. His family soon moved to Borger
Borger, Texas
Borger is the largest city in Hutchinson County, Texas, United States. The population was 14,302 at the 2000 census. Borger is named for businessman Asa Philip "Ace" Borger, who also established the Hutchinson County seat of Stinnett and several other small towns in Texas and Oklahoma.- History...
, the largest city in Hutchinson County
Hutchinson County, Texas
Hutchinson County is a county located in the U.S. state of Texas in the northern portion of the Texas Panhandle. In 2000, its population was 23,857. Its seat is Stinnett . Hutchinson County is named for Andrew Hutchinson, an early Texas attorney....
, Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
, where Miller spent his childhood. After attending Amarillo College
Amarillo College
Amarillo College is a two-year fully accredited community college in Amarillo, Texas with over 10,000 students that was established in 1929 as Amarillo Junior College...
for the 1941-1942 school year, he received an appointment to the U.S. Coast Guard Academy
United States Coast Guard Academy
Founded in 1876, the United States Coast Guard Academy is the military academy of the United States Coast Guard. Located in New London, Connecticut, it is the smallest of the five federal service academies...
. He graduated in 1945 with a B.S. in marine engineering and served until 1949 as a Coast Guard officer in the Far East and on the U.S. West Coast. During his time with the Coast Guard, he met and then married Ariadna Rogojarsky, a Russian emigre. He received a law degree from the Boalt Hall School of Law at the University of California, Berkeley
University of California, Berkeley
The University of California, Berkeley , is a teaching and research university established in 1868 and located in Berkeley, California, USA...
in 1952, and joined the law firm of Cravath, Swaine & Moore
Cravath, Swaine & Moore
Cravath, Swaine & Moore LLP is a prominent American law firm based in New York City, with an additional office in London. The second oldest firm in the country, Cravath was founded in 1819 and consistently ranks first among the world's most prestigious law firms according to a survey of partners,...
in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
.
In 1956, Miller joined Textron, Inc
Textron
Textron is a conglomerate that includes Bell Helicopter, E-Z-GO, Cessna Aircraft Company, and Greenlee, among others. It was founded by Royal Little in 1923 as the Special Yarns Company, and is headquartered at the Textron Tower in Providence, Rhode Island, United States.With total revenues of...
as an assistant secretary. He became a Vice President of the company in 1957 and President in 1960. In 1968 he became Chief Executive Officer of Textron and was elected Chairman and Chief Executive Officer in 1974, a post he held until he came to the Federal Reserve Board.
Miller also forayed into politics. From 1963 to 1965, Miller was Chairman of the Industry Advisory Council of the President's Committee on Equal Employment Opportunity; in 1966 and 1967, he was a member of the National Council on the Humanities. Miller also served in the "think tank" Club of Rome
Club of Rome
The Club of Rome is a global think tank that deals with a variety of international political issues. Founded in 1968 at Accademia dei Lincei in Rome, Italy, the CoR describes itself as "a group of world citizens, sharing a common concern for the future of humanity." It consists of current and...
. In 1968, he aided Hubert Humphrey
Hubert Humphrey
Hubert Horatio Humphrey, Jr. , served under President Lyndon B. Johnson as the 38th Vice President of the United States. Humphrey twice served as a United States Senator from Minnesota, and served as Democratic Majority Whip. He was a founder of the Minnesota Democratic-Farmer-Labor Party and...
's presidential campaign as chairman of a Democratic-leaning business group.
At the time he joined the Federal Reserve Board, Miller was a director of the Federal Reserve Bank of Boston
Federal Reserve Bank of Boston
The Federal Reserve Bank of Boston, commonly known as the Boston Fed, is responsible for the First District of the Federal Reserve, which covers most of Connecticut , Massachusetts, Maine, New Hampshire, Rhode Island and Vermont. It is headquartered in the Federal Reserve Bank Building in Boston,...
and of several corporations. He was also a member of the Business Council and the Business Roundtable and Chairman of the Conference Board and of the National Alliance of Businessmen.
Federal Reserve Chairman
Miller succeeded Arthur Burns as Fed Chairman in January 1978. He inherited a high inflationInflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
economy, still suffering from the increase in oil prices
1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
from OPEC
OPEC
OPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...
. The change in the Consumer Price Index
Consumer price index
A consumer price index measures changes in the price level of consumer goods and services purchased by households. The CPI, in the United States is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of...
was 4.9% in 1976 and 6.7% in 1977. Nevertheless, Miller maintained a Keynesian
Keynesian economics
Keynesian economics is a school of macroeconomic thought based on the ideas of 20th-century English economist John Maynard Keynes.Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the...
belief that inflation could "prime the pump" of the economy, and would at any rate be self-correcting. He thus pursued a strongly dovish policy and opposed raising interest rates. The effect of this was to send the dollar
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
's value spiraling downward. In November 1978, only 11 months into his term, the dollar had fallen nearly 34% against the German mark
German mark
The Deutsche Mark |mark]], abbreviated "DM") was the official currency of West Germany and Germany until the adoption of the euro in 2002. It is commonly called the "Deutschmark" in English but not in German. Germans often say "Mark" or "D-Mark"...
and almost 42% against the Japanese yen
Japanese yen
The is the official currency of Japan. It is the third most traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling...
, prompting the Carter administration to launch a "dollar rescue package" including emergency sales from the U.S. gold stock, borrowing from the International Monetary Fund, and auctions of Treasury securities denominated in foreign currencies. This proved only a short-term fix; while temporarily steadying the dollar, it soon resumed its fall. The portmanteau stagflation
Stagflation
In economics, stagflation is a situation in which the inflation rate is high and the economic growth rate slows down and unemployment remains steadily high...
, the combination of stagnation and inflation, increased in popularity during this time to describe the high rate of inflation that was failing to spur the economy.
Miller's lackadaisical measures against inflation caused distress among members of the Carter Administration itself. Treasury Secretary Blumenthal, Inflation Adviser Alfred Kahn
Alfred E. Kahn
Alfred Edward Kahn was an American professor, an expert in regulation and deregulation, and an important influence in the deregulation of the airline and energy industries...
, and Chief Presidential Economist Charles Schultze
Charles Schultze
Charles L. Schultze is a United States economist and public policy analyst. He served as chairman of the United States Council of Economic Advisers during the Carter Administration. In the 1960s Schultze was appointed assistant director of the U.S. Bureau of the Budget by President John F...
all advocated for increasing the interest rate prior to the April 1979 meeting, where Miller opposed such measures. Carter had to admonish his own staff over the press leaks used to carry on the dispute.
Miller was not perceived as having great prestige; not coming from an economics or Wall Street background, he was seen as an "outsider." A 2003 article in The Economist said that "America's central bankers have all made their weight felt across the political sphere, with the possible exception of William Miller, whose brief tenure in 1978-79 was notable for his attempts to ban smoking at the board." It is rare for the influential chair's opinion to not carry the vote at the Federal Reserve's meetings, but Miller was outvoted by the Board of Governors at a meeting in 1979 where he opposed an increase in the discount rate
Discount rate
The discount rate can mean*an interest rate a central bank charges depository institutions that borrow reserves from it, for example for the use of the Federal Reserve's discount window....
, the rate at which the Federal Reserve lends to banks.
Economic historians have generally considered Miller's short tenure unsuccessful. The high inflation that Miller allowed required harsh "shock therapy" treatment by his successor Paul Volcker
Paul Volcker
Paul Adolph Volcker, Jr. is an American economist. He was the Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with ending the high levels of inflation seen in the United States in the 1970s and...
to bring under control, which sent the U.S. economy into recession from 1980-1982. Steven Beckner, a Federal Reserve analyst, offered a particularly harsh assessment:
Treasury Secretary
United States Cabinet
The Cabinet of the United States is composed of the most senior appointed officers of the executive branch of the federal government of the United States, which are generally the heads of the federal executive departments...
members were replaced. Blumenthal had previously clashed with the administration, and Miller desired his post. Miller leaked certain unsavory personal details about Blumenthal to Carter, and soon Blumenthal was gone. Carter appointed Paul Volcker to replace Miller. He thus became the only person to serve as both Treasury Secretary and Chairman of the Federal Reserve. As Treasury Secretary, Miller is best known for his role on the Chrysler Loan Guarantee Board, which oversaw management of a $1.5 billion loan to rescue the carmaker from bankruptcy. This attracted some controversy as the bailout was thought to reward mismanagement and impede fair trade relations between the United States and Japan. Miller agreed that "The administration does not favor, as a general proposition, government aid to private corporations," but thought an exception should be made in Chrysler's case. Chrysler recovered in the early 1980s and paid off the loan early.
Miller is also known for managing the freezing and partial unfreezing of $12 billion in Iranian funds held in the United States during the Iranian hostage crisis. He also pushed through an accord with labor unions on wage-price guidelines that had been "stalemated for months."
Miller's economic policies failed to contain inflation and had little impact on rising unemployment rates. The poor state of the economy was a major factor in Carter's 1980 defeat by Ronald Reagan.
Later years
After Carter's administration ended, Miller founded G. William Miller & Co., a Washington private investment company that he likened to a discreet, Swiss-style merchant bank. He also served positions on a number of charitable and nonprofit organizations. This included treasurer of the American Red CrossAmerican Red Cross
The American Red Cross , also known as the American National Red Cross, is a volunteer-led, humanitarian organization that provides emergency assistance, disaster relief and education inside the United States. It is the designated U.S...
, a trustee and director of the Washington Opera, and chairman of the Washington-based H. John Heinz III Center for Science, Economics and the Environment. He also was chairman and chief executive of Federated Stores Inc. (now Macy's, Inc.) from 1990 to 1992.
William Miller died on March 17, 2006 from idiopathic pulmonary fibrosis
Idiopathic pulmonary fibrosis
Idiopathic pulmonary fibrosis is a chronic, progressive form of lung disease characterized by fibrosis of the supporting framework of the lungs...
, a lung condition.