What is Allan Meltzer’s Net Worth?
Allan Meltzer was an American economist and professor who has a net worth of $8 million. Allan Meltzer was a professor of Political Economy at Carnegie Mellon University’s Tepper School of Business and his three book series entitled A History of the Federal Reserve is considered the most comprehensive history of the central bank.
Allan H. Meltzer was born in Boston, Massachusetts in February 1928. Meltzer received his A.B. and M.A. degrees from Duke University in 1948 and 1955, respectively. He earned his Ph.D. degree from UCLA in 1958. He served, from 1973 to 1999, as the Chair of the “Shadow Open Market Committee”, a group of economists, academics, and bankers that met to critique the actions of the Federal Reserve’s Federal Open Market Committee. From 1988 to 1989, he served as an Acting Member of the Council of Economic Advisors at the end of the Ronald Reagan administration. He later served as a visiting scholar at the American Enterprise Institute.
Allan H. Meltzer, whose life spanned from February 6, 1928, to May 8, 2017, was a distinguished American economist. He held the prestigious position of the Allan H. Meltzer Professor of Political Economy at Carnegie Mellon University’s Tepper School of Business and Institute for Politics and Strategy, located in Pittsburgh, Pennsylvania. Meltzer’s academic focus centered on the intricate world of monetary policy and the functioning of the US Federal Reserve System. Over the course of his career, he authored numerous scholarly papers and books, delving into the development and practical applications of monetary policy, as well as exploring the rich history of central banking in the United States. Additionally, Meltzer, in collaboration with Karl Brunner, founded the Shadow Open Market Committee, a council with a monetarist perspective that rigorously critiqued the actions of the Federal Open Market Committee (FOMC).
The Man Behind the Aphorism
Meltzer’s intellectual journey was marked by profound insights, one of which gave birth to the famous aphorism: “Capitalism without failure is like religion without sin. It doesn’t work.” This statement encapsulated his belief that shielding companies from failure disrupts the essential dynamic process that holds stockholders accountable for losses and provides a mechanism for disciplining managers who err.
A Scholar’s Early Days
Born in Boston, Massachusetts, in 1928, Allan H. Meltzer embarked on his academic pursuits that would ultimately shape his remarkable career. He earned his A.B. and M.A. degrees from Duke University in 1948 and 1955, respectively. The culmination of his academic journey came in 1958 when he completed his Ph.D. under the guidance of Karl Brunner at UCLA. The foundations of his scholarly path were laid.
A Role at Carnegie Mellon University
In the year following the completion of his Ph.D., Meltzer began his association with Carnegie Mellon University, where he would leave an indelible mark as an associate professor. This was the beginning of his academic endeavors and a platform for his profound contributions to the field of economics.
Leading the Shadow Open Market Committee
One of Meltzer’s most significant roles was serving as the Chair of the Shadow Open Market Committee from 1973 to 1999. This committee comprised a distinguished group of economists, academics, and bankers who convened to scrutinize the actions of the Federal Reserve’s Federal Open Market Committee (FOMC). Meltzer’s leadership in this capacity demonstrated his commitment to fostering transparency and accountability within the Federal Reserve System.
A Glimpse into Government Service
In the late 1980s, during the Ronald Reagan administration, Allan H. Meltzer took on the role of Acting Member of the Council of Economic Advisors. His brief tenure in this government position highlighted his expertise and dedication to economic policy.
Recognition and Awards
Meltzer’s contributions to the field of economics did not go unnoticed. In 2003, he received the inaugural Irving Kristol award from the American Enterprise Institute (AEI), becoming the first-ever recipient of this prestigious accolade. The significance of this recognition was underscored by the presence of President George W. Bush at the award dinner, where he paid tribute to Meltzer’s influence.
The Meltzer Commission
Allan H. Meltzer chaired the Congressionally mandated International Financial Institution Advisory Commission, often referred to as the Meltzer Commission. This commission played a pivotal role in proposing substantial changes to the operations of international financial institutions, including the International Monetary Fund (IMF) and the World Bank. Notably, the majority report recommended that the World Bank withdraw its lending activities from “middle income countries.” However, this proposal faced criticism and controversy, with some arguing that it reflected ideological preconceptions rather than a comprehensive understanding of the World Bank’s operations.
Evaluating the Federal Reserve’s Actions
Meltzer’s analysis extended to evaluating the Federal Reserve’s actions during significant economic events. He expressed reservations about the Fed’s intervention in rescuing the leading bond-insurer AIG in 2008, emphasizing the importance of early prevention or allowing market forces to resolve such crises.
The Lehman Brothers Case
The Federal Reserve’s decision not to rescue Lehman Brothers in the wake of the financial crisis garnered mixed responses. Initially, Meltzer appeared to support this decision, highlighting the subsequent acquisition of Lehman’s assets by Barclays. However, in hindsight, he revised his stance, characterizing the decision as one of the Federal Reserve’s most significant blunders.
In May 2009, Meltzer raised concerns about the potential for severe inflation due to the significant increase in bank reserves resulting from the Federal Reserve’s bond and mortgage purchases. His warnings echoed the importance of vigilant monetary policy.
A Comprehensive History
Meltzer’s scholarly contributions extended to the realm of literature. His work, “A History of the Federal Reserve,” stands as the most comprehensive history of the central bank. This monumental endeavor spanned multiple volumes, with each volume covering distinct periods in the Federal Reserve’s history. Volume I explored the formative years from the Fed’s inception in 1913 to the Treasury accord in 1951. Volume II Book 1 delved into the period from the accord in 1951 to 1969, while Volume II Book 2 navigated the years from 1970 to the conclusion of the Great Inflation in the mid-1980s.
Leading the Mont Pelerin Society
In recognition of his stature in the field of economics, Allan H. Meltzer was elected as the president of the Mont Pelerin Society for the 2012–2014 term. This appointment underscored his intellectual leadership within a prominent international organization.
Views on Environmental Policy
Meltzer’s intellectual curiosity extended beyond economics, and he voiced his opposition to the adoption of a “cap and trade” scheme for carbon emissions in the United States. His stance emphasized the complexity of addressing global climate change through such policies.
Allan H. Meltzer’s legacy as an economist, scholar, and advocate for sound monetary policy and economic transparency remains enduring. His contributions to the field of economics, from his extensive writings to his leadership roles, continue to influence academic discourse and shape economic policy discussions. Meltzer’s dedication to economic principles and his commitment to rigorous analysis have left an indelible mark on the field, ensuring that his insights will continue to inform economic thinking for generations to come.