ANALYSIS VOLCKER LEAVES INFLATION IN CHECK, DOLLAR AGAIN WEAK.(Main)

Byline: Oswald Johnston Los Angeles Times

It was the summer of 1979, and the value of the dollar had been plummeting for two years, talked down by a weakened Carter administration and pushed lower still by double- digit inflation.

Paul A. Volcker, hulking, cigar-puffing and an inveterate opponent of Carter policies from his perch at the New York Federal Reserve Bank, was called in to save the situation as chairman of the entire Federal Reserve system.

Within three years, at the cost of two sharp recessions and a humiliating election defeat for the incumbent President, the dollar stabilized and rose to unprecedented heights as inflation tumbled.

And now, eight years later, Volcker is leaving the Fed at a time when the dollar has been talked down for two years by a weakened Reagan …