Wealth & Money Quote by Paul A. Volcker

Volcker’s line is a dry warning disguised as plainspoken common sense: inflation only “works” as a trick when it surprises you. The moment everyone starts baking higher prices into wages, contracts, and interest rates, the trick stops being a trick and turns into a grind. He’s puncturing the seductive political fantasy that a little extra inflation can painlessly goose growth or ease debt burdens. It can, briefly, but only by catching people off guard - shaving purchasing power before they’ve had time to demand compensation.

The subtext is about expectations as a kind of economic gravity. If workers anticipate prices rising, they push for higher pay now. Businesses anticipating higher costs raise prices preemptively. Lenders demand higher rates to protect themselves. Inflation becomes self-propelled: not a one-off boost, but a new baseline that forces everyone to run faster just to stay in place. Volcker’s phrasing - “doesn’t do you any good anymore” - is almost folksy, but it carries a hard institutional lesson: credibility is policy.

Context matters. As Fed chair, Volcker inherited the late-1970s nightmare where inflation wasn’t an accident; it was a mood. The U.S. had learned to expect prices to climb, and that expectation fed the spiral he famously broke with punishingly high interest rates. The quote doubles as a defense of that brutality: once inflation is anticipated, the “benefit” is gone, but the damage remains - and the only way out is to change what people believe will happen next.