The story of American investment in Ireland that Charles Haughey related to the Economic Club of New York in May 1982 must have amazed many listeners. Because, as Tim Sablik of the Federal Reserve Bank of Richmond characterizes it, the implementation of tight monetary policy to contain soaring inflation between July 1981 and November 1982 ignited the “worst economic downturn” since the Great Depression. Here, “downturn” denotes the “largest cumulative business cycle decline of employment and output” in America's post-World War II period (Goodfriend and King, 1). When Paul Volcker was named Chairman of the Federal Reserve on August 6, 1979, inflation had already risen to over 13% and the unemployment rate stood at 7.5% as manufacturing, residential construction and automobile sales languished. In the latter two sectors, unemployment reached levels of 22% and 24%, respectively, and mortgage rates in 1981 climbed to 18.63% in October. By 1989, they were still over 10%. However, eventually Volcker and the “Reagan recovery” brought inflation under control. During the president's two terms, the Standard and Poor 500 Index more than doubled; new jobs were created, and mortgage rates came down (though, speaking from personal experience, a 30-year fixed mortgage of nearly 12% in 1985 was hardly a panacea for first-time homebuyers). As economists Marvin Goodfriend and Robert King put it, Volcker's eventual victory over inflation made the “inflation peak” of early 1980 “stand out dramatically in the U.S. experience” (1).