liberal economist, a disciple of John Maynard Keynes and the Keynesian principles
that had guided the Democratic Party’s
economic policy” since the presidency of
Franklin D. Roosevelt, Greider wrote.
The book recounts Teeters telling fellow board members, “You are pulling the
financial fabric of this country so tight
that it’s going to rip. Once you tear a
piece of fabric, it’s very difficult, almost
impossible, to put it back together again.”
She chose the metaphor purposely, she
told Greider, in an effort to sound a realworld — and female — note rarely heard in
those halls. “None of these guys has ever
sewn anything in his life,” she said.
As early as 1978, The New York Times
called her, “a dove among the Fed’s hawks.”
Indeed she was from the start. Teeters
argued for a pause in rate hikes as soon as
she was appointed. In one of her first acts,
she voted against a move by Chairman G.
William Miller to raise the discount rate 25
basis points to 8%. “It took a strong-willed
governor to stand alone and repeatedly
argue for a competing analysis,” Greider
wrote. “Nancy Teeters was one.”
In his November 25, 2014 obituary of
Teeters in The New York Times, Paul
Vitello called her “a liberal economist who
broke with tradition by openly criticizing
decisions of fellow [Fed] board members
that she felt hurt consumers and working
people.”
Vitello noted that, “while she agreed
with the need to control inflation, which
approached 14% in 1980, Teeters criticized Volcker and the board’s majority for
squeezing the money supply too tightly.
By sending the prime rate to a record
high of 21.5% in 1981, she warned, the Fed
risked pushing the economy into a recession and leaving millions of people out of
work.”
“You don’t need to go to 20 or 21% to
restrain the monetary supply,” Teeters
told The New York Times in January 1981.
Her analysis proved correct, wrote
Vitello. “But her dissent, first in internal
meetings, then in public statements, did
not succeed in changing the Fed’s inflation policy. Teeters raised other issues as
well. She was outspoken in her opposition
to the spate of mergers and acquisitions,
beginning in the early 1980s, which created the current system of too-big-to-fail
superbanks.”
Teeters was born Nancy Hays on July
29, 1930, in Marion, Indiana, the youngest of three children of Edgar and Mabel
Hays, according to the Times obituary.
“Her father was an unsuccessful oil speculator who had returned to his hometown
in Indiana in the late 1920s to work as
a paper box salesman. Her mother, a
homemaker, tried to discourage Nancy,
her only daughter and a top student, from
attending college.”
“With her father’s support,” the Times
detailed, “she went to college anyway,
graduating from Oberlin in 1952. After
marrying a fellow student, Robert D. Teeters, they both went to the University of
Michigan to pursue graduate studies — he
in biology, she in economics. She earned
a master’s degree in economics in 1954
and continued her studies at Michigan
until 1957, when the Teeterses moved to
Washington, where they both had secured
jobs. Mr. Teeters worked at the Interior
Department.” Along the way they raised
three children: Ann, James and John.
According to her official Fed biography, Teeters’s association with the Federal
Reserve began in 1957, when she joined the
Division of Research and Statistics at the
board of governors. She was a staff economist in the division’s government finance
section until early 1966, taking leave from
the Fed from 1962 to 1963 to serve as an
economist on the Council of Economic
Advisers for President John F. Kennedy.
Teeters then left her position at the
board completely to become a fiscal economist with the Planning and Analysis
staff of the Bureau of the Budget (which
became the Office of Management and
Budget), a role she held from 1966 to 1970.
She was a senior fellow at the Brookings Institution from 1970 to late 1973,
when she became a senior specialist with
the Congressional Research Service of
the Library of Congress. Her publications
include a series of studies, of which she
was co-author, for Brookings on topics
such as the US budget, Social Security
taxation and employment. With Charles
L. Schultze, Edward R. Fried and Alice M.
Rivlin, she co-authored the 1971, 1972 and
1973 editions of the budget analysis, “Setting National Priorities.”
From late 1974 until her appointment
to the Fed, Teeters was assistant staff
director and chief economist for the
34 FINANCIAL HISTORY | Fall 2016 | www.MoAF.org
Committee on the Budget of the House of
Representatives.
Not all of her initiatives were as clear-cut
as her opposition to high rates. Towards
the end of her time on the Fed board she
led an effort to decelerate the availability of
consumer credit, primarily as through the
use of credit cards. Teeters “struggled with
their questions and wound up saying that
life is both confused and unfair,” wrote
Times business columnist Leonard Silk.
Teeters was quoted in a 1984 story in
The Washington Post, “The perception
was that we told people to stop using the
credit cards. In fact, what we did was to
tell the credit card issuers to not let the
thing grow so fast.” Many Americans,
confused by the message, went so far as
to return their cards to retailers, Teeters
said, adding more broadly about her time
on the board, “It’s been fascinating and
engrossing, but I guess I’m not going to
miss it very much.”
After leaving the Fed board, Teeters
joined IBM as director of economics.
In March 1986, she became the second
woman to be named a vice president at
IBM. She supervised the preparation of
macroeconomic forecasting of US and
foreign economies, as well as micro-economic forecasting for the entire computer
industry. She retired from IBM in 1990
and the following year became an active
director of Inland Steel Industries for
several years.
It bears mentioning that alone among
US integrated steel companies, Inland had
survived as a going concern and was considered viable enough to be bought by an
off-shore company, Ispat International, in
1997. Today it is part of the world’s largest
steel company, ArcelorMittal.
Teeters was a member of the advisory
board of the Institute for the Study of
Educational Policy at Howard University.
She also was a member of the Committee
on the Status of Women at the American
Economic Association, a member of the
board for the American Finance Association and president and member of the
board of the National Economists Club.
Gregory DL Morris is an independent
business journalist, principal of Enterprise & Industry Historic Research (www
.enterpriseandindustry.com) and an active
member of the Museum’s editorial board.