Historical Echoes: Not‑So‑Classical Opera Explains Interest Rates

Amy Farber, New York Fed Research Library

As the FOMC continues to shape its communication strategy, perhaps it should consider opera. On August 6, 1979, Paul A. Volcker became chairman of the Federal Reserve Board, and shortly afterward a very short opera was broadcast attempting to explain to the general public the pros and cons of raising interest rates. The opera (11 min.) was masterminded by Robert Krulwich, a creative broadcast journalist who’s still going strong using radio to explain complex scientific and economic concepts to the layman. Although the broadcast is very comical, it isn’t comic opera!

    The introduction to the broadcast reminds us that in the early 1980s, “Volcker comes to the Fed at a time when there is intense pressure from two different groups for changes in interest rates; one group wants them down, the other group wants them up even higher. Both sides are powerful and important to our economy.”

    The opera is called Rato Interesso, and Acts One and Two very closely resemble Mozart’s Don Giovanni. We’re told that the broadcast comes to us “live from the Palazzo Verdi.” The British commentator hilariously sounds like Terry-Thomas, and there’s a recurring theme of the desirability of wall-to-wall carpeting (definitely historical).

    In Act One, we have Angelina, a prospective wall-to-wall-carpet purchaser, and Perugino, the carpet salesman, complaining that interest rates are too high, preventing her from purchasing the carpet and him from selling it. He sings “The Businessman’s Lament.” In Act Two, we have an international businessman, Luigi, very concerned about the strength of the dollar. He sings an aria that contains the famous “Ha ha ha ha” sequence in which he cannot control himself from laughing at how deplorably low interest rates are if one is concerned for the dollar.

    In Act Three, everyone journeys to Washington, D.C., to speak with Chairman Volcker (the chairman also has a role in the opera, the words pulled from his inaugural speech). “Ladies and gentlemen, we are face to face with economic difficulties really unique in our experience,” he says. There’s also commentary from the president of the Brookings Institution, who observes that the Fed is “walking a narrow path.”

    And speaking of interesting rats, you might also enjoy Krulwich’s “Heating up with Mice” broadcast, which explains what it means for the market to heat up or cool down and features market-loving mice.

Disclaimer
The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.

Amy Farber is a research librarian in the Research Services Function of the New York Fed’s Research and Statistics Group.