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G. William Miller, former Fed chief

WASHINGTON -- G. William Miller, a former Federal Reserve chairman who as Treasury secretary during the Carter administration directed the Chrysler Corp. bailout but could not beat back inflation, died Friday night at his home. He was 81.

Mr. Miller had suffered from a lung ailment, said Michael H. Cardozo, managing director of Mr. Miller's Washington-based merchant banking firm and a White House counsel for President Carter.

Carter plucked Mr. Miller from the business world in 1978 to replace Arthur F. Burns as chairman of the Federal Reserve Board. The following year, Carter named Mr. Miller to replace the dismissed W. Michael Blumenthal as treasury secretary, making Mr. Miller the only person to have guided both the nation's central bank and the Treasury Department.

Mr. Miller was considered ineffectual as Fed chairman, serving one of the shortest tenures in Fed history, and he received mixed reviews as Treasury secretary as inflation ran rampant in the late 1970s.

While a capable manager of the Treasury Department and the administration's point of view on economic matters, he was not seen as a policy innovator nor as a potent force against double-digit inflation.

Mr. Miller, who supervised the Chrysler Corp. Loan Guarantee Board while serving as Treasury secretary, oversaw the $1.5 billion loan guarantee begun in 1980 that kept the automaker afloat. At first, he opposed providing more than $750 million in assistance, but Carter and Congress approved the deal despite fears that the government would be left to pay off private lenders if Chrysler slipped into bankruptcy.

Chrysler recovered financially in the early 1980s and paid off its debts seven years earlier than expected.

When Carter named him to the Fed, Mr. Miller was the chairman and chief executive officer of Textron Inc., a corporate conglomerate that registered $2.6 billion in sales the year before he joined the Federal Reserve.

The appointment -- Mr. Miller would become Fed chairman on March 8, 1978 -- drew praise from the business world, where he was known as a successful executive, and caution from those who questioned his expertise in monetary policy. He had been a director of the Federal Reserve Bank in Boston.

High oil prices, a weak bond market and a falling dollar fueled an economic crisis in 1979, and inflation approached an annual rate of 12 percent. Carter, his reelection in peril, shook up his Cabinet and, at the same time, sought to replace Mr. Miller at the Fed with someone more aggressive.

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