Volker, Summers Tangled In a Power Struggle

Feb. 5 (Bloomberg) -- Paul Volcker has grown increasingly frustrated over delays in setting up the economic advisory group President Barack Obama picked the former Federal Reserve chairman to lead, people familiar with the matter said.

Volcker, 81, blames Obama's National Economic Council Director Lawrence Summers for slowing down the effort to organize the panel of outside advisers, the people said. Summers isn't regularly inviting Volcker to White House meetings and hasn't shown interest in collaborating on policy or sharing potential solutions to the economic crisis, they said.

Read the whole story here.

Comments

[leftLibertarian]

Summers can't even balance his own checkbook. Just get rid of this thief.

[forpeace]

*

I never trusted Summers ......... I don't know why Obama picked him?!

But still I trust Obama's judgement.

*

[Roll451]

Between the two, I trust Summers more. Volcker was the man single handedly responsible for the 1982 recession by rigid application of Milton Friedman's theories on monetary policy, pushing interest rates well into double digits - a phenomenon that never happened before that era and has not happened since.

[joebhed]

pretty amazing.
Is this from curveball?

With OPEC-Vietnam inflation running 12 percent, you think maybe two percent interest rates would have helped? Given our insane debt-money system?
I fail to see any connection to Friedman's monetary policies.
Which I support.

As for Larry Summers, he is Friedman's hell-or-high-water free-market economic policies on steroids.
Which I oppose.

Larry Summers will without doubt prove a well-deserved embarrassment to the Obama regime.

[Raster]

Sounds like a clash of stupendous egos.

[themodernleader]

I am amazed that Obama has surrounded himself with such incompetentl and potentially dangerous characters who believe that the way to national salvation is the domination of one group over the rest of society. The recommendations that he receives will reflect the domination of banking over all other issues. If he follows them this country is going the way of all organizations controlled by cliques.

[Dayahka]

Volker should have been either Treasury Sec or Chairman of Economic Advisers, though I suppose his age may have had something to do with it. Not being an economist, though it is debatable whether there are any economists who know anything anywhere, I suppose a president has to rely on reputation to make his selections, but Summers was a particularly bad one, given that he was the one who made a terrible recommendation and had Clinton loosen the regulatory strings on banks and he's a failed president of Harvard. Summers should be fired and Volker or someone like Ron Paul put in his place. When there's no faith or trust in the ones selected to restore faith and trust in failed institutions, you've really got it bad, and Summers is just bad news all around.

[Raster]

Right you are! Economists are like consultants who borrow your watch to tell you the time.

[zizyphus]

Can we stop referring to them as "czars"? We don't need any more czars, thank you. We are becoming like Russia fast enough as it is.

[Ergon]

Volcker, who enforced the sell out of Russian assets to Mafia oligarchs who smuggled the money out to Swiss and UK banks? He and Summers would rip off the economy here too.
I'm sure there are decent, honest people out there.

[harriscrl3]

I'm rooting for Volker win.

Carol

[truthynesslover]

In case nobody noticed the guy who figuterd out the murdoff scandel wasnt ivy league and figured out the scam in 4 hours.Lets start having real smart people in the government in place of some of these ivy league tools.

[yorkie]

I THOUGHT THERE WOULD BE SOME SPARING THAT WOULD GO ON,, THIS SOON ON SHOWS SOMETHING'S GOT TO GIVE AND BE WORKED OUT TO LIMIT ANY PROLONGED DISPUTES .....IF ANY ONE NEEDS TO GO IF THINGS ARE NOT WORKED OUT IS SUMMERS,,, VOLKER, THOUGH OLDER, IS MUCH WISER,,,AND HAS THE BROADER VISION AND EXPERIENCE WE NEED.... I ALSO CALL UPON O AND TEAM TO BRING IN ECONOMIST JAMES GALBRAITH.......ALSO GET BILL BRADLEY AND GARY HART IN AS SOME SORT OF ADVISORY ROLES ON A NUMBER OF FRONTS,,,,

[HamletsMill]

I agree. If Summers is a religious man he had better get down on his knees and start praying. If these guys cannot get a solid, well thought out game plan in action they risk being shredded by events.

Everyone who has studied this situation knows there are AT LEAST eight different financial bubbles in the world and events outside the United States could take us down like the Vienna Creditanstalt financial chain reaction nuclear event in 1931. It could start in China. It could start in Europe. So these boys had better get the offense out there on the field. NOW. If they fail to get the right strategy by infighting and not looking at EVERY idea from both the Keynesian and Austrian Schools history will make them marked men. Robert Rubin too. They will be hated in all of human history if they get this wrong. Do they understand this? Summers and Rubin were two of the authors of the road that led to the Credit Default Swaps nuclear financial AIDS castastrophe.

[SZM]

Summers is trouble. This is the first indication of problems on the way. I never believed Summers could handle working in this White House. He seems annoyed by questions, as in his appearance on "Meet the Press" recently, which contradicts the demeanor needed to do his job.

[HamletsMill]

My exact thought when I saw him too. Another pompous, imperious, broomstickified Ivy League ideologue. All Ivy League Universities teach Keynesian Economics. They are so sure of themselves. As an Ivy League graduate myself I agree that they should start with a Keynesian solution as my first gut read. But I am very wary of my education. What if it doesn't work? Can they think on their feet outside the box? We are completely in the unknown in this insane crisis. Ideologues are not the best people to hang around with in the unknown. Without openness they may completely miss the insight. They may need some "scramble right, scramble left, get open" as Roethlisberger lived the play in the Super Bowl. Are these guys open to look at every idea out there? I have a sinking feeling. I really do.

[Ladyrantsalot]

There is a journalistic myth that Summers was run out of Harvard by a lefty cabal of women and minorities. He did antagonize women and minorities, but that is not why he was run out. I have some friends on the faculty there (all white, middle class males) who tell me that Summers was run out because he was a petty, obnoxious tyrant. He undermined some of his best deans, telling them one thing, then pulling the rug out from under them. For some reason, he felt compelled to undermine their effectiveness (probably because the faculty admired them). He was self-indulgent, disrespectful, and utterly convinced that he was the smartest man in the room, even if he wasn't. He is not an effective administrator. Being a smart economist does not equal being a good leader.

[Rule Of Law]

And he's not even all that smart an economist. This is a guy, who along with Rubin, Greenspan and Geithner helped to put together the free market deregulations that have created this Depression. None of them have stepped up and said, we blew it. Now, with your background on him, I understand why.

[Ladyrantsalot]

I do think he's smart, but he is not wise.

[HamletsMill]

I agree. But I thought it was Chicago street smart brilliant on Obama's part to send he people that created the CDO's, CDS's, MBS's, etc, etc. financial nuclear weapons derivatives out to defuse them first. If they get vaporized when one goes off, too bad. Send their wives and children out next. It makes for good suspense. Then after they are all a glowing cloud of fine dust, get some radical economic thinkers with a better game. If it gets bad enough this might be a TOTAL re-think of the Federal Reserve System AAND the fractional reserve banking system all together. By June of this year it is going to be 1932 with real social unrest in the streets. Mark my words. I honestly now think on my first read that Summers will be right out of a MacGruber skit on SNL. But the next wave of economists may do better. President Obama may be brilliantly setting these fools up. Summers, Geithner, and Rubin all look like people with zero street smarts in life. So far I say Volker is worth keeping around for some ideas.

http://www.hilarious.net/the-complete-macgruber-snl-video-collection/

[kit02138]

Ladyrantsalot is totally right. Summers was an embarrassing president at Harvard. He did some good things like curb grade inflation and challenge people to defend their ideas - but he did that mostly by attacking them, not by leading and teaching. And when he attacked it was truly low and reckless. He has zero skills in diplomacy. "petty obnoxious tyrant" couldn't describe it better. His economics skills and recalcitrance could actually be useful in fighting through the challenges of the economic crisis. But politically he is a huge liablitly.

[EducatedObserver]

On paper, the idea of a president having several high-powered advisors is a good one. This can be a recipe for disaster however, if the egos of the advisors are equal to their talent.

It appears that Mr Obama in assembling his administration, has placed high value on co-opting the best brains. What also is apparent, is that he might have given insufficient consideration to the human aspect of the mix.

It is my view that the two most important departments of government - financial and foreign affairs - are dangerously top-heavy. Already there are rumblings of discord in the financial team. It remains to be seen how the potentially toxic combination of Hillary Clinton, Joe Biden and Susan Rice (not to mention the unpredictable Samantha Power) will ever be able to avoid open warfare.

Put in another way: "Too many cooks.........................."

[quantumspin]

A little research will show what Summers is about, see links and excerpts below:

CAMBRIDGE -- The president of Harvard University, Lawrence H. Summers, sparked an uproar at an academic conference Friday when he said that innate differences between men and women might be one reason fewer women succeed in science and math careers.

http://www.boston.com/news/local/articles/2005/01/17/summers_remarks_on_women_draw_fire/

And he said while chief economist at the World Bank that Africa was 'underpolluted' and so it made business sense to send more dirty industries to Africa, memo below (must read):

http://www.counterpunch.org/summers.html