Paul Volcker: How Obama Is Tuning Out The Former Fed Chairman

nytimes.com:

Listen to a top economist in the Obama administration describe Paul A. Volcker, the former Federal Reserve chairman who endorsed Mr. Obama early in his election campaign and who stood by his side during the financial crisis.

Read the whole story: nytimes.com

Comments

[DSciarrino]

Volker is exactly right. Why would the President, as smart as he is, go along with Geithner and the big banks? Geithner might be pretty smart, but I woudn't allow him to carry Paul Volker's bags to the airport. He's not in the same league. . . If nothing else, I'd like to see congressional hearings on the subject, with or without the President's consent. Even Alan Greenspan would probably come on board. . .

[Persson4]

Again this is the good ol boys financial club. But this time they are trying to put out to pasture the older gen. who might know that idealism is ruinous to business. The idea that government is bad for business has been replaced with government is good for business. We now loan money to corrupt banks and since they owe us money why would we regulate their ability to pay us back. Summers, Geithner, Rubin want naysayers quieted. Brooksely Born didn't play ball with the boys and Volcker's calling them opportunists. Summers, Geithner and Rubin are the most financially powerful men in the world. Who would give that up.

[sixx]

If Volcker is being shut out, who is Obama listening to? If you watched PBS' Frontline on Tuesday, you certainly don't want Greenspan, Rubin, or Summers to have the President's ear. On the show titled 'Warning' these three Freemarketeers shut down a young lady who was trying to stop the coming economic collapse, caused by unregulated derivatives. Greenspan went so far as to tell her that fraud shouldn't be treated as a crime. A fourth marketeer, Arthur Levitt has since turned and apologized to Ms Borne and the nation. Unfortunately Summers and Rubin have not, and will probably strike again if allowed.

[themodernleader]

This young ,brilliant economic team , I am assured, knows too much to let some old absolete relic of another time tell them anything old or new. These guys are the offspring of the University of Chicago school of supply siders, the friends of the emerging banking oligarchs, the husbandry of the leisure rich of the gilded age and New York-London elite. They have transfixed the youthful President with dream works of oppulence and power. They have shielded his acute and sensitive intellect from the unrealistic, illusionary needs of the masses. After all, they will be awright with more training, diplomas and government welfare positions.
For the rest of us we are going to make a bundle the old fashion way---steal it.

[mcmchugh99]

Having a nationalized, public service banking sector is a very good idea, as is a national investment bank, and as soon as Wall Street crashes again we may well see something like that.

[nomadicexpat]

so nationalized banking sector, national investment bank, national health care and national auto industry?

anything else? im sure we need a national media, right? true fair and balance and all that

what about food industry? nationalize?

[treat2day]

LMFAO

Gave them all jobs they expected and by this time next year, ALL WILL BE GONE.

Therefore, Mr. President you gave them a chance to make their souls right for the past thieves of taxpayer money.

[milty]

Have not heard anything from Warren lately. Has he given up on BO?

[treat2day]

Obama call him out on his self interest against reform. OOPS

[darkflite]

Why should anybody be surprised? Of course Obama tunes old Paul out when all he listens to are Fat Larry and Vulgar Imp. I think Obama is tuning a lot of good advice from tried and true veterans on both sides of the aisle because he listen way to much to Summers and Emmanuel.

[JSquercia]

Let's not forget Robert Rubin as prime mover in the inner circle . Dear God Volker has made the best proposal .return to Glass Steagal which worked for 50 years . When it was done away with
it took less than a decade to bring the economy to the brink .

[rememberthepoor]

Since it is unlikely that commercial banking will be separated from investment banking in these behemouths, and is creating a frustrating losing battle for all, it is time to take a lesson from North Dakota. Publically-owned banking helped them escape the wall street meltdown. They have a low unemployment rate and a state surplus of 1.3 billion dollars this year. Publically owned banking gave competition back in Ben Franklin's day, and will work today.

[brit prof]

Volker is hardly making a radical point: How many people reading this have all their savings in high-risk / high return investments? None I'd imagine. Sure, you can have an "aggressive" part of your portfolio but you don't bet the farm in a 100-1 shot.
Banks MUST do likewise.

[T Pol]

My ONE big reservation about Obama was his advisers were all big banker/big Wall Street. (I supported him, though, because McCain would have been no different, and he and the Kook Girl would have been a destructive force indeed.)

Volcker is a voice of reason. Robert Reich is another voice of reason. Heard him speak, and he was dead-on 20 years ago!

Just my opinion, but Obama needs to listen to those who don't have a horse in the race. My "hope" is fading as I watch him try to work with the very people he ran against! There is a limit to conciliatory actions ... at some point, they become appeasement. Another pol I know did this...wor­ked the same base, and now that he is in, he is allowing the same old people to run the show doing the same things he campaigned against.

Time to redirect and go back to the values as promised.

[lifeagain]

One of the principal reasons why this whole thing happened is because the Glass-Steagal Act was removed. Volcker is right and Obama is making a BIG MISTAKE for refusing.

[eweqo]

obama refuses to listen to other points of view. It's his way or the highway. If the path veers form marxism, he's not interested.

[Kache]

Woops! Wrong door pal. Lalaland is 3 doors down the hall on your right.

[mick7191]

You are so full of it.

[Kache]

Volker wants to break banks up vertically and Greenspan wants to break them up horizontally. Either, or both, would work - if we want to make American banks small enough to drown in the bath tub. But do we?

China's two largest banks could buy America's top ten banks tomorrow with a hostile take over. And they are not alone. Considering their current values, Softbank could swallow Bank of America with no more than a burp. Of course we would never allow that. But! Consider that 1/2 of the world's lithium is in one deposit in Bolivia. Do you really want our banks to be too small to get in on the financing for that deposit's development? Well, it's already happend, China Commercial & Industrial Bank got the job. There are literally dozens of similar situations coming up just in Green investments.

We aren't in Kansas no more, Dorthey.

[research]

oh great new Spin!

Now we need giant banks for national security! LOL

You just gave us a great reason for nationalizing the FED and having the democracy directly control the money supply. With full transparency and assuming we take back our democracy by outlawing contributions as the bribes they are.

[xlntcat]

It is a rational argument. Ignoring China's vulnerablity as well as our own blinded everyone to the depth and severity of the pending collapse. We aren't the biggest dog in town anymore. Given our education statistics that were released yesterday indicating that our fourth graders have fallen behind third world nations in math, we are hardly the brightest dog in the pack, either.

[thnk4selfagain]

What's the point if TBTFs tank the economy, not only taking us out of the running globally but bringing this country to its knees permanently. What you are proposing is a lose-lose situation. The TBTFs are not insulating nor empowering us, they are de-stabilizing a great country and world leader.

Rather, we should have a restore trust and responsibility as Volcker and Stiglitz suggest, invest in ourselves and yes, engage in pro-America protectionist policies (as all others do). Otherwise as you imply, we can't compete.

[Kache]

My point is, looking in the rear view mirror for solutions is just fine, if we're backing up. We are not backing up. We need to look to the future for solutions, not to the past. We certainly cannot continue as though nothing happened and I agree with Volker and Greenspan that mere regulations are not the answer. But slamming the gears in reverse is just going to strip out the transmission and we could find ourselves upside down in the corn field.

Greenspan made the observation the other day that breaking up Standard oil a hundred years ago was, at the time, a radical and bold break with the past. He then suggested we break up the banks the same way. No! What we need is a solution that is a radical and bold break with the past, not a repeat of something that worked one hundred years ago in a different environment.

I don't know what we do need. I just know that the answers are not behind us. We need bold new thinking and we're not getting it. For example, now that we - the taxpayers - own Citi and AIG why don't we just keep them? Why shouldn't they be OUR public option in the banking and insurance worlds? If a public option would be so valuable in health insurance (and it would) then why are we so anxious to unload ourselves of GM now that it's ours?

We need a Sojourner Truth moment. (Wiki her)

[T Pol]

You'd be surprised the number of modern solutions to be found in the past. Notice, for example, that governments and private enterprise are flocking to Traditional Neighborhood Design -- the fact that our neighborhoods were laid out for good community living in the past, before all the "modern" way of life dictated by the car and resulting in planet-killing sprawl.

I know a local politician who's famous for defending everything with that "rear view mirror" analogy as he justifies spending a city into bankruptcy to keep up with areas that have 3 times the family median income.

There's nothing "rear view" about advocating that we not throw the money for the mortgage on the craps table, which is EXACTLY what's been done with commercial banking, personal accounts and pensions.

What Volker is advocating isn't a look backward. That, my friend, is what is known as "common sense."

[jade7243]

(Part two)

MORE FROM THE ARTICLE

""For his part, Mr. Volcker is careful to explain that he supports 80 percent of the administration’s detailed plan for financial regulation, including much higher capital requirements and “guidelines” on pay. Wall Street compensation, he said in a recent television interview, “has gotten grotesquely large.”

[...snip..­.]

"His disagreement with the Obama people on whether to restore some version of Glass-Steagall appears to have contributed to published reports that his influence in the administration is fading and that he is rarely if ever in the small Washington office assigned to him.

He operates from his own offices in New York, communicating with administration officials and other members of the advisory board mainly by telephone. (He does not use e-mail, although his support staff does.) He travels infrequently to Washington, he says, and when he does, the visits are too short to bother with the office. The advisory board has been asked to study, amid other issues, the tax law on corporate profits earned overseas, hardly a headline concern."
----------­----------­------

Seems to me all this whining about "listen to Volcker" is misplaced.

Are you reading, listening and thinking for yourselves or just parroting what you think the Bloggerati want you to say.