Paul Volcker for Treasury Secretary

[Cronopio]

http://executivesuite.blogs.nytimes.com/2008/10/17/paul-volcker-for-treasury-secretary/

I do not know about you, but I was both surprised and pleased to hear during the presidential debate this week that the Democratic candidate, Barack Obama, was relying on the former Federal Reserve chairman Paul A. Volcker for advice during the financial crisis. I was surprised because I did not realize that Mr. Volcker, who had been an extremely nonpartisan Fed chairman before Alan Greenspan, did that sort of thing — roll up his sleeves in the middle of a heated campaign. I always had the sense that he preferred to be above the political fray.

And I was pleased because it means that there is at least a possibility that Mr. Obama, should he win, will name Mr. Volcker as his Treasury secretary. On his blog, my colleague Floyd Norris asked readers to send in their choices for the next Treasury secretary. Here at Executive Suite, the choice is obvious: Paul Volcker.

I will immediately acknowledge the key drawback: Mr. Volcker is 81. But this should not be an open-ended appointment. The new president should tell the country that he has pressed Mr. Volcker to return to government service because the country needed him and that as soon as the financial crisis was resolved, Mr. Volcker would return to private life. I am thinking a term of two years sounds about right.

In every other way, Mr. Volcker is the right choice. He has a deep understanding of the problems and would not need a steep learning curve. Indeed, I believe that the new president should name his Treasury secretary the day after the election, and have him and a small staff move into Treasury and immediately begin grappling with the issues alongside Henry M. Paulson Jr., the current Treasury secretary. In a recent interview with Larry Kudlow on CNBC, Mr. Paulson essentially promised that kind of cooperative transition. It is a pretty important thing to do. ...


I'm totally in agreement with this article. In his dissenting opinion against the first loosening of the Glass-Steagall Act provisions (as Fed Chairman) back in 1987, he predicted - to the letter - the financial meltdown that is happening now. He got our economy out of the stagflation trap of the early 80s, and seeing as stagflation is starting up again now Volcker is the best person to be at the helm.

This appointment can't wait till next week. If Obama hasn't appointed Volcker by mid-week at the latest he's making a big miscalculation.

[MNReformer]

1. Advice from Naomi Klein on what to do and who to support

http://www.opednews.com/articles/5/Naomi-Klein-Interivew-with-by-Rob-Kall-081026-271.html

Rob Kall: Barney Frank represents all the bankers and all the investors in Connecticut. He’s doing his job. They’re his constituents, unfortunately for the rest of us.

Klein: Well, for the few weeks until the election, politicians can’t afford to ignore their other constituents. You know, and it gets harder after an election. And another point that I want to make to Obama supporters out there, which is: You know, he is saying some really important things out there on the campaign trail about this really being a referendum on an ideology, the ideology of deregulation and trickle-down economics, and that’s exactly the right message. What worries me is that he’s taking top-level economic advice from Bob Rubin and Larry Summers, both of whom are responsible, along with Alan Greenspan and Phil Gramm, for the disaster that we are living through right now. And I say that, you know, directly responsible. These are the people who refused to regulate derivatives, who fought off all attempts and sage advice saying that they should do so. There was a fantastic piece in the New York Times recently reexamining Alan Greenspan’s legacy. I’m sure you saw it, right? But what was really remarkable about that piece is that the two other people that really share the responsibility were Robert Rubin and Larry Summers. And what we know about Robert Rubin is that when he was at Goldman Sachs and after Bill Clinton won the election in 1992, he started having meetings with Clinton. This is after the election, but before inauguration. And, in that key period, he convinced Clinton that he should abandon many of his promises from the campaign trail and embrace economic austerity. Okay? We need to get Rubin away from Obama. He should be as much of a political liability…

Kall: Who is…?

Klein: …as Reverend Wright. Because he is one of the people who created this disaster.

Kall: Who should Obama be listening to? Who are the good guys?

Klein: Who are the good guys? Well, Joseph Stiglitz is a good guy. And he is listening to Joseph Stiglitz. But, you know what? What we need to understand, right, is that he’s going to be picking his Treasury Secretary, he’s going to be picking his Trade Representative, he’s going to be deciding who’s going to replace Neel Kashkari and we need to make sure that it isn’t Rubin’s protégé, Jason Furman, who Obama appointed as an Economic Advisor, who is a believer in Rubinomics, and thinks Wal-Mart is great for poor people. It should be people like Stiglitz, it should be people like Paul Krugman, Dean Baker, Gerard Bernstein, and, you know, if he really believes that this is about abandoning these policies of deregulation, he needs to get away from Bob Rubin and Larry Summers.

Kall: How bad would things be, I mean…

Klein: I think one of the things people should say at this point to Obama, is that the next Treasury Secretary shouldn’t come from Wall Street.

Klein: Well, we tell Obama that we agree with what he’s saying, but that we understand the game he’s playing. Okay? When he says this is the end of the ethos of trickle-down economics and deregulation and then he has his picture taken next to Bob Rubin and Larry Summers and Paul Voelker. You know what he’s doing? He’s winking at Wall Street. And he’s saying, “Don’t’ listen to what I’m saying to get elected, there’s going to be economic continuity, as the economists call it. And, you know, this is the game. Right?

[Cronopio]

2. I agree with Naomi about Rubin and Summers. It's bad news if either is appointed.

But she's wrong in implicating Volcker as being an promoter of trickle-down economics. She might be assuming that because Reagan reappointed him as Fed Chairman in 1983. As I recall, Volcker didn't concern himself with the debate one way or the other.

[MNReformer]

3. Actually, I am very torn about Summers.

I can't figure out if he is for or against deregulation. It seems to me he was advocating against it when he was on Clinton's President's Working Group--I read his comments to the joint committee and he was essentially saying Gramm's legislation could not be passed without the necessary oversight and a clearinghouse. It seemed to me from my research that Greenspan was the real culprit along with Gramm. And if anyone should have understood that Gramm was slipping the presumed "dead" Commodities Futures Modernization Act of 2000 (creating the Enron loophole and deregulated credit default swaps) in as an "amendment" to that appropriations bill it would have been him. So, did Clinton not know? Did Summers know and play dumb--or did Gramm just get away with it while Clinton's administration was "weakened" from the impeachment? Gramm slipping it in RIGHT after the SCOTUS decided to "select" Bush. Rubin says he is to blame for "giving into it"--Gramm had a ton of Enron lobbyists working Congress...Who to believe?

[MNReformer]

4. This article from Op-Ed news the answers....

Lawrence Summers played a key role in lobbying Congress for the repeal of the Glass Steagall Act. His timely appointment by President Clinton in 1999 as Treasury Secretary spearheaded the adoption of the Financial Services Modernization Act in November 1999. Upon completing his mandate at the helm of the US Treasury, he became president of Harvard University (2001- 2006).

Paul Volker was chairman of the Federal Reserve Board in the l980s during the Reagan era. He played a central role in implementing the first stage of financial deregulation, which was conducive to mass bankruptcies, mergers and acquisitions, leading up to the 1987 financial crisis.

Timothy Geithner is CEO of the Federal Reserve Bank of New York, which is the most powerful private financial institution in America. He was also a former Clinton administration Treasury official. He has worked for Kissinger Associates and has also held a senior position at the IMF. The FRBNY plays a behind the scenes role in shaping financial policy. Geithner acts on behalf of powerful financiers, who are behind the FRBNY. He is also a member of the Council on Foreign Relations (CFR)

Jon Corzine is currently governor of New Jersey, former CEO of Goldman Sachs.

Summers, Geithner, Corzine, Volker, Fischer, Phil Gramm, Bernanke, Hank Paulson, Rubin, not to mention Alan Greenspan, al al. are buddies; they play golf together; they have links to the Council on Foreign Relations and the Bilderberg; they act concurrently in accordance with the interests of Wall Street; they meet behind closed doors; they are on the same wave length; they are Democrats and Republicans.

While they may disagree on some issues, they are firmly committed to the Washington-Wall Street Consensus. They are utterly ruthless in their management of economic and financial processes. Their actions are profit driven. Outside of their narrow interest in the "efficiency" of "markets", they have little concern for "living human beings". How are people's lives affected by the deadly gamut of macro-economic and financial reforms, which is spearheading entire sectors of economic activity into bankruptcy.

http://www.opednews.com/maxwrite/linkframe.php?linkid=75062

Are we all being had?