Former Federal Reserve Chairman Paul Volcker is ending his term as chairman of President Barack Obama’s economic advisory panel next month.

File this under “Yet another missed opportunity by the Obama administration.”

The highly regarded Volcker was mostly ignored as a voice on financial policy to the White House. Further, the recovery advisory board seemed to be a neutered.

AP reports that Obama had given gave the advisory board a two-year mission, expiring next month. Whether the President extends it is unknown, but Volcker has told colleagues that he will not stay on . . .

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Source:
Volcker to Step Down as Panel Nears End of Term
CHRIS V. NICHOLSON
Dealbook, January 6, 2011
http://dealbook.nytimes.com/2011/01/06/volcker-to-step-down-as-panel-nears-end-of-term/

Category: Credit, Regulation

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30 Responses to “Volcker Resigns”

  1. jeff in indy says:

    probably got tired of talking to a wall…

  2. ByteMe says:

    A good soldier to the end. Didn’t go out in a petulant flame-out when no one listened to him. Perhaps someone will now call and talk to him about where the shovels are for digging ourselves out of this hole.

  3. Lugnut says:

    Did anyone in the administration notice? I can picture it probably being mentioned casually over a Chinese food working lunch in a conference room as one of the bullet points, and passing without comment. pass the Kung Pao…

  4. troubled times says:

    He was strong enough to resist Foxification. He did NJ proud .

  5. Jim Greeen says:

    Volker spoke truth to power and power won. Expected so much more from Obama. Expected him to listen to the wise, expected him to listen to someone who had no agenda other than getting out of the mess. Shame!! Expected so much more from the Prez, so much more

  6. cognos says:

    Nah, Volcker is actually a fame whore… he had no new ideas, few good ideas, but loved relishing in the limelight despite being far, far past his prime.

    It reeked and was sad. RIP.

  7. dawase says:

    He can go take a seat next to Powell – two guys that were too smart for the political process and got stabbed in the back for their patriotism.

  8. Super-Anon says:

    In my view Obama is already a failed president because he’s allowed another bubble to form.

    All the economic and financial turmoil we’ve had recently is due to bubbles and to allow the same thing to happen over again is grotesquely reprehensible.

    Volcker is smart to not be associated with this administration.

  9. Petey Wheatstraw says:

    cognos Says:

    “… he had no new ideas, few good ideas. . .”

    In monetary policy, within a purely fiat monetary regime, there are only a very limited set of real options from which to choose (expansion or contraction of the money supply/for the banks or against them). What set Volker apart was his willingness to choose the options that would return us to fiscal responsibility and the rule of law. No one is going to invent a new monetary system.

  10. Petey Wheatstraw says:

    Obama is a corporatist, even more so than Bush. We won’t be fooled again.

  11. DeDude says:

    He represented an important pull in the right direction, but if they didn’t listen to him then it made no difference for him to be there. Best hope now is that Obama will be smart enough to give the man a call every now and then to get a different opinion.

  12. Rescission says:

    Volker was brought in during a time of real instability. Looking back now, it appears to have been nothing more than a political stunt? Why bring him in if he gets no voice?

    Petey: I think you are right. BHO may be a bigger corporatist than GWB.

    Are there any potential leaders out there who understand real capitalism, free markets, and the importance of small business and entrepreneurs? If so, who are they?

  13. MikeinMass says:

    @dawase

    You cannot compare Volker with Powell.

    Powell knew the evidence he was presenting to the UN was made up. He should have resigned instead of carrying water for Cheney.

  14. Super-Anon says:

    “Obama is a corporatist, even more so than Bush. We won’t be fooled again.”

    I don’t think he wants to be. I think he just trapped himself by coming to the presidency as a political creature that views everything from the perspective of employment.

    Now he’s been forced to confront the reality that the only way to create employment in a bubble economy is with bubbles. The one true way out of a bubble economy — a depression — is something that’s politically inconceivable, so it’s predictable that he’s going to take the other route.

    If Obama had really understood the economy he would have done what Calvin Coolidge did in 1928 — not run for President!

  15. fatcatbanker says:

    Super-Anon I agree that BHO probably did not want to be a corporatist. However, I think his problem is that he was suckered in by his nightmare team (Bernanke, Summers, Geithner). BHO came into power in the middle of a full blow bank solvency crisis. The nightmare team probably convinced him it was a simple liquidity crisis, there was nothing to worry about and it would be over in short order. Then the economy would start improving.

    So, he moved onto healthcare instead of worrying about the economy. You could say he focused on the rhino in the room an ignored the elephant.

    Now he is stuck . . .

    Amazing how a few simple hiring mistakes can ruin a whole administration ! ! !

  16. Gatsby says:

    I guess he didn’t want to work for a White House run by J.P. MorganChase.
    I guess I should go way long on IYF.

  17. Yet another sad day for America. I fear this may not be the last. As a matter of fact. I know it won’t be the last sad day. The tears have not even begun to flow

  18. constantnormal says:

    There is no honor in standing by while one’s respectability is looted. He should have departed the month after he first tumbled to the fact that this was what was happening.

  19. AHodge says:

    volcker is a hero statesman and legend in my book
    among other things, he warned “you” in June 2008 that finance was “broken” and stage 2, the BIG One could be coming.( meaning more than the mild recession starting Dec 2007) helped make me some money.
    he ripped the banks in Dec 2008, at a level I and most others were not ready to at the time.

    as for the advisory, he did what he could, and at least got folks thinking about narrow banking.
    RIP careerwise after a lifetime of dedicated public service, i hope he still speaks up.

  20. Mannwich says:

    @constantnormal: I’m inclined to agree with you. Why stick around when it’s obvious he was being used. Unless he didn’t mind playing that role? One can never be too cynical these days.

  21. Mannwich says:

    His use in the theater that is politics has obviously ended for this act of the play.

  22. Cdale_dog says:

    Has Obama done anything right in the two years he has held
    office? I guess extending the Bush tax cuts, but that is about all
    I can think of….

  23. lalaland says:

    I’m with Cognos here… I think the promise of Volcker was simply different than the Volcker they got. His eponymous rule wouldn’t have been any kind of panacea even if it had been passed unamended or watered-down, it was widely viewed as an answer to the last crises rather than the next.

  24. louis says:

    Maybe he suggested a plan for underwater housing and then was forced to step down?

  25. jjay says:

    Here is a link to an article with a fresh perspective on Volcker’s reign as Fed Chief.
    And why the high interest rate trick can’t be done this time.
    Very interesting.
    http://www.safehaven.com/article/19560/the-real-reason-paul-volcker-wants-out

  26. james hogan says:

    I do not know Mr Volcker personally, but from what I can see in his appearances on TV he seems to be a good guy. He certainly has gotten some of the most positive press coverage around.

    Mr. Volcker, though, is from the old school–that is, he was brought up in an era when the value of money was tied directly to the amount of gold in the treasury. There are many others in this fold, some with names we’d all recognize.

    The problem is that the value of money (the unit of account) is not tied to the amount of gold held by the country that issued the currency. To be sure, it used to be this way. up until August 15, 1971 when Pres. Richard Nixon removed the gold backing from the US currency. From that day forward to this day, the value of the curency is exactly what someone will give you for it. It is not related to the value of gold or silver or copper or nickel or any other metal or commodity. It floats.

    Apparently this is a very difficult concept for the public to grasp, because politicians still make speeches promising to “balance the budget” (which in itself is a throwback to the gold era) and the public swoons whenever they hear this, as if a flock of angels had swooped down from the heavens to erase all their sins. A purifiying event, as if something good might come of it.

    But you know what? In every case in the history of the Unitd States, every time when the federal budget has been balanced, an economic contraction has always followed. Every time! The last time it happened was in 2000, at the end of the Clinton Administration.

    Why is that? It is because for the economy to grow there must be some means to represent the growth.

    Money has two features: It is a store of value and a medium of exchange. If the “value” increases, there must also be a means for the “medium of exchange” to also increase. Whenever the budget is “balanced” the “medium” is choked off, and has no way to make its way into the real economy, which then suffocates.

    New money, backed by real wealth, makes the economy grow.

  27. chris says:

    A good person. Now where is our next declining venue.When people are held accountable then and only then will we be taking a step in the right direction.When will the punishments be handed out for the mess es we are in?

  28. 1 currency now says:

    Oh, please. He’s been a Fed shill for 50 years.

    How can you fall for this good Fed chair/bad Fed chair routine. Wake up.

  29. canoles says:

    Volker should have given Obama $2 million in campaign contributions, then maybe he would have had more influence than Goldman SACKS-USA.

  30. oldbluejeans says:

    I’ll paraphrase a little, – - ok maybe a lot: Greenspahn in his book The Age of Turbulence, described Volker as a man who never really “fit in” in with the DC crowd. He refused to move his family to DC and lived instead in a small apartment in the area which was filled with empty pizza boxes and nearly smoked cigars. You gotta love this guy. While Obama and McCain failed to grasp the significance of what happened in the credit crisis, Volker, aside from having super sized “nads”, seemed to “get it”. Larry Summers left, ok so what. But now Volker? That’s a different story.

    Almost no one will agree with this, but there are some similarities here with Nixon / Ford / Carter era. Nixon couldn’t end the war, took us off the gold standard and laid the groundwork for inflation. Then Ford comes into office with his “whip inflation now” buttons, followed by Carter who found a big mess waiting for him. I hope Obama proves more adept than Carter, the jury is still out.