I think the word about Paul Volcker being marginalized in the Obama administration is getting around. That is the good news. Whether anything is going to change is a whole different story. I saw something about Volcker being marginalized on MSNBC yesterday morning, so, it is definitely getting some play. The question to ask now is, can President Obama get Volcker on a one on one and hear for himself what needs to be done to correct the problem that hangs over all of our heads - Too Big To Fail!!!
Summers and Geithner must go is the other piece of this puzzle. They are between President Obama and Volcker. This stuff, as I have written in the past, is not rocket surgery. Letting commercial banks have a casino within the holding company is just not smart. Who would build a factory with volatile explosives and then run flames through the walls? It does not take a genius to realize that at some point the flames will ignite the explosives. Commercial banking and investment banking should be separated again, AND, they should go back to being partnerships, and that means no publicly traded equity securities.
Too Big To Fail will continue to be a problem, AND, this problem will, in my opinion, hold back the economic recovery. The issues about the credit rating agencies is another problem, but that is a separate issue from the banks. President Obama can not know everything, that is why he has advisers. Let us hope he talks to the right ones about the issue of Too Big To Fail.
Stay tuned.
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2 comments:
I figured he'd been marginalized almost immediately after the election when Obama appoined the Young Turks to handle his financial policies. He was never given as much Press as the others.
To me, it looked as though Obama used Volcker and his name to get elected, and then dumped him in favor of two younger pups. I don't see Obama's entourage as favoring Senior Citizens. I get the impression he (or his handlers) want him to be surrounded by younger people.
Correct me if I'm wrong, please!
Summer
Everything you wrote may well be right on the money. Who knows from our distance to The White House what is really going on inside. Volcker has a minor position in the Obama administration, and he is definitely being kept away from the press and the TV. He is the man who knows too much. He is also the man that has done the work as Chairman of the Fed. He is not some professor who writes books about the economy.
Geithner is in over his head, in my opinion. I can only judge him by what I see and others write about him. Summers is another story. Summers has ties to Wall Street and he has eaten their steaks and drank their wine. He is also a former Treasury Secretary, so he has weight. Wall Street does not want to go backwards, and they will spend and do everything in their power to maintain the status quo. They need Summers to accomplish this. Too Big To Fail may be more significant to our economic survival than the Cold War. Some might think I lost my mind to say that. I believe, as a student of history, that empires rot from the inside before they fall.
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