June 25 (Bloomberg) -- The salad was made with the first green shoots from the White House garden. The main course was roast beef. The topic of conversation in the second-story Family Dining Room on a warm evening in April: President Barack Obama’s economic policies.
Obama sat at the head of the table, administration insiders arrayed along one side to his right. To his left, facing a French marble fireplace, were some of his harshest critics: Nobel laureates Joseph Stiglitz and Paul Krugman, Harvard University professor Kenneth Rogoff and former Federal Reserve Vice Chairman Alan Blinder.
One chair on the insiders’ side was empty, according to attendees. It was reserved for Paul Volcker, the 81-year-old former chairman of the Fed, who was an adviser to Obama during the campaign and now heads the President’s Economic Recovery Advisory Board, or PERAB. He was stuck at the White House gate, trying to convince guards that he was expected for dinner. His plane from New York had been delayed by a storm, and his security clearance to enter the building that day had expired.
That Volcker’s seat was on the same side of the table as Treasury Secretary Timothy Geithner’s and National Economic Council (NEC) Director Lawrence Summers’s was a clear sign he’s one of the president’s most valued advisers. That he was stuck outside suggested his role is ambiguous. While he doesn’t have a full-time job, isn’t paid for his advice and lives in New York, the 6-foot-7-inch (2.01-meter) Volcker is hard to ignore.
Volcker, who eventually made his way to the dinner table the evening of April 27, earned a reputation for standing up to Wall Street in the 1980s when, as Fed chairman, he brought inflation down to 1 percent from 15 percent by pushing the fed funds rate up to 20 percent. Now, he’s urging radical regulatory reforms that would limit how big banks can get, separate deposit taking from trading at financial institutions and force all derivatives trading onto public exchanges. His proposals go beyond what Geithner, Summers and other members of the Obama administration have advocated.
Volcker should resign
I wrote here a while ago that Volcker should and will resign because Obama will just not listen to him. Obama is a socialist or a fascist but definitely not a libertarian or free-market advocate. Obama wants more power in the hands of the government and the Fed when Volcker has been pushing for the opposite. Obama is handing trillions of dollars to failed private corporations and banks taking it from the US citizens and their children and their grand children... Please read the previous posts about Volker and see what I have already predicted a while ago.