Paul Volcker is a great American. Appointed by Jimmy Carter to be the Federal Reserve Chairman in 1979, he served two four year terms ending in 1987 (succeeded by Alan Greenspan). Volcker broke the back of the great inflation of the 1970s (which peaked at 14 percent in August of 1979) and ushered in (helped by Reagan's tax cuts) the greatest wealth increase in a single country in human history. Today's Dow Jones average of 10,000 seems a long, long way from the August 1981 reading of 780. The 1980s and 1990s were great years for the United States and Paul Volcker is one of the folks to thank for those great years.
These days Volcker is an economic adviser to Barrack Obama, who listens to no one, apparently. Obama certainly does not listen to Volcker. Volcker is calling for the breakup of the very largest commercial banks and a return to Glass-Stegall (which would divorce commercial banking from investment banking). Volcker does not like the "too big to fail" concept and would prefer to eliminate "bigness" rather than over-regulate the financial sector. Obama prefers massive new regulation, which will simply shift financial leadership to Asia and relegate the US to the financial backwaters of the modern world. Volcker sees the problem.
While not in agreement with Volcker's recommendations, I have to admit my admiration for this great man and his ability to point to the real issues. No one else in the Obama White House seems to believe in anything but bigger government, higher taxes, and an endorsement of a permanently stagnant US economy. Three cheers for Paul Volcker.
