As part of its claim that it would assemble and use the best talent available to get America out of its current economic slump, the Obama Administration proudly and frequently featured the presence of former Federal Reserve Chairman Paul Volcker as part of Obama’s economic team. Giving Volcker a role in the Administration, Obama promised to use the former Chairman’s experience to bring gravitas to the policymaking process and to ensure the creation and implementation of policies designed to promote economic wealth.
Trouble is, Volcker has barely been used as a resource:
The one-time central banker has been put in charge of a presidential advisory board that hasn’t yet had a formal meeting. It has been nearly a month since he has seen Mr. Obama. Mr. Volcker hasn’t been a main player in key decisions handling the global financial crisis.
Treasury Secretary Timothy Geithner unveiled the administration’s plans for handling troubled financial institutions and the housing crisis without seeking input from Mr. Volcker, associates say. “Paul was surprised” at the failure to consult him, particularly on issues of financial rescue after his dominant role in resolving financial crises in the 1980s, says one person who has spoken to Mr. Volcker recently.
On the eve of one announcement, a Wall Street executive ran into Mr. Volcker at a cocktail party and asked what he expected from the Treasury secretary’s imminent announcement. “I have no idea what Tim’s going to say,” he responded, according to somebody there.
What is responsible for this failure to make more use of Volcker’s standing, experience, and ideas? Well, to be sure, “[t]he whole organizational side of this has been a nightmare,” as the former Chairman says of the efforts to get him more involved. This ought to worry us; Obama Administration operations are clearly not running on all cylinders and the degree to which there is a lack of organization and discipline in efforts to coordinate amongst the Administration’s economic policymakers will surely have a a negative impact on the formulation and implementation of policy itself.
But I am also concerned that the effort to sideline Volcker stems from ideological disagreements as well. Consider the following passage from the story:
Mr. Volcker’s advice hasn’t always been heeded. The former Fed chairman urged the administration to “slow down” its push for regulatory changes. “Paul thought it was important to take enough time to fill holes in the regulatory framework and not get caught up in the current atmosphere,” says former Securities and Exchange Commission Chairman William Donaldson, who’s on the Volcker panel.
Are the regulation fetishists isolating Volcker because they don’t like his views on the subject? Are they, as a consequence, dominating any and all policy discussions and the crafting of options to present to the President by ensuring that no one who dissents from the hyper-regulatory framework the fetishists seek to put in place gets heard in the Oval Office? If so, how is Barack Obama any different from his caricature of George W. Bush, who was condemned for not hearing more than one side of the story and who supposedly only wanted to hear his own views reflected back to him?
As Jennifer Rubin puts it:
So if [the Obama Administration] asked [Volcker] now for advice he might suggest they not rove around the economy threatening to seize businesses or that they stop spending so much. No reason to ask if you don’t want to hear the answer.
And Barry Ritholtz is scathing:
To review: You have access to the greatest Fed chief in history, and you are choosing not to use him during the greatest crisis since the Great Depression.
I wonder what White House aide is too insecure to let the big dog loose . . .
Who says that it just has to be an aide? It could be the President himself.