Why Is Paul Volcker Still A Member Of The Obama Administration?

by Pejman Yousefzadeh on May 21, 2009

His continued presence there is quite confusing:

Former Federal Reserve Chairman Paul Volcker can’t get enough respect.

As he convened the first meeting of the president’s economic recovery board with the president himself in attendance, the Washington Post offered a front page story alleging Volcker is unsure of the panel’s influence and unhappy at having to defer to other members of Obama’s economic team.

After the meeting, one of the president’s advisors cut short a question and answer session before Volcker could offer the concluding statement he’d planned. The slight was unintended and Volcker had already spoken and answered questions. But it seemed to illustrate one of the problems of the president’s high powered “team of rivals.”

Volcker was a prominent advisor during Obama’s campaign and months before the board was actually created then President-Elect Obama announced Volcker would chair it. The 81-year-old Volcker is praised for helping tame inflation in the late 1970′s and early 1980′s, and President Obama chose him to lead the advisory group in part to reassure the financial community that he’d be getting advice from someone who is respected by Republicans and Democrats. Volcker was appointed to the Fed by President Jimmy Carter, in 1979, and reappointed by President Ronald Reagan in 1983.

Volcker is said to resent having to defer to Treasury Secretary Timothy Geithner and Larry Summers, the head of the National Economic Council, on how to best overhaul the financial system.

I can’t pretend to know what Volcker is thinking, but it seems to me that he was just meant to be a famous figure in the Administration, with no real responsibilities or power of his own. If I were treated the way he is being treated, I would either demand responsibilities commensurate with my position and experience, or resign.

Instead, Volcker appears to be willing to stick around and play second fiddle to just about every other player on the economic policy front, while seeing himself marginalized on a daily basis. I can’t believe he gets any satisfaction out of this. I know the country certainly doesn’t get any value added with this arrangement in force.

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