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Tuesday, October 21, 2008


volcker and obama

as party-first republican factions go off the deep end in their commentary, warning of some shade of global disaster if sarah palin isn't -- not is, but isn't -- made vice-president, observant republicans whose doors are still attached to their hinges should pay attention to the large role that former federal reserve chairman paul volcker is playing in the obama campaign. in the (very republican) journal via barry ritholtz:

... [G]oing into the campaign's final weeks, aides say Sen. Obama is increasingly relying on Mr. Volcker. His staff now routinely reviews policy proposals and speeches with Mr. Volcker. Conference calls and face-to-face meetings of the Obama economic team are often reorganized to accommodate his schedule. When the team discusses the financial crisis, "The most important question to Obama: What does Paul Volcker think?" says Jason Furman, the campaign's economic-policy director."

i can think of few american economic minds i would rather have in the driver's seat than saint paul. in sharp contrast to economic idiots like vice president cheney (who unfortunately represents in his ignorance much of the supposedly-economically-literate republican establishment), he understands america's vulnerability to foreign financing. he understands that america must get consumption back into line with production, however painful. if the fed is to be imbued with greater power to oversee and regulate financial markets, volcker is the person who should be at the forefront of restructuring it. if we are going to be nationalizing most of the money center banks, volcker should be advising on how it will be done.

if thoughtful conservatives needed yet another excellent reason to abandon the ridiculous and reckless republican ticket (indeed party, as the whole mechanism is now best suited for the forced reform of the political wilderness) this season, this is it. propaganda histrionics from degenerate rags like the national review notwithstanding, a prominent role for volcker opens the possibility that the obama administration will run a more constructive and intelligent economic and fiscal policy than any since the 1950s -- which is admittedly not a high hurdle, but is desperately needed in light of the disaster which has been fomenting in presidency after presidency since the election of ronald reagan, if not well before.

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hot damn. another beauty, gm. the first positive hope i've felt in a while.

hard times call for hard measures. volcker's got the right cojones where so many others fail.

if you haven't seen it - check this piece out (via yves at NC):

holy krap - and thanks.

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Reagan? Too late: the rot started with LBJ's extravagance and Nixon's decision to accommmodate it.

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that's a fair assertion, dm -- debt really started out on its path of deviance and, ultimately, destructiveness in the late 1960s. it wasn't until reagan that policies went in place to encourage private indebtedness, foster financialization, reduce limits on capital and increase taxes on labor -- serving to skew income distribution in this country far to the top of the pyramid and fuel the fire of debt accumulation.

both parties are culpable -- this certainly isn't about political blame. but it's this skew of wealth that must be undone for the good of the stability of our society. if we address it, private indebtedness will i suspect come off of its own accord.

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Taxes on labo(u)r strike me as daft: in the US couldn't you shift the tax burden fron labo(u) r to gasoline? Preferably 30 years ago.

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