Thursday, October 22, 2009

Paul Volcker Silenced; Larry the Bozo and Clueless Timmy Dominate

The New York Times today came out with a story verifying what we at The Firecracker Report had highlighted earlier, that the administration has effectively silenced Paul Volcker. In our report titled “Paul Volcker: Obama does NOT listen to my advice anymore” we had pointed out that Obama merely used Volcker as a pawn to win the election and has now shoved him in the corner cabinet.
According to the New York Times reporter Louis Uchitelle, the situation is so bad that Paul Volcker rarely ever shows up in D.C, instead choosing to operate via telephone out of his New York office. Asked if he had been sidelined, Volcker replied “I did not have influence to start with.”
The Obama administration’s banking reform is just hogwash aimed at placating the public. The very choice of Larry Summers and Tim Geithner to head critical government functions, speaks volumes of the administrations disingenuity towards change. If they wanted real banking reform they would heed to Volcker. Here is a list of crucial reforms that Volcker backs as highlighted in the NYT’s article:
1. Restore the Glass- Steagall Act that separated commercial and investment banking: “Commercial banks would take deposits, manage the nation’s payments system, make standard loans and even trade securities for their customers — BUT not for themselves. Being separated from banks, the investment houses would no longer have access to federally insured deposits to finance this trading”.
2. “Before the credit crisis, the big institutions earned most of their profits from proprietary trading, and those profits led to giant bonuses. Splitting commercial and investment banking would put a damper on both pay and risky trading practices”.
Heeding to Volcker would be real banking reform that we could believe in.

1 comment:

Anonymous said...

can you please update the public and the readership on the Glass Steagll Act sometime. That would be good.