Paul Volcker actually gets to speak?

Hmm, maybe for a moment right now, President Obama is serious about a harder line on financial system reform than the Bobbsey Twins of Geithner and Summers have been. Paul Volcker doesn't go into too many details, but trumpets the general case for new regulation.

If Obama means it on bank reform, it's great

It's about time that President Obama listened more to Paul Volcker and less to Larry Summers and Tim Geithner, especially if it produces concrete results, at least from an administration point of view. (Congressional action, of course, is the sine qua non.)

And, if it took Scott Brown's election in Massachusetts to be the final push, then that's the silver lining of that cloud.

That said, while details of Obama's proposed bank regulation plan sound great, including attracting the initial interest of John McCain across the aisle, let's see how hard he fights for all of this.

Team Obama marginalizes Volcker

But really, is this a surprise? Former Fed head Paul Volcker wants to break up “too big to fail” banks, block commercial banks from derivatives and similar nuttery, and otherwise not fawn over Wall Street, unlike the Tim Geithner-Larry Summers et al A Team of Obama financiers.

That said, rather than continue on paper as an outside advisor to Obama, while actually doing it less, I wish Volcker would quit, go to the public, and beat the drums loudly for his proposals.

Volcker finally gets to see light of day

Former Federal Reserve Chairman Paul Volcker and the rest of the 16-member Economic Recovery Advisory Board of Obama’s finally got to be seen in public today, at the first of what are supposed to become quarterly meetings.

Of course, this probably only came about because of Volcker’s doing some political backchannel kvetching about how Obama economics czar Larry Summers kept kneecapping him.

In turn, as the WaPost notes, the vagueness of role of Volcker’s commission, and that of him as its head, has made it easy for Summers to shunt him aside. Add in Obama’s Bushian aversion to controversy and voila, Volcker is made into a back-bencher.

So, to see the light of day, he must have really bitched. Maybe he threatened to resign.

Summers stiffing Volcker and Geithner connections?

Yesterday, I blogged on the possibility that Treasury Secretary Tim Geithner’s TALF plan might be “all she wrote,” not only, or even primarily, because if he screws this up, Congress won’t give him another shot, but because he doesn’t plan another shot.

Paul Krugman touches on “risking trouble with Congress” angle, as part of his latest column, where he notes this is already the third time Geithner has floated warmed-over Paulsonism.

But, back to my original angle, taking Krugman a step further. Is Geithner simply deliberately regurgitating Paulson in different ways as “take it or leave it”?

I say yes.

More proof of that? The Paul Volcker-led Presidential Economic Recovery Advisory Board has yet to meet.

As Politico notes, this group was originally going to meet every few weeks. Then, it got shoved back to monthly. Then very few weeks. Now, it’s quarterly… but, we’re almost through the first quarter of this year!

And, if they’re meeting in private, it’s apparently in violation of federal open meetings law. (Not that that would surprise me; I think the Obama Administration is quickly proving to be almost as unsurprising in a mix of mendacity and hubris as BushCo was.)

That said, I’ll give you one guess as to who is stiffing the group; this time, his initials aren’t Tim Geithner; they’re Larry Summers.

On TALF itself, Krugman wraps up his latest column by saying Obama is “squandering his credibility.”

He’s lucky Bush was his predecessor, or he’d really look bad.

I thought this was what Volcker was for?

If President Obama has Paul Volcker already serving as an outside economic advisor (albeit one getting stiffed by Larry Summers) why does he now also need an Economic Recovery Advisory Board consisting of Volcker and others? Given the bipartisan nature of this board, with Reagan-era economic advisor Martin Feldstein and a few CEOs, it sounds like a Congressional lobbying group as much as anything.

When you’ve already been critiqued from a more liberal point of view for being tardy on taking charge, it seems to me that adding even more cooks to the broth is a risk proposition.

And given that “multiple cooks” seems as good an explanation as any for other Obama Administration screw-ups, like that of the nomination of Gen. Zinni as ambassador to Iraq, Team Obama needs to be careful.

The loophole in Obama’s executive pay cap

I figured it wouldn’t apply retroactively. I’d have liked that, but not a killer reason to beat Obama upside the head. But applying the pay cap in the future only to companies that get “extraordinary” federal bailout aid rather than everyday(?) bailout aid?

Big loophole.

Yeah, the Senate is going to look at tightening up both the retroactivity and tax deductibility of executive pay, which should be eliminated, not just restricted

Nonetheless, it’s another misstep by President Obama on the road to financial credibility with the American public.

Other loopholes there, too. Stock grants may be a way around the caps. Subjecting CEO pay in the future the nonbinding shareholder votes? Window dressing.

And, given that Larry Summers is already putting the bureaucratic squeeze on Paul Volcker, five bucks gives you a guess whose fingers are on that loophole, whether directly or via Summers’ little pocket weasel, Tim Geithner.

Volcker the mistake maker heads Obama's economic advisor team

Beyond another lawyer of bureaucracy, what does he bring?

Paul Volcker's cred rides on having nipped inflation in the bud as part of dealing with, and at the same time exacerbating, the 1980-82 recession.

In fact, he himself admits he could have handled it better. Between that fact, and the other fact, that the parameters and causes of our current situation aren't closely parallel to 1980, what exactly does Volcker bring to the table?

Or his cohort, Austen Goolsbee?

As for the bureaucracy levels, why do we need President's Economic Recovery Advisory Board on top of the National Economic Council, Council of Economic Advisors AND OMB?

Another sign of both neoliberalism AND Beltway-itis is the belief that there's no problem that can't be addressed by naming a new board or commission.

With an Obama cabinet like this, who needs McCain?

If the Times (London) is correct about a possible Barack Obama cabinet, he’s got more retreads and Republicans than Clinton ever did, and I have more reason than ever to vote Green.

John Kerry as Secretary of State? What, to bore al Qaeda to death?

Hagel getting the obligatory Republican post in a bipartisan, I’m sorry, “post-partisan,” cabinet as Secretary of Defense?

Larry Summers back at, rather than Henry Paulson, retained at, Treasury? Still another Goldman Sachs fox running the henhouse.

The only thing missing is Dick Gephardt as Secretary of Labor.

HuffPost has more on possible Treasury pics; besides the names mentioned elsewhere in this post and elsewhere on my blog, up comes Jon Corzine (money insider, neolib), Penny Pritzker from a commenter on the post (insider, crony capitalism).

Put another way, a somnolence-inducing cabinet like this is the best way in the world Obama could, right now, refute the "radicalism" charges.

If many people had seen this six months ago, the Dem primaries would have turned out differently. Another great argument for parliamentary government. (You could still keep some sort of American primary election process in the system.)

The only halfway good thing would be the idea of the 81-year-old Paul Volcker to run the bailout program, if he’s able.

Other than that, enjoy a glass or two of bitter Kool-Aid, Obamiacs.