Tuesday, January 26, 2010

Flashback: Meridian on Volcker

9/21/2009 - "I do not support Bernanke for Federal Reserve Chairman, maybe we should bring back Volcker!"

10/22/2009 - I posted an article featuring Paul Volcker and his reform policies, basically endorsing them

12/11/2009 - "It feels ironic to me that Paul Volcker is once again the voice of reason and sanity and yet he seems to be ignored in favor of Bernanke, Geithner, Dodd and Frank. Will it be the irony of ironies that the window dressing (Volcker) is in fact the one person in this administration that people should be listening too? I'm not saying we should rename Volcker to the Fed, but certainly getting rid of Geithner and replacing Bernanke would be wise moves."

I've been behind Paul Volcker since he started his campaign, its nice to see Obama finally listening to the one person in his administration that makes sense. While it would shake up markets in the short term and make a lot of people on Wall Street very unhappy I think that Obama's next move should be to ask Bernanke and Geithner to resign. He should use his bully pulpit to help fix the financial system (his bank tax is a populist ploy that I disagree with), this will give him the breathing room he needs to run for re-election. This should have been his first order of business.

I also think we've got to stop acting as if Wall Street was solely to blame for the crisis, it wasn't. What has really made people mad is the manner in which Wall Street and the banks have acted since the bailouts - with arrogance and hubris. We have to realize the problems were much greater than Wall Street - it encompassed our government and the Federal Reserve (the fourth branch). Wall Street certainly played its role, but didn't we all? It seems to me that the taxi driver earning $30,000 a year knew that he could not afford an $800,000 home, but signed on the dotted line anyway.

As I stated, Volcker's plans are a first step and we need to debate the issues and make the appropriate changes. I hardly believe that Obama was listening to me telling him to listen to Volcker (who seemed out in the wilderness for awhile), but I'm glad somebody finally got him to listen to the one voice of reason in his administration.

Scott Dauenhauer CFP, MSFP, AIF