When Obama won the Presidential election in 2008, he soon after appointed Paul Volcker, former Federal Reserve Chairman, as his Chairman of the Economic Recovery Board. Volcker is a heavyweight, and well remembered for his tough handling of the dollar crisis of the late 1970s. He was able to raise interest rates to fight inflation.
Soon after becoming Obama's Chairman of the Economic Recovery Board, he was marginalized by Timothy Geithner and Larry Summers. From Bloomberg, 2009:
Paul Volcker has grown increasingly frustrated over delays in setting up the economic advisory group President Barack Obama picked the former Federal Reserve chairman to lead, people familiar with the matter said.
Volcker, 81, blames Obama’s National Economic Council Director Lawrence Summers for slowing down the effort to organize the panel of outside advisers, the people said. Summers isn’t regularly inviting Volcker to White House meetings and hasn’t shown interest in collaborating on policy or sharing potential solutions to the economic crisis, they said.
“I wish somebody would give me some shred of evidence linking financial innovation with a benefit to the economy.”
Mr. Volcker’s favorite financial innovation of the past 25 years? The ATM. “It really helps people, it’s useful.”
In addition, he railed against financial system compensation plans and said it had grown too large.
His idea of reform? A return of something like Glass-Steagall. Commercial banks should be tightly regulated as well as protected. Trading, speculation and financial innovation should live outside those companies so that if they fail, they fail.
While many resist this idea, Mr. Volcker had few doubts. “I’m not alone in this and I think I’m probably going to win in the end.”
Unfortunately, it doesn't look like Volcker's views prevailed. So now, Obama has appointed someone else to replace a sidelined Volcker. Introducing:
This is Jeffrey Immelt, former CEO of General Electric. A Captain of Industry. So whhat are his accomplishments?
Here are some headlines:
How a Loophole Benefits GE in Bank Rescue Industrial Giant Becomes Top Recipient in Debt-Guarantee Program
GE is quiet bailout recipient
You see, GE is not just a manufacturer of light bulbs and jet engines. It also owns GE Capital - which was an over-leveraged, speculative, sub-prime lending, derivative cranking financial piece of garbage of a "bank" that needed taxpayer money to survive.
And this guy is going to help the average American unemployed worker?