Yes We Can? Paul Volcker's Not So Sure

Charlie Rose interviews Paul Volcker, longtime former chairman of the Federal Reserve and currently the chairman of the Economic Recovery Advisory Board. Volcker talks bluntly about fixing the broken financial system, compensation on Wall Street, the future of the American economy, and the Obama administration’s performance so far. Volcker is particularly pessimistic about getting things done in Washington: “The American political process is about as broken as the financial system.” [%comments]


DaveyNC

The financial system is broken because the political system is broken. And vice versa. MAD attains; Mutually Assured Destruction.

frankenduf

he was close- change "broken" to "corrupt" and you have the accurate diagnosis

juanita

That's what we got for 30 years of corrupt Reaganism and deregulation. And I don't know if we can do much about it at this late date. We allowed fascist corporatism and crony capitalism to run our lives. Like vampires, they battened down on us and sucked the lifeblood out of this nation. We are almost out of blood now, and too weak to fight back. The time to successfully fight was long ago, but too many people let flag-waving, fundamentalist religion, and wannabe-ism blind them to what was really going on. We are just circling the drain now.

tom

From the Article:

Some agency will go in there and say, "You're going to fail,
but we're going to provide a more orderly exit."
=========
Exactly!

Mike

Volcker is wrong. The American political system is MORE broken than the financial system. And nothing seems to be changing.

gerald chasin

Put very simply, there is a huge financial incentive built into the government which causes members of Congress and the President, and other government officials to put the needs of immensely wealthy and therefore also powerful interests ahead of the interests of the American people. It takes a strong will and a matryr like mentality to oppose these interests. These interests can break the career of the most competent, intelligent and energetic people without any problem. Or, if they are pleased, they can reward you with financial rewards and possibly also fame and your name in the history books to a degree beyond the imagination of themost competent, intelligent and imaginative/hard working people. A real question right now is whether the president would like to be a multimillionaire many times over and be extremely well respected by the media and historians, or would he be content to be a force for revitalizing this country, and indeed the world in a much more modest manner, ala Al Gore.

Read more...

Matthew

The most important line from the interview was "let them fail."

Without the possibility of losing everything invested no disincentive exists for the banks to take risks. Long Term Capital Management should have been allowed to fail and so should every other bank that forgets that sound lending requires solid underwriting on underlying assets of value and to people who aren't stretched to make their payments from the first payment.

DaveyNC

@gerald chasin

I don't think ol' Al is as altruistic as you think. He's making plenty of coin these days. And I'm not sure that I've ever seen the word "modest" in the same sentence with the name "Al Gore".

Ruth

"So I did a bit of research to confirm and get the latest information on something that's been known for some time. As reported by a CBS Political Hotsheet, in turn referring to an Open Secrets report on the wealth status of members of Congress, 44 percent of members of Congress are millionaires. Some of the other 56 percent aren't far off the mark. And this is based on information that does not include all of the legislators' assets. Considering that about one percent of Americans are millionaires, the discrepancy is overwhelming and foreboding. Why? It pretty much means that to be elected, a person must have money and have access to money. That leaves a lot of highly qualified people out in the cold, eligible to serve in theory, but in practice shut out of the political landscape."
-- From http://mauledagain.blogspot.com/2010_01_01_archive.html#475259359161946068

mashaziva

So lets pass a law offering our senators $1M a year in salary with 2 provisos: They are barred for working for any company, institution or any entity that does work for the government and/or benefits from government legislation (basically they can teach) and that they are limited to 2 6 year terms. Walking out of DC with $12M in the bank will free them from looking to turn a buck after leaving office.

Lee, Naturalized since Y2K

Lets put this in a different perspective:
As bad as the US government seems to be, what are the alternatives? 4~5 other government systems in this world would be comparable to US in both physical landmass and population:

People's Republic of China
Russia
Canada
India?
Brazil?

Anyone care to trade for their government system?

I think the US government is performing poorly but "pass performance does not predict future outcomes." Thus as long as people still want to live under this system, we will find a way.