R.E.S.P.E.C.T. - Has the Former Fed Chair been getting enough?Former Federal Reserve Chairman Paul Volcker can't get enough respect. As he convened the first meeting of the President's Economic Recovery Advisory Board with the President himself in attendance, the Washington Post offered a front page story alleging Volcker is unsure of the panel's influence and unhappy at having to defer to other members of Mr. Obama's economic team.
After the meeting, one of the President's advisors cut short a question and answer session before Volcker could offer the concluding statement he'd planned. The slight was unintended and Volcker had already spoken and answered questions, but it seemed to illustrate one of the problems of the President's high powered "team of rivals."
Volcker was a prominent advisor during Mr. Obama's campaign and months before the board was actually created then President-Elect Obama announced Volcker would chair it. The 81 year old Volcker is praised for taming inflation in the late 1970's and early 1980's, and President Obama chose him to lead the advisory group in part to reassure the financial community that he'd be getting advice from someone who is respected by Republicans and Democrats. Volcker was appointed to the Fed by Jimmy Carter, in 1979, and reappointed by Ronald Reagan in 1983.
Volcker is said to resent having to defer to Treasury Secretary Timothy Geithner and Larry Summers, the head of the National Economic Council, on how to best overhaul the financial system. In addition, Christina Romer, the head of the Council of Economic Advisors and Austan Goulsbee, a member of the council, have a more public role, than Volcker, in promoting the administration's economic policies. Other reports say Geithner and Summers are rivals themselves, with Summers choosing a cramped office in the West Wing, in part because it gives him better access to the Oval Office.
White House officials say Volcker's advisory group, which includes CEOs, labor officials and prominent economists, was created to offer an "outside the beltway perspective" on how to deal with the financial crisis. Volcker told the Wall Street Journal, last month, organizing it has "been a nightmare." Goolsbee, who is also staff director of Volcker's advisory board, says the group had a rough start, but is now very influential. On this day the group focused on how best to create "clean energy jobs" to help end the recession and avoid the continued rise in unemployment that typically extends for a year after a recession is over.
The White House released a statement from Volcker saying his team is hard at work, and that he looks forward "to working with President Obama and his economic leadership in the months ahead." Still, the Washington Post story had reporters looking for friction and the end of the Q&A session seemed to provide it. Volcker said after Goolsbee ended the session "You're not going to let me make my concluding comment?" Goolsbee tried to turn the group back to the microphones saying "Oh, you had a concluding comment. Wait, wait, wait." "Nah," Volcker said, "it's okay."