Archive for the ‘Volcker’ Category

Obama Economy Advisor Was Against Stimulus? ABC News Chases Into Details

February 6, 2009

The chairman of President Obama’s Presidential Economic Recovery Advisory Board, Paul Volcker, is an official of a think-tank that recently assailed the stimulus package making its way through Congress for introducing too many long-term spending measures.

Jake Tapper
ABC News

Volcker is one of 31 individuals listed as being “directors” of the Committee for a Responsible Federal Budget.

Last week the president of the Committee, Maya MacGuineas, called “troubling” the number of spending programs in the stimulus bill that are “really intended to be permanent new policies rather than temporary items to help boost the economy. While we need deficit spending now, extending our borrowing beyond the economic downturn will make our already-dismal fiscal picture far, far worse. The economy simply can’t handle that.”

The Committee cited as examples the$70 billion “Making Work Pay” Tax Credit, $15 billion in education funding for Pell Grants, Head Start, and Child Care Development, and $14 billion in new health insurance subsidies for unemployed workers enrolled in COBRA.

“The American Recovery and Reinvestment Act is beginning to look remarkably similar to the Obama campaign’s tax and education plans,” remarked MacGuineas. “Many of these items may be worthwhile, but an emergency measure is the wrong way to push through permanent changes to the budget. If politicians want to enact long-term spending or tax policies, they should be enacted through the normal legislative process. And they should be paid for with offsetting tax or spending changes, just as President Obama committed to when he proposed the policies in the first place.”

Neither the White House nor the Committee responded to questions about the matter.

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White House Economic Advisors in Disarray

February 5, 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.

While Summers, a former Treasury secretary, oversees the official White House economic policy apparatus, Obama tapped Volcker for a new Economic Recovery Advisory Board charged with injecting fresh, outside ideas into policy debates.

“When you have two strong, highly accomplished, driven people, it’s not unusual that there is going to be a battle over turf,” said James Cox, a professor at Duke University Law School in Durham, North Carolina. “I would hope that Obama doesn’t lose Volcker’s counsel. They need someone to help them think outside the box.”

By Robert Schmidt and Julianna Goldman Bloomberg News

The contretemps shows the difficulties Volcker, perhaps the world’s most respected economist, may encounter as an outside adviser charged with providing policy alternatives to the president, said William Silber, a finance professor at New York University’s business school.

Outsider’s Disadvantage

Volcker “is not in the White House and he doesn’t have a bureaucracy to command,” Silber said. “It puts him at a disadvantage.”

Former US Federal Reserve Bank Chairman Paul Volker listens ...
Volker  REUTERS/Brian Snyder

After testifying at a congressional hearing yesterday, Volcker declined to respond to questions. His office said he doesn’t grant interviews.

Summers, in an interview, played down any conflict.

“Paul’s got a kind of experience that no one else has, and the president enormously values his advice,” said Summers, 54. “I think this board is going to be very useful, because it’s very easy sitting here to kind of lose sight of what’s happening on the front lines of the economy.”

Obama named Volcker on Nov. 26 to head the new panel, saying he wanted an outside voice to keep administration policy planning from becoming “too insular.”

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The “Real” Obama: How Centrist?

December 12, 2008

Barack Obama has garnered praise from center to right — and has highly irritated the left — with the centrism of his major appointments. Because Obama’s own beliefs remain largely opaque, his appointments have led to the conclusion that he intends to govern from the center.

Obama the centrist? I’m not so sure. Take the foreign policy team: Hillary Clinton, James Jones and Bush holdover Robert Gates. As centrist as you can get. But the choice was far less ideological than practical. Obama has no intention of being a foreign policy president. Unlike, say, Nixon or Reagan, he does not have aspirations abroad. He simply wants quiet on his eastern and western fronts so that he can proceed with what he really cares about — his domestic agenda.

 Charles Krauthammer
The Washington Post
Friday, December 12, 2008; Page A27

Similarly his senior economic team, the brilliant trio of Tim Geithner, Larry Summers and Paul Volcker: centrist, experienced and mainstream. But their principal task is to stabilize the financial system, a highly pragmatic task in which Obama has no particular ideological stake.
A functioning financial system is a necessary condition for a successful Obama presidency. As in foreign policy, Obama wants experts and veterans to manage and pacify universes in which he has little experience and less personal commitment. Their job is to keep credit flowing and the world at bay so that Obama can address his real ambition: to effect a domestic transformation as grand and ambitious as Franklin Roosevelt’s.

As Obama revealingly said just last week, “This painful crisis also provides us with an opportunity to transform our economy to improve the lives of ordinary people.” Transformation is his mission. Crisis provides the opportunity. The election provides him the power.

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Obama’ Disappointment Appointments: Not the Change We Thought You Said

December 7, 2008

The more things change, the more they stay . . . well, you know. And looking at President-elect Barack Obama‘s top appointments, it’s easy to wonder whether convention has triumphed over change — and centrists over progressives.

By David Corn, Washington Post

A quick run-down: Sen. Hillary Rodham Clinton, who supported the Iraq war until she initiated her presidential bid, has been handed the Cabinet’s big plum: secretary of state. And Bush’s second defense secretary, Robert Gates, will become Obama’s first defense secretary. The Obama foreign policy adviser regarded as the most liberal in his inner circle, Susan E. Rice, has been picked for the U.N. ambassador slot. Obama is elevating this job to Cabinet rank, but he’s still sending Rice to New York — and in politics and policy, proximity to power matters. For national security adviser, Obama has picked James L. Jones. The retired four-star general was not hawkish on the Iraq war and seems to be a non-ideologue who possesses the right experience for the job. But he probably would have ended up in a McCain administration, and his selection has not heartened progressives.

President-elect Barack Obama takes questions from reporters ...

Above: Hardly a new model roll out.  President-elect Barack Obama takes questions from reporters during a news conference in Chicago, Monday, Dec. 1, 2008, with, from left to right: Attorney General-designate Eric Holder; Homeland Security Secretary-designate Janet Napolitano; Defense Secretary Robert Gates; Vice President-elect Joe Biden; Secretary of State-designate Sen. Hillary Rodham Clinton, D-N.Y.; National Security Adviser-designate Ret. Marine Gen. James Jones; and United Nations Ambassador-designate Susan Rice.(AP Photo/Charles Dharapak)

Obama’s economic team isn’t particularly liberal, either. Lawrence H. Summers, who as President Bill Clinton’s Treasury secretary opposed regulating the new-fangled financial instruments that greased the way to the subprime meltdown, will chair Obama’s National Economic Council. To head Treasury, Obama has tapped Timothy F. Geithner, the president of the New York Federal Reserve, who helped oversee the financial system as it collapsed. Each is close to Robert Rubin, another former Clinton Treasury secretary, a director of bailed-out Citigroup and a poster boy for both the corporate wing of the Democratic Party and discredited Big Finance. Obama’s Economic Recovery Advisory Board will be guided by Paul Volcker, the former Fed chairman whose controversial tight-money policies ended the stagflation crisis of the 1970s but led to a nasty recession. (A genuinely progressive economist, Jared Bernstein, will receive a less prominent White House job: chief economic adviser to Vice President Joe Biden.)
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