Paul Volcker, perhaps the most highly respected chair in the history of the Federal Reserve, recently delivered a tremendous address at the Economic Club of New York.
For anybody who cares about the well-being of our markets, our economy and our nation, I strongly recommend you take a mere 10 minutes to fully read and absorb the wisdom of Volcker's words. What are some of the highlights? Volcker targets the Fed in stating:
There is something else beyond the necessary mechanics and timely action that is at stake. The credibility of the Federal Reserve, its commitment to maintain price stability and its ability to stand up against pressing and partisan political pressures is critical."
Independence can't just be a slogan. In the last analysis, independence rests on perceptions of high competence, of unquestioned integrity, of broad competence, of non-conflicted judgment and the will to act.
That's what I'm talking about!
Volcker maintains that the Fed's primary focus must be on price stability and the defense of our currency, and not be charged or asked to do too much. Little doubt he sends this warning shot given the ineptitude of those on the fiscal side of the equation
to get their/our house in order.
He launches another volley in addressing the captured regulatory cesspool in which we are drowning. He asserts:
The simple fact is the United States doesn't need six financial regulatory agencies. It is a recipe for indecision, neglect and stalemate, adding up to ineffectiveness. The time has come for change.
As things stand today, I am told that can't happen and won't happen. However powerful the arguments for action, the vested interest — within the agencies, in the Congress and outside — are just too strong.
I ask you, can we let that view stand unchallenged?
He saves his best for last:
The erosion of confidence and trust in the financial world, in the financial authorities that oversee it, and in Government generally is palpable. That can't be healthy for markets generally or for the regulatory community. It surely can't be healthy for the world's greatest democracy, now challenged in its role of political and economic leadership.
What is Volcker doing in an attempt to clean up the cesspool that defines the Wall Street-Washington incest? He has launched The Volcker Alliance
While the names of Larry Summers and Janet Yellen are bandied about as the next head of the Federal Reserve, we need to embrace the work and wisdom of Paul Volcker if we care to save our nation.
Please take the few minutes to read his delivery, Central Banking at a Crossroad
, and then share any comments you have below.