"Our Children and Grandchildren are not merely statistics towards which we can be indifferent" JFK

Thursday, January 6, 2011

Paul Volcker, the Final "Grandchild Friendly" White House Economic Member Resigns

Truly a sad tome for grandchildren everywhere as Paul (Grandpa Bear) Volcker has turned in his resignation to President Obama. The departure of Christina Romer and Larry Summers put a slight skip in Vigilant Grandpa's size 13's however it was short lived. Word on the street is Gene Sperling (aide to Geithner) is a top contender to replace Larry Summer.

Of course, Mr. Sperling completed the required one year of obligatory employment with Goldman Sachs in order to develop economic policy that is truly in the best interest of Main Street grandchildren.

A resignation announcement by Geithner and Bernanke would once again afford hope for grandchildren everywhere and put a skip back in Vigilant Grandpa's size 13's.

By Caren Bohan and Alister Bull
(Reuters) - Former Federal Reserve Chairman Paul Volcker plans to leave his role as head of a panel of experts advising President Barack Obama on the economy, sources familiar with the decision said on Wednesday.

The departure of Volcker, 83, from the President's Economic Recovery Advisory Board is among a series of changes Obama is planning to announce soon.

The decision to leave the board was Volcker's. A source close to him said he was ready to continue to advise Obama on an informal basis as often as the president would like.

Volcker became a legendary figure on Wall Street when as Fed chief he broke the back of double-digit U.S. inflation in the early 1980s by sharply raising interest rates.

He began advising Obama during his 2008 presidential campaign and has wielded clout on issues ranging from financial regulation to fiscal policy.

Unique among people who offer economic counsel to Obama from the outside, Volcker has a direct line to the president and does not need to go through the White House economic team to schedule a meeting or a phone call.

But there have been moments of awkwardness for him. Volcker frequently delivers speeches to policy and business audiences, and it has been frustrating for him that when he comments publicly on issues like a value-added tax, his presidential advisory board role has sometimes led people to mistakenly assume he is speaking on behalf of the White House.

The White House declined to comment on Volcker's exit. The formal announcement of Volcker's departure is likely to come on Friday when Obama will unveil a number of other changes to his economic team.

The former central banker was the driving force behind the "Volcker Rule," a provision in last year's financial reform bill that puts limits on proprietary trading by U.S. banks.

Many on Wall Street vigorously fought the Volcker Rule and some sought to portray Volcker as out of touch with the modern financial system. But he has also received credit for reining in financial industry excesses that helped prompt the global economic crisis.

"My feeling is job well done," said Thomas Russo, a partner in Gardner Russo & Gardner, a Pennsylvania investment manager with assets under management of $2.38 billion.

"He was a voice of reason as he addressed excesses that inevitably develop in Wall Street conduct when the guardrails are taken down from the financial superhighway."

Obama also plans to make an announcement on a replacement for Larry Summers, who stepped down as director of the National Economic Council to return to his role on the faculty of Harvard University. Read complete article

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