Obama Dissed, Volcker Speaks Out Against Bankers Gone Wild

If anything about the financial crisis made you beet-red angry, then you must read Simon Johnson. Johnson is a former chief economist for the International Monetary Fund who wrote one of the best pieces on the financial crisis in print, the Quiet Coup. This week he urges people to pass on the message of Paul Volcker, former head of the Fed Reserve (before Greenspan), and now the head of Obama’s Economic Recovery Advisory Board.

Obama met this week with the heads of the major banks in an attempt to discuss regulation and the return of stability to the financial system. Guess who decided to attend the meeting with the President of the Free World only by phone? If you guessed Lloyd C. Blankfein, the chief executive of Goldman Sachs; John J. Mack, chairman of Morgan Stanley; and Richard D. Parsons, chairman of Citigroup you got it right. (Thanks guys, cause that shows how much you appreciated the use of all our taxpayer dollars!!)

The meeting continued with discussions about executive compensation, regulation, and making more loans available to small business. From the NY Times:

…the banks are seeking to restore executive pay to high levels and asserting that the government’s demand that they hold bigger financial buffers against possible losses makes it hard for them to issue more loans. During the hourlong meeting in the Roosevelt Room of the White House, Mr. Obama prodded the executives to stop fighting the regulation legislation intended to deal with the problems that led to the financial crisis”

Paul Volcker was one of the few outspoken critics of the unprecedented response by the Federal Reserve in the financial crisis. Far oversimplified, he did not agree that it was a good idea to bail out failing banks at all.

After President Obama’s meeting with the top banking executives, Volcker had this to say (emphasis added):

Every day I hear financial leaders saying that they are necessary and desirable, they are wonderful and they are God’s work. Has there been one financial leader to stand out and say that maybe this is excessive and that maybe we should get together privately to think about some restraint?
I hear about these wonderful innovations in the financial markets, and they sure as hell need a lot of innovation. I can tell you of two—credit-default swaps and collateralized debt obligations—which took us right to the brink of disaster. Were they wonderful innovations that we want to create more of? [...] Wake up, gentlemen. I can only say that your response is inadequate. I wish that somebody would give me some shred of neutral evidence about the relationship between financial innovation recently and the growth of the economy, just one shred of information.

Paul Volcker and Simon Johnson for the win.

Possibly Related Posts:

  • Share/Bookmark
December 17, 2009 | Filed Under Economy 

Comments

9 Responses to “Obama Dissed, Volcker Speaks Out Against Bankers Gone Wild”

  1. Lawanna Sannella on December 3rd, 2011 10:35 am

    Normally I do not learn article on blogs, but I would like to say that this write-up very compelled me to check out and do so! Your writing taste has been amazed me. Thanks, quite great post.

  2. the waltons episode guide on December 3rd, 2011 12:06 pm

    Write more, thats all I have to say. Literally, it seems as though you relied on the video to make your point. You obviously know what youre talking about, why waste your intelligence on just posting videos to your blog when you could be giving us something informative to read?

  3. uggs soldes on December 6th, 2011 1:43 am

    LED TVs have much better contrast and color as compared to traditional LCDs::

  4. 176.31.50.72:80:dragondani:quepaso27 on December 6th, 2011 2:50 am

    Keep functioning ,fantastic job!

  5. womens uggs on December 6th, 2011 5:07 am

    This website is great for anybody who likes to understand this topic. You’re confident you know plenty over it.

  6. uggs on sale on December 6th, 2011 8:13 am

    lately, The fact gives a great deal of proven to supplying reactions on location site reviews and provide situated answers perhaps a lot less.

  7. uggs outlet online on December 6th, 2011 7:04 pm

    if you desire to become more healthy, after this you should concentrate on lower carbo foods.

  8. UGG on December 6th, 2011 7:12 pm

    I love to this excellent website, will truly come back. Make sure you continue composing high grade posts.

  9. diagnostic immobilier on February 7th, 2012 7:54 am

    Salut tout le monde que pensez-vous de mon nouveau site sur le diagnostic immobilier?

Leave a Reply