Great item in Bloomberg News this AM. Where have we heard of the coming Volcker-Summers showdown? Ah, it was in The Big Picture.
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.”
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…
The 6-foot, 7-inch Volcker, who ran the Fed from 1979 to 1987, was vilified for raising interest rates to fight inflation at the risk of pushing the U.S. into a recession.
Since then, Volcker’s assault on runaway prices has been credited with sparking years of economic growth. Meanwhile, the standing of his successor, Alan Greenspan, has been undermined by questions about whether his policies set the stage for the current credit crunch and economic slowdown.
Great stuff — read the full article
Volcker Chafes at Obama Panel Delay, Strains With Summers Rise
Robert Schmidt and Julianna Goldman
Bloomberg Feb. 5 2009