February 05, 2009

Is Summers marginalizing Volcker?

Straight from Bloomberg...

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.

This is a time to take a moment and remember two things...

1) Paul Volcker is brilliant.
2) Larry Summers is not so much brilliant as he is middling.

Larry Summers, let's not forget, is one of the people inside the Administration who hates infrastructure and, if rumors are correct, is pushing internally the tax cuts the Republicans want. Even though most sane people say they won't do the trick to jolt us out of recession.

We can only hope that the President will slap down Larry and move Volcker to front and center.

Posted by mcblogger at February 5, 2009 12:44 PM

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