January 22nd, 2010

(no subject)

So after a year of doing it the Geithner/Summers way--kissing up to the banks--President Obama is finally bringing Paul Volcker in from the outer fringes of his administration, where he'd been languishing unheeded for months. I have no idea whether the President actually believes that Volcker has an answer but it sure seems like Tuesday night's election results had an effect.

Rahm Emanuel famously said, "Never let a serious crisis go to waste. What I mean by that is it's an opportunity to do things you couldn't do before." Well, this administration may have let the banking crisis go to waste. If they'd worked on financial reform when everyone was in a panic they'd have had that opportunity. Now the bankers have had a year of rising markets to regroup.

I've thought since the inauguration that the economy will make or break this administration. James Carville's phrase from 1992, "The economy, stupid" is even more true now than it was then. And if I could see that, it should have been obvious to them.

In any case it's quite a return to the limelight for the man who broke the inflation Reagan inherited from Carter.