Is it just an eclipse or a more enduring realignment of celestial objects? Hard to know, but I took heart from the news late last week that President Obama had finally paid more heed to former Fed chair Paul Volcker’s advice than to that of the Two Wall-Street Toadies, Larry Summers and Tim Geithner. Shoving aside Summers and Geithner, who from the get-go have been overly protective of the big banks, Obama agreed to follow Volcker’s advice to limit the size of the biggest banks, curtail their risk-taking activities, and prohibit commercial banks from proprietary trading of financial securities. It’s about time.
Whether it was Scott Brown’s victory on Tuesday or some other set of prods, Obama finally moved off the dime on this measure that’s been under consideration for a while and threw his weight in with Volcker, Vice-President Biden, David Axelrod, and others who had long been pushing for tougher crackdowns on the banks. This is very good. I would have liked to see more here, such as tight limits on compensation. But when it comes to taking on the big banks, possibly the worst entities in our sordid economy, Obama will never be populist enough for me.
And a delightful little sidelight of this story is that Larry Summers has finally had his arrogant sails trimmed again. (When I say “again,” I’m thinking of Harvard having fired his smug, imperious ass.) In the future, let’s see a lot more of Christina Romer, chair of the Council of Economic Advisers, and a lot less of Summers.
(One of the problems with being too busy at times to blog is that the big news stories just keep piling up and one keeps falling behind more. I’ve decided that mini-reactions are better than none.)