“As 2009 rolled on and the panic receded, Paul Volcker felt there was something very wrong with the Obama administration’s plans for reforming Wall Street. But no one was listening to him. The gruff-voiced, cigar-chomping former Fed chairman may have been nominally a member of the Obama team—chairman of the president’s new Economic Recovery Advisory Board—as well as a living legend of finance, the conquerer of runaway inflation in the ’70s.
“But the then-82-year-old Volcker found that his rep wasn’t getting him anywhere with the president’s inner circle, especially Obama’s bank-friendly Treasury secretary, Tim Geithner, and chief economic advisor Larry Summers, both of whom had little time for him. In an interview in late 2009, Volcker said he felt somewhat used early on by Obama (whom he had publicly backed for president)–merely trotted out for the cameras during the presidential campaign, but then sidelined when the real decisions were being made. “When the economy began going sour, then they decided I could be some kind of symbol of responsibility and prudence of their economic policy,” he said with a sour smile.
“Now, with little fanfare, Gensler is on his way out at the CFTC—perhaps the most unsung hero of the entire post-financial crisis period—and the effectiveness of the Volcker Rule remains to be seen, especially since regulators have put off implementation until 2015. The banks will no doubt sue to change it further. But even some skeptics of Dodd-Frank think it could be the biggest breakthrough yet against the concentrated power of Wall Street banks. It ‘will not end all gambling activities on Wall Street, but should limit them and reduce the risk to Main Street,’ Dennis Kelleher, the head of the advocacy group Better Markets, said in a statement. Thanks largely to the odd couple of Paul Volcker and Gary Gensler, the rule may yet prove to be the single most effective solution to the too-big-to-fail problem.”
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