Letters

Bond is wrong about Obama

Millie Be (2008-11-20)

http://www.pambazuka.org/en/category/letters/52087

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I have a problem Bond's parochial article; it's resting on a shaky premise. Just because somebody told Obama that Volcker is a "legend" does not mean that Obama will let Volker totally spearhead the new administration's economic agenda. Additionally, Bond dredged up the only negative consequence of Volcker's tenure at the Fed and is using that as a premise for suggesting that the same measures will be relied on to tackle the current economic mess, much to the potential detriment of Africa. This doesn't make much sense. Obama has always maintained the importance of seeking varied expert opinions to guide his decisions. I believe that will be his approach to managing the economic crisis – and that approach puts paid to Bond's concerns about Volcker influencing Obama's entire economic approach.

I would have found more value in Bond's article if, in addition to pointing out the problems of the so-called "Volcker shock", Bond had also suggested how the Obama administration could turn the economy around without recourse to the so-called "Volcker Shock" of the seventies. But Bond made no useful suggestions so his article leaves me rather exasperated. The world has changed so it is very unlikely that the Volcker shock would be effected in the exact same manner, if at all. This is 2008, hardly similar to the seventies!

Having said that I am not at all concerned/surprised that Volcker is one of Obama's economic advisors. The most urgent issue on Obama's agenda right now is the economy. Volcker, from America's standpoint, had effectively addressed excess credit in the past. Volcker's statements on Paulson's handling of the crisis were on point from the very beginning. Volcker wants to curb consumer spending - and Lord knows it needs to be curbed! If I were Obama, I would be listening to him too.

At the risk of sounding too simplistic, the economy is in its current state, primarily because of gaps in oversight that led to excessive & risky borrowing by consumers (i.e. sub prime loans) and risky derivative gambles by banks, etc. That's just one aspect of this problem; there are also questions of enforcement, fraud prevention, etc. It's a multi-faceted problem requiring a litany of economic talents to address it. Volcker is just one of the people involved. There are others and Obama does not need Bond prodding him to consult widely, the man is already doing that.

Clearly Bond has paid little attention to what could actually drive Obama's economic agenda: progressive philosophy. Bond needs to read the issues articulated by the Center for American Progress whose CEO, John Podesta, is on Obama's transition team; that should allay Bond's fears.

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