Paul Volcker, the formal chairman of the federal reserve and notorious champion over the stagflation of the early ’80’s, has become more vocal in his criticism of Wall Street. He mocked the self-appreciating bankers by saying that the biggest financial innovation in the past 20 years was the cash (ATM) machine. When the bankers protested any suggestion of “stifling financial innovation” he said, “I wish someone would give me one shred of neutral evidence that financial innovation has led to economic growth — one shred of evidence”.
This is a welcome response from a respected former chairman with an appreciation of inflation and its destructive effects on an economy. I hope that he continues to speak out as an agent of change in his role as the Chairman of President Obama’s Economic Recovery Advisory board.
Sep 22, 2009