Investor Agenda

The Silencing of Paul Volcker?

Did we witness the silencing of one of the greatest central bankers ever yesterday? 

Yesterday’s appearance on my show by former Federal Reserve Chairman Paul Volcker raised serious questions whether he is being silenced by the White House.

Former U.S. Federal Reserve Chairman Paul Volcker

Different sources I’ve talked to – and The New York Times also ran articleabout this – have questioned whether Chairman Volcker’s opinions on some issues are being heard by the Obama administration.

Some have wondered whether he has been told by the Obama administration to not say much; others say his views differ enough from some of the administration’s policies that he is simply uncomfortable talking about them.

With the Fed meeting this week and the resumption of growth in the third quarter, one of the big questions right now is how and when the Fed can unwind the fiscal stimuli currently in place.

I was very much looking forward to talking about this and other important issues with Mr. Volcker, the widely respected Chairman of the Federal Reserve under Presidents Jimmy Carter and Ronald Reagan. He is attending the CME Group’s Global Financial Leadership Conference in Naples, Florida, and I had arranged to talk with him there.

Chairman Volcker had met earlier in the day with President Obama, and as he arrived for our interview, he asked, “Did I agree to this?” I assured him that he had, and he told me it would have to be short because he had to give speech.

We spoke for only five minutes or so, and he seemed uneasy right off the bat. He mentioned a few times that he had to go give a speech, and I tried my best to ask quick questions about some of the big issues right now – deficits, financial reform, job creation, commercial banks versus investment banks. After a few minutes, he got up and started to walk away as the cameras were still rolling.

I’m not sure if it was tight scheduling that had Chairman Volcker hesitant to talk – I knew he had to go give a speech – but I did feel as if there was a reluctance to say too much. It was unlike any other time I have interviewed him.

Mr. Volcker is widely known to dislike deficits and the weak dollar, and he reportedly wants to have banking institutions move away from taking on risks, like investment banks and other more exotic parts of the business.

You can read the transcript and watch the video here, and I also talked with Larry Kudlow about it later in the day.

Whatever was going on, I did not take it personally and was more disappointed than anything that we didn’t get to hear more from the man my colleague Larry Kudlow called “probably the best central banker of our lifetime.” I look forward to my next opportunity to speak with the distinguished former Chairman and hearing his insights on the important economic matters of the day.



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