A NEW SHERIFF IN TOWN?

11/26/08

As those who know me, and many of my readers, might suspect, I am delighted that Paul Volcker has been named Chairman of something called the President’s Economic Recovery Advisory Board. No, I am not happy about their being yet another Council or Board or other soon to be vestigial bureaucracy, but I am confident that the presence of Mr. Volcker will have a eupeptic effect on economic policies emerging from the Obama Administration.

As those who know me, and many of my readers, might also suspect, I am not at all happy that Tim Geithner has been named Treasury Secretary. While I didn’t think that Mr. Volcker would get that job (Mr. Volcker is 81 and I am realistic.), I was hoping for someone other than Mr. Geithner, perhaps Bob Rubin, not for any policy reasons but for the confidence Mr. Rubin could inspire. Mr. Geithner is a reflexive interventionist and one of the chief architects of what I think are the severely wrong-headed policy responses to our economic difficulties. His appointment is an indication that Mr. Obama may intend to lead us further down the rabbit hole of economic mismanagement, much as the dyspeptic retention of Robert Gates as Defense Secretary is an indication that Mr. Obama may intend to lead us further down the rabbit hole of muddle-headed overseas adventures, but that is another conversation entirely.

One could very plausibly argue that Mr. Volcker is also onboard with the sort of economic interventionism that I feel is digging us further into the economic latrine. I understand that. But Paul Volcker is Paul Volcker. He stands for more than frenetic economic intervention. It is not too far beyond the bounds of good sense to argue that Paul Volcker, by crushing the runaway Carter/Miller/Burns inflation of the late ‘70s and early ‘80s, saved Western civilization. Paul Volcker is the type of guy (like Warren Buffett) who, when he says or prescribes something that runs counter to what I think or believe, makes me reexamine my thought or belief. Tim Geithner is just a career bureaucrat who, while bright and energetic (characteristics that can be big negatives when applied in the wrong direction), has very limited experience in the private sector (none, really) and who hence seems to have a reflexive belief in the salubriousness of heavy-handed government.

I just hope that this President’s Economic Recovery Advisory Board is more than a symbolic way of saying “Thanks” to Mr. Volcker for lending intellectual heft and centrist cover to the Obama campaign.