CurtisLow
02-03-2008, 10:30 AM
Now we know who the Federal reserve is backing.. Obama the new puppet.
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Paul Volcker, Former Fed Chairman, Endorses Obama (Update3)
By Craig Torres and Kristin Jensen
Enlarge Image/Details
Jan. 31 (Bloomberg) -- Democratic presidential candidate Barack Obama won the endorsement of former Federal Reserve Chairman Paul Volcker.
``It is only Barack Obama, in his person, in his ideas, in his ability to understand and to articulate both our needs and our hopes that provide the potential for strong and fresh leadership,'' Volcker said in an e-mailed statement today.
Obama, 46, an Illinois senator, is locked in a tight race with New York Senator Hillary Clinton for the Democratic nomination. The two will meet head-to-head in more than 20 state primaries and caucuses on Feb. 5 after yesterday's withdrawal of former North Carolina Senator John Edwards from the race.
``This is a high-profile endorsement that is likely to strengthen Obama's credibility with respect to economic issues,'' said Costas Panagopoulos, director of the elections and campaign management program at Fordham University in New York. ``Given the growing importance of the economy as a top issue for voters, the Volcker endorsement can be very helpful.''
Volcker's statement assailed ``partisan bickering,'' ideological extremes and the ``narrow'' interests of lobbyists that he said have taken over American politics and eroded faith in government.
Challenges such as shoring up Social Security, providing affordable health care and protecting the environment from global warming require ``a willingness to break out of the engrained habits of partisan politics,'' said the former Fed chairman, who served from 1979 to 1987.
`Coherent' Policies
``We haven't faced up to the need for coherent budget, tax and other policies that will encourage savings, innovation and investment'' and free the U.S. from its ``heavy dependence on foreign capital and maintain a stable dollar,'' Volcker said.
Volcker, 80, is one of the most capable and politically courageous leaders in the Fed's 94-year history, said Allan Meltzer, a Carnegie Mellon University economist who has written a history of the Federal Reserve.
Volcker risked his reputation on a 1979 strategy to raise interest rates and crush inflation that soared to 13 percent that year. His policy produced a 16-month recession in 1981 and 1982 and a 10.8 percent unemployment rate in December 1982. But the consumer price index, which had risen to 14.8 percent in the year ending March 1980, fell to 6.8 percent two years later and 3.6 percent in March 1983.
`Rescued' Economy
The 1979 policy ``rescued our nation's economy from a dangerous path of ever-escalating inflation and instability'' and was a ``turning point in our nation's economic history,'' former Fed Chairman Alan Greenspan said in an October 2004 speech.
``In terms of political courage, he stands out,'' Meltzer said. Volcker ``is the only one, with the possible exception of Greenspan, that really took it seriously what it was to be an independent central bank.''
Obama campaign spokesman Bill Burton confirmed the endorsement.
Volcker said he had been ``reluctant to engage in political campaigns,'' and added, ``The time has come to overcome that reluctance.''
``This signals important confidence in Obama's ability to cope as president with whatever economic issues might come his way,'' said Michael Graetz, a Yale University law professor who served in President George H.W. Bush's Treasury Department.
To contact the reporter on this story: Kristin Jensen in Washington at kjensen@bloomberg.net ; Craig Torres in Washington at 1220 or ctorres3@bloomberg.net
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXl43P8d8T1s
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Paul Volcker, Former Fed Chairman, Endorses Obama (Update3)
By Craig Torres and Kristin Jensen
Enlarge Image/Details
Jan. 31 (Bloomberg) -- Democratic presidential candidate Barack Obama won the endorsement of former Federal Reserve Chairman Paul Volcker.
``It is only Barack Obama, in his person, in his ideas, in his ability to understand and to articulate both our needs and our hopes that provide the potential for strong and fresh leadership,'' Volcker said in an e-mailed statement today.
Obama, 46, an Illinois senator, is locked in a tight race with New York Senator Hillary Clinton for the Democratic nomination. The two will meet head-to-head in more than 20 state primaries and caucuses on Feb. 5 after yesterday's withdrawal of former North Carolina Senator John Edwards from the race.
``This is a high-profile endorsement that is likely to strengthen Obama's credibility with respect to economic issues,'' said Costas Panagopoulos, director of the elections and campaign management program at Fordham University in New York. ``Given the growing importance of the economy as a top issue for voters, the Volcker endorsement can be very helpful.''
Volcker's statement assailed ``partisan bickering,'' ideological extremes and the ``narrow'' interests of lobbyists that he said have taken over American politics and eroded faith in government.
Challenges such as shoring up Social Security, providing affordable health care and protecting the environment from global warming require ``a willingness to break out of the engrained habits of partisan politics,'' said the former Fed chairman, who served from 1979 to 1987.
`Coherent' Policies
``We haven't faced up to the need for coherent budget, tax and other policies that will encourage savings, innovation and investment'' and free the U.S. from its ``heavy dependence on foreign capital and maintain a stable dollar,'' Volcker said.
Volcker, 80, is one of the most capable and politically courageous leaders in the Fed's 94-year history, said Allan Meltzer, a Carnegie Mellon University economist who has written a history of the Federal Reserve.
Volcker risked his reputation on a 1979 strategy to raise interest rates and crush inflation that soared to 13 percent that year. His policy produced a 16-month recession in 1981 and 1982 and a 10.8 percent unemployment rate in December 1982. But the consumer price index, which had risen to 14.8 percent in the year ending March 1980, fell to 6.8 percent two years later and 3.6 percent in March 1983.
`Rescued' Economy
The 1979 policy ``rescued our nation's economy from a dangerous path of ever-escalating inflation and instability'' and was a ``turning point in our nation's economic history,'' former Fed Chairman Alan Greenspan said in an October 2004 speech.
``In terms of political courage, he stands out,'' Meltzer said. Volcker ``is the only one, with the possible exception of Greenspan, that really took it seriously what it was to be an independent central bank.''
Obama campaign spokesman Bill Burton confirmed the endorsement.
Volcker said he had been ``reluctant to engage in political campaigns,'' and added, ``The time has come to overcome that reluctance.''
``This signals important confidence in Obama's ability to cope as president with whatever economic issues might come his way,'' said Michael Graetz, a Yale University law professor who served in President George H.W. Bush's Treasury Department.
To contact the reporter on this story: Kristin Jensen in Washington at kjensen@bloomberg.net ; Craig Torres in Washington at 1220 or ctorres3@bloomberg.net
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXl43P8d8T1s