Paul Volcker, chair of the Economic Recovery Advisory Board, meets with President Obama at the White House, 2009
By Grant Morgan
Socialist Worker
5 June 2010
5 June 2010
A few days ago Paul Volcker, chair of the Obama administration’s Economic Recovery Advisory Board, published a strategic assessment of how to respond to the “dangerous and intractable” risks facing America and other advanced economies.
Despite weak attempts at optimism, his assessment is essentially alarmist. That’s reflected in his panicky headline: “The time we have is growing short”.
Volcker is clearly gloomy about the scale of the problems confronting global capitalism, and what to do to fix them.
He calls for internationally coordinated legislation to tackle “deep-seated structural issues”, such as “too big to fail” financial institutions which are “jeopardizing the entire economy” by taking excessive risks in the knowledge they will be bailed out by governments.
While Volcker holds out the “hope” that new laws will be beneficial, he admits that “none of these reforms will assure crisis-free financial markets in the years ahead”. The best that can be achieved, he says, is to keep crises “manageable” and “reduce their scale and frequency”.
And Volcker concedes that “the critical policy issues we face go way beyond the technicalities of law and regulation of financial markets”. For example, he cites “the risks associated with the virtually unprecedented levels of public debt” in developed economies which are now rocking the Eurozone.
He also points to “even larger questions of critical importance” only a little further ahead, like global warming, energy independence and environmental protection. “Are we really prepared to meet these problems, and the related fiscal implications?” he asks. “If not, today’s concerns may soon become tomorrow's existential crises.”
Volcker, who was chair of the US Federal Reserve under presidents Jimmy Carter and Ronald Reagan (1979-87), and now heads up Barack Obama’s crisis think tank, is one of the most influential policy shapers among America's ruling circles. And he is a major player among the elites of other powerful states through his prominent role inside international forums like the Bilderberg Group and Trilateral Commission.
Yet his public overview of what to do about structural problems facing key states reeks of pessimism. He comes close to admitting that “solutions” admissible to capitalism fall way short of fixing problems that could collapse the world system.
Obama's policy guru says today’s financial, ecological and energy “concerns” may soon turn into “existential crises”, a phrase that echoes my recent 20,000-word essay titled “Beware! The end is nigh! Why global capitalism is tipping towards collapse, and how we can act for a decent future.”
Here I analyse the “existential crises” of profitability, ecology, resources, imperialism and legitimacy. These five crises are converging into a perfect storm that looks sure to “tip global capitalism towards collapse amidst international revolutions and counter-revolutions”.
To view my essay, go to http://unityaotearoa.blogspot.com/2010/03/grant-morgan-beware-end-is-nigh.html.
Click “read more” below to view Paul Volcker’s essay.
