Former Fed Chair Paul Volcker isn’t satisfied with just the Volcker rule, which will limit banks’ ability to make risky bets. “Financial reform is work half-done,” growled the six foot eight retired central banker on Wednesday. But thats not what keeps him up at night. “Income distribution has not been so top-heavy since 1929,” warned the 85-year-old economist in a pessimistic speech that only occasionally glimmered with a hint of hope.
Speaking at an Atlantic conference on the economy, the man who Jimmy Carter and other Democrats despised for his recession-causing efforts to fight inflation in the early 1970s and 1980s continued his re-emergence as an idiosyncratic hero of the left. “1% of us are doing OK,” he said over lunch, sounding entirely comfortable with the rhetoric of not just President Obama but also Occupy Wall Street, as the conference guests — bankers, journalists, diplomats — munched on frisee lettuce and chicken.
He warned that he was representing a profession that wasn’t especially accountable, but was still haunted by its failure to predict or prevent the financial crises and grinding economic pain. “The world of political economists has lost the sense of self-confidence it once had,” he added as leaned over the podium, saying there were no “silver bullets” for growth while recommending a mix of stimulus now and deficit reduction later. He supported reforming the tax code — and raising rates on the wealthy — so there was “clarity and consistency.”