Oleg Komlik — Paul Volcker: “The ‪‎economics‬ profession is in trouble… We need to pull economics back into the real world of Political Economy.”

Economic Sociology and Political Economy
Paul Volcker: “The ‪‎economics‬ profession is in trouble… We need to pull economics back into the real world of Political Economy.”
Oleg Komlik | founder and editor-in-chief of the ES/PE, Chairman of the Junior Sociologists Network at the International Sociological Association, a PhD Candidate in Economic Sociology in the Department of Sociology and Anthropology at Ben-Gurion University, and a Lecturer in the School of Behavioral Sciences at the College of Management Academic Studies

Paul Volcker — A New Bretton Woods???

By now I think we can agree that the absence of an official, rules-based cooperatively managed, monetary system has not been a great success. In fact, international financial crises seem at least as frequent and more destructive in impeding economic stability and growth. [p. 3]

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That is all a long introduction to a plea – a plea for attention to the need for developing an international monetary and financial system worthy of our time. [p. 4] 

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Well, even if you agree with my concerns, you will reasonably ask where the analysis leads. What is the approach (or presumably combination of approaches) that can better reconcile reasonably free and open markets with independent national policies, maintaining in the process the stability in markets and economies that is in the common interest? That is a question I cannot answer today with a sense of conviction and practicality. What I do know is that governments do not have before them the necessary analysis and well- conceived approaches that could command attention and support. [p. 5]

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But what can be done now is to lay the intellectual ground work for approaches that can, for instance, identify and limit prolonged and ultimately unsustainable imbalances in national payments. We should be able, within a broad range, to manage exchange rates among major 5 currencies in a manner that discourages the extreme changes that are inconsistent with orderly adjustment. We can and should consider ways and means of encouraging – even insisting upon – needed balance of payments equilibrium. Nor would I reject some re-assessment of the use of a single national currency as the dominant international reserve and trading vehicle. For instance, do we want to encourage or discourage so important a development as regional trade and currency areas? A new Bretton Woods conference? We are long ways from that. But surely events have raised, whether we want to admit it or not, some fundamental questions that have been ignored for decades. [p. 5-6]

A New Bretton Woods??? (PDF)
Remarks By Paul A. Volcker
At The Annual Meeting Of The Bretton Woods Committee
Washington, Dc – May 21, 2014

Brad DeLong — Senate Votes for Federal Reserve Chair

The title says it all.

But… But… But… I was told last summer that a big argument for Janet Yellen was that she was clearly so well-qualified that lots of Republicans would vote for cloture, and she would clear the 60-vote cloture threshold easily…

Also shows why Larry Summers might not have been confirmed, with some Democrats also voting against him along with most Republicans.

WCEG — The Equitablog
Senate Votes for Federal Reserve Chair: 83 Volcker, 84 Volcker Reppointment, 91 Greenspan, 100 Greenspan Reppointment, 91 Greenspan Third, 89 Greenspan Fourth, 100 Greenspan Fifth, 99 Bernanke, 77 Bernanke Reppointment, 59 Yellen
Brad DeLong

Warren Mosler — Comments on Volcker article

Warren sets Paul Volcker straight. The world is now on non-convertible floating rate monetary regime.

The Center of the Universe

Comments on Volcker article

Warren Mosler

Elizabeth Warren: Paul Volcker Is My Pick For Fed Chair

Whaat!

The Huffington Post
Elizabeth Warren: Paul Volcker Is My Pick For Fed Chair

Warren didn’t offer any reasons for her endorsement of Volcker beyond saying, “I think he’s terrific,” but it’s likely his credentials may have something to do with it. Volcker, who served as Fed chairman under presidents Jimmy Carter and Ronald Reagan, is largely credited with taming runaway inflation during his tenure.

He also crafted one of the centerpieces of the 2010 Dodd Frank financial reform law-- an eponymous rule that aims to curb banks’ risky bets with their own money. Wall Street lobbyists have whittled down the law some and House Republicans sought to repeal the Volcker rule earlier this year.

John Carney — A Timely Banking Lesson From the Paul Volcker Era

A dramatic change in the conduct of monetary policy that occurred in 1979 can shed some light on the current confusion over the role of reserves in bank lending.

In the fall of 1979, inflation was running at more than 10 percent a year. Paul Volcker, the Fed chairman, believed that the usual procedure of gradual interest rate increases were inadequate. In the first place, it was proving difficult—perhaps impossible—to determine the “right” level of interest rates that would stem inflation. And some at the Fed believed interest rate manipulation had just become ineffective.

 So Volcker dramatically changed how monetary policy was implemented.

On October 6, 1979, the Federal Reserve announced that it would begin targeting bank reserves rather than the federal funds rate in order to curb inflation and “speculative excesses in financial, foreign exchange, and commodity markets.” This meant that the Fed would allow interest rates to vary much more widely and climb much higher in reaction to changes in demand for money and bank reserves.

Read it at CNBC NetNeet
A Timely Banking Lesson From the Paul Volcker Era
by John Carney | Senior Editor

Explains why the Fed doesn't target quantity and let price float anymore.