Paul Volcker Laments The Plight Of America’s Middle Class
The financial world has gotten “bigger than its britches,” Former Federal Reserve Chairman Paul Volcker, 87 anni, says. He also laments that the opportunities for the middle class to advance are “not as great as they once were.”
Mr. Volcker said that he has seen “20 different substantial efforts to reform the regulatory system. None of them have moved the needle.”
He said that CEO’s on Wall Street are getting bigger paychecks, but seem less accountable for their actions.
And even thought the financial industry has grown larger, he wonders “how much has that actually contributed to the growth and productivity of the economy?”
Mr. Volcker has been calling for a major overhaul of financial regulation. But he said the solution may have to be as big as the maze-like complexity of the industry itself, which has morphed from banks into a variety of often difficult-to-comprehend businesses and services.
“What about the crisis that’s going to arise outside the banking system?” Mr. Volcker says. “It is inadequately supervised and regulated, and it’s time to do something.”
Joining Volcker’s criticism is a most unlikely voice on financial reform is Pope Francis.
Pope Francis, 78 anni, dedicated a few lines of his 183-pg encyclical on the environment to the topic of the failures of banks and markets.
In Papa’s view, “the lessons of the global financial crisis have not been assimilated” and the governments’ response to the crisis have only set up the financial system for a future panic.
“The financial crisis of 2007-08 provided an opportunity to develop a new economy, more attentive to ethical principles, and new ways of regulating speculative financial practices and virtual wealth,” it reads.
“But the response to the crisis did not include rethinking the outdated criteria which continue to rule the world.”
Have a happy week.
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Paul Ebeling
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