Insomnia (insomnia) wrote,
Insomnia
insomnia

It's the economy, stupid.

Former Chairman of the Federal Reserve Paul Volcker has taken an unprecidented act for him and has endorsed Barack Obama for the next President of the United States.

“After 30 years in government, serving under five Presidents of both parties and chairing two non-partisan commissions on the Public Service, I have been reluctant to engage in political campaigns. The time has come to overcome that reluctance. However, it is not the current turmoil in markets or the economic uncertainties that have impelled my decision. Rather, it is the breadth and depth of challenges that face our nation at home and abroad. Those challenges demand a new leadership and a fresh approach.

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. That leadership must begin here in America but it can also restore needed confidence in our vision, our strength, and our purposes right around the world.”

This is a big deal for economic conservatives, as Volcker, though appointed by Carter, was the Fed chairman during the Reagan administration's best economic years. 

Volcker's Fed is widely credited with ending the United States' stagflation crisis of the 1970s by limiting the growth of the money supply, abandoning the previous policy of targeting interest rates. Inflation, which peaked at 13.5% in 1981, was successfully lowered to 3.2% by 1983.  

Given that we are entering another period of what appears to be stagflation, at least as far as food and energy costs are concerned, his endorsement should be very impressive for fiscal conservatives and stands in sharp contrast to the "unlimited credit / debt for everyone" era of Alan Greenspan, and the "throwing money from a helicopter" excesses of Ben Bernanke.

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