Spaketh I in haste?

Maybe Obama is not the limp-wristed, effeminate, chickenhearted, yellow-bellied yes-man that I lampooned him for being a mere handful of (figurative) moments earlier. It only took one loss in the senate to prompt a complete reversal of his economic policies to date. We have been promised a new Glass-Steagall, a ban on mergers and takeovers in the financial industry, and a bank fee to the tune of $90 billion (over ten years, that is). That's a good start, one he should've led with when he, you know, started.

But aside from bombastic promises to what has finally been recognized as an upset electorate, there is something mentioned in brief that is far more interesting. The separation of speculative and deposit-taking institutions is going under the nom-de-guerre "The Volcker Rule," in honor of Paul Volcker, who flew to Washington to discuss it with the president. Yves Smith at Naked Capitalism sees it as the most promising development of Obama's 'new' hardline stance, too. Volcker, who beat stagflation and put monetary policy on a much sounder footing than it had been in the 70's, is a giant in every sense of the word. He is also no friend of finance's--at a conference in Sussex early last month, he unzipped his pants and peed in the face of his banking audience by asserting that "the 'single most important' contribution in the last 25 years has been automatic telling machines, which he said had at least proved 'useful.'" The Telegraph goes on to report,

Echoing FSA chairman Lord Turner's comments that banks are "socially useless", Mr Volcker told delegates who had been discussing how to rebuild the financial system to "wake up". He said credit default swaps and collateralised debt obligations had taken the economy "right to the brink of disaster" and added that the economy had grown at "greater rates of speed" during the 1960s without such products.

If Volcker ousts, or at least chastises, the Summers-Geithner axis, it will make for a very different White House, and not just because at 6'7" he could probably outbox a gorilla. As we've seen, Obama is extremely pliant vis-a-vis his advisers, which thusfar that has been a severe liability. Volcker might just make it a blessing.