Paul Volker. Photo by Third Way Think Tank.
PBI Chair Ellen Brown writes in Truthdig that the legacy of Federal Reserve Chairman Paul Volcker, who died on December 8, is controversial at best.
“At a time when the Fed’s credibility was “greatly diminished,” he restored to it the life-and-death power over the economy that it continues to exercise today. His “shock therapy” of the early 1980s broke the backs of labor and the unions, bankrupted the savings and loans, and laid the groundwork for the “liberalization” of the banking laws that allowed securitization, derivatives, and the repo market to take center stage. As noted by Jeff Spross in The Week, Volcker’s chosen strategy essentially loaded all the pain onto the working class, an approach to monetary policy that has shaped Fed policy ever since.”
“In 2008-09, the Fed was an opaque accessory to the bank heist in which massive fraud was covered up and the banks were made whole despite their criminality. Taking the dollar off the gold standard allowed the Fed to engage in the “quantitative easing” that underwrote this heist. Bolstered by OPEC oil backing, uncoupling the dollar from gold also allowed it to maintain and expand its status as global reserve currency.”