Friday, February 01, 2008

Is Volcker Obama's Robert Rubin?

This is an unbelievable story. Former Fed Chairman Paul Volcker -- Mr. Hard Money, anti-deficit, sound financial himself -- has endorsed Senator Obama for President.

Here’s Volcker’s statement (courtesy of the WSJ):

“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.

Once upon a time, many years ago, I was a Volcker speechwriter at the New York Fed. He’s a great American. He’s a classic conservative. He’s a man of fiscal and monetary rectitude. While he was originally appointed Fed Chair by Jimmy Carter, Volcker ultimately teamed up with Ronald Reagan to put the kibosh on runaway inflation. He would not have made this endorsement on a whim. Believe me. He never gets involved in these kinds of political decisions.

Is Paul Volcker the new Robert Rubin? Is it possible that Mr. Volcker is somehow tutoring Obama? Is it possible that Obama is more financially conservative than originally believed?

Meanwhile, according to all the latest polling data, Obama is surging ahead with a full head of steam on Hillary. So we’re talking about a possible President here. This is a stock market story. It’s a bond market story. All for the very simple reason that we could be looking at the next President of the United States.