Photo: C-Span video
The Atlantic Magazine is having its Economics conference today, featuring speakers like Sheila Bair, Gene Sperling, former Treasury Secretary Paul Volcker, and financier Peter Schiff.Volcker spoke at 1:00 pm EST. First he had a conversation with a moderator (The Atlantic’s D.C. editor, Steve Clemons), and then the floor was opened to questions from the audience
And naturally, Schiff had a question for the man who created the controversial “Volcker Rule,” regulating trading at American banks. (You can watch the video via C-Span, the whole question starts around minute 57).
The entire exchange started off bad. From the video, Schiff’s question wasn’t discernible because his mic wasn’t working — Clemons pointed the problem out to the events ushers, and Volcker remarked sarcastically, “maybe it’s better that way.”
Apparently he heard what Schiff was going to say.
When Schiff finally got a working mic, here’s what he put forth:
“It’s an honour to ask a question to the last competent person to chair the Federal Reserve … You mentioned in your speech that you thought one of the biggest problems we have as a nation … is that we borrow too much and we spend too much … and yet you go on to praise Congress … for the stimulus, when the specific goal of the stimulus is to get us to borrow and spend even more. So if the problem is too much borrowing and spending, how is the solution that we borrow and spend even more?”
Volcker addressed the question in medical terms — sometimes you have to take a bit of the disease that’s hurting you as medicine …
But that didn’t satisfy Schiff, who interrupted Volcker excitedly saying: “But if it gets us deeper into debt …”
That’s when things got awkward, the two men started speaking at once, and the moderator intervened. “You need to allow Mr. Volcker to answer the question,” he said, effectively shushing Schiff.
“… Time being you needed some bandaid for the economy,” said the former Treasury Secretary. “And I think a reasonable judgement is that we would be worse without it …”