A friend of mine, who has followed Paul Volcker for much of his career and read many of his books and articles (which I confess I haven’t), told me that the thing that struck him most about the performance of the famed and still very active but officially retired American central banker last Monday night in Barbados was that he seemed to have aged.
Of course, my friend added, “I’ll be 85 in 20 years too, so we are all getting older!”
I start my “review” of the Volcker speech at Frank Collymore Hall on the subject of age out of the greatest esteem for the gentleman who held his audience spellbound for 90 minutes, because Mr Volcker himself announced his age at the opening of his remarks, saying he was very conscious of it and adding that with the world in the economic trouble it was in, he often said to himself, “Oh, to be 80 again!”
For me, not having (to my shame and regret) followed Mr Volcker’s career much except for when he appeared in the news heading up some panel or think tank for President Obama, I did not have the impediment of earlier expectations.
Thus unencumbered last Monday evening, I was able to accept that the person before me was, yes, 85, but with the lively mind of a far younger man.
The title of his presentation, Reflections, was vague enough to have allowed him to have said almost anything, and perhaps a lesser talent would have simply read out a bio of his career highlights and experiences.
That would also have been worth hearing, I’m sure.
But the combination of Mr Volcker’s folksy communication skills – he used almost no technical jargon at all – and his genuine ability to speak about world economic problems as if he were your grandfather giving you advice on how to balance the household checkbook at the proverbial kitchen table, engaged the full attention of the entire audience.
We all understood every word, except for some inaudible ones due to a weak microphone set-up. Paul Volcker communicated.
So did Minister of Finance Chris Sinckler, whose introduction followed an anecdotal path, darting between a biography of the speaker and the Government’s motives for inviting him to Barbados. Mr Sinckler struck every note right, conveying the enormous respect which current world leaders have for Mr Volcker along with his own personal enthusiasm, having only met him a few days after becoming Minister of Finance.
The standing room only (SRO) crowd could not be accommodated in the hall – which, of course, does not allow for SRO – so they were seated in the lobby and allowed to watch on monitors, but there were still too many, so the overflow of the overflow had to be seated in the Grande Salle. Such is the the thirst for Barbadians and residents for interpretation and explanation of the terrible financial crisis that grips the world in its deadly grasp.
Mr Volcker did not offer any quick fixes for the global economic problems we face, but he noted that many of the problems came about as the result of a lack of fiscal regulation, agreeing that countries like Canada and the emerging economies, which followed more closely the banking rules set up by the developed countries than most developed countries themselves, have come through better than most.
His prescription of tighter regulation, he said, has been put on the back burner in the United States and other countries due to coming elections or other political considerations. He isn’t happy about it.
He explained his key recommendation, which President Obama has dubbed the Volcker Rule and is part of the Dodd-Frank legislation, as one that would prohibit banks from engaging in speculative, proprietary trading. He noted that commercial banks are there to do conservative, traditional banking and are therefore allowed to “go home to mother” if they run into problems by getting help from the Federal Reserve in the United States banks’ case, or being able to access deposit insurance and other aid and assistance from a country’s central banking system. As a result, they should not be allowed to do anything too risky with the money they were holding for their customers.
But most fascinating was his unvarnished description of the rise of the “substantially emerged” emerging countries and how the world may look in just ten years’ time, when China’s economy will be the biggest in the world and the other BRICs Brazil, Russia and India, will also be much larger.
The United States’ debt, caused by the availability of cheap money, and the EU’s introspection over the fate of its euro did not make them strong competitors in this new race to the top, he suggested.
In fact, the world dominated by America and Britain, which he had known for most of his 60 years in central banking, was being turned on its head, he said. It was a system which, while not perfect by any means, was perhaps generally “benign”, as it was based on “democratic capitalism”.
The Chinese, he quipped, had embraced the “capitalism” concept without the “democratic” part.
The ability of Mr Volcker to metaphorically paint large canvasses with broad strokes, and without reading completely from a prepared speech or notes, set him apart from most people in his line of work. And his answering of questions simply but without being simplistic really endeared him to his audience.
(By the way, why would a Bajan get up to ask a question at 9:30 p.m. and say “Good afternoon”?)
As a result, the Central Bank found its guest answering questions for another 45 minutes, by which time you could see some fatigue setting in. That is why my one criticism of the event (to “correct” something which I know was not intended by the bank because it did not foresee so many questions coming in) is that after the main speech is over, a couple of armchairs be brought on stage so that the moderator and the guest can sit a little more comfortably for the Q&A session.
But this suggestion is not in any way intended to take away from the tremendous success of the event, for which praise all around is due, first to the Central Bank for making it happen, but also to the Government for taking up Mr Sinckler’s enthusiastic suggestion to invite Mr Volcker and his wife to Barbados, and for so many ministers showing up and sitting in the audience like everyone else and just thoroughly enjoying the evening, from the prime minister on down.
They did not pack the back of the stage to remind you who had brought this famous personage to our island and there were no efforts to gain political mileage from the event.
And finally to Mr Volcker and his wife for showing us that a couple’s love and affection for each other triumphs even the most erudite performance on the global economy, and in fact illuminates its value as part of the entire human experience.