Paul Volcker on the Financial Meltdown

Paul Volcker is the last Fed chairman to have taken some tough policy stands on getting the economy back in order back in the late 70s. Most people think he was a Reagan appointee, but President Carter actually appointed him...

He's a very respected financial wizard who turned a faltering economy around. Of course, the nature and severity of the crisis then was not nearly the same, but he at least has dealt with dispensing tough medicine, unlike Ben Bernanke.

Here's Volcker's take on the current economic crisis we find ourselves in.

Unattractive or not in normal circumstances, the point is the needed tools to restore and maintain functioning markets are there. Now is the time to use them. To that end, the immediate and critical need is determined, forceful and persistent leadership -- extending across administrations and Congresses. Both the public and private sectors must be involved.

There is, and must be, recognition of the essential role that free and competitive financial markets play in a vigorous, innovative economic system. There needs to be understanding, in that context, that financial ups and downs -- and financial crises -- will be inevitable, even with responsible economic policies and sensible regulation. But never again should so much economic damage be risked by a financial structure so fragile, so overextended, so opaque as that of recent years.

We Have the Tools to Manage the Crisis - WSJ.com