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Paul Volcker, former Federal Reserve Chairman and head of the Economic Recovery Advisory Board - 


Steve Chiotakis: Congressional Democrats are holding an economic forum today. One of them is Paul Volcker, who'll serve as a special economic adviser to President-elect Obama. But some aren't so happy about it, and here's Marketplace's Nancy Marshall Genzer reports.

Nancy Marshall Genzer: Paul Volcker tamed inflation in the 80's, when he headed the Fed. It was no pain, no gain. He ramped up interest rates. That triggered a recession, but vanquished double-digit inflation.

Paul Kasriel is chief economist for Northern Trust. He says Volcker will recommend more tough love for today's financial system.

Paul Kasriel: He's going to be in favor of reining in a lot of the trading and speculative activities.

Kasriel says Volcker will also try to get consumers to live within their means.

But Princeton economist Peter Kenen disagrees. He says there's a contradiction between Volcker's well-known frugality and what's needed today.

Peter Kenen: This is the time to encourage people to spend, and prevent the economy from sliding further down into recession.

Of course, all that spending could rekindle inflation. But Volcker knows what to do if that happens.

In Washington, I'm Nancy Marshall Genzer for Marketplace.