That was quite a speech former Fed Chair Paul Volcker gave to the Economic Club of New York yesterday. He recalled his stand against bailing out New York City and the beneficial long-run effects that resulted. Then he contrasted that with recent Fed actions under Ben Bernanke.

"Simply stated, the bright new financial system, with all its talented participants, with all its rich rewards, has failed the test of the marketplace. To meet the challenge, the Federal Reserve judged it necessary to take actions that extend to the very edge of its lawful and implied powers, transcending in the process, certain long embedded central banking principles and practices. The extension of lending directly to non-banking financial institutions under the authority of nominally temporary emergency powers will surely be interpreted as an implied promise of similar action in times of future turmoil."

Later Volcker gave a ringing endorsement of Senator Obama (D-IL) for president. "When you look at those early election returns in Iowa or elsewhere -- to exaggerate a bit -- everybody under 30 was voting for Barack Obama. Everybody over 60 was voting for Hillary Clinton. You ask yourself where does the future of the country lie? I think the answer is obvious."