In a sign of the panic gripping Washington’s policy-makers, one of Barack Obama’s key economic advisors, Paul Volcker, has warned a gathering of his leading peers that the crash of 2008 might be “the mother of all financial crises… I don’t remember any time, maybe even the Great Depression, when things went down quite so fast, quite so uniformly around the world”. Volcker, chairman of the president’s Economic Recovery Advisory Board and former chair of the Federal Reserve, told a conference at Columbia University’s Centre for Capitalism and Society on 20 February that the crisis was “characterized by being very international” and was the product of deep global imbalances.

But it is not only for their candor about the scale of the crisis that Volcker’s Columbia comments are notable. The former Fed chief admitted to his star-studded audience (including celebrity economist Jeffrey Sachs, George Soros and three Nobel Prize winners) that the profession of which they were all a part had failed. The breakdown of the world financial system has “occurred in the face of almost all policy and intellectual analysis… Even the experts don’t know what’s going on”.

Obama’s chief advisor on economic recovery went on to concede that he himself had no answers, saying: “The first priority is to restore some semblance of stability and order in the market and restore the flow of credit. I’m not going to talk about that. I haven’t got—if I had the answer I might talk about it, but I’m not sure I have it, so I think we’ll neglect that for the moment.”

These admissions suggest that even the architects of the bank bailouts and of Obama’s new lending fund have no confidence in those policies and no alternatives to put forward. This is the fund that Obama claimed during his 24 February speech to Congress would “aggressively break [the] destructive cycle [of frozen credit]” by “helping to provide auto loans, college loans, and small business loans to the consumers and entrepreneurs…”

The significance of Volcker’s Columbia comments becomes clear when one considers his broader political role, in particular the respect Volcker commands among bourgeois economists as the senior ruling class “enforcer”. Apparently aware that Volcker would relish the opportunity to “tell it like it is”, Columbia University president, Lee Bollinger, introduced Volcker as having “a special place in the history of this country and of the world as… being a person who provided leadership at a critical moment and was able to see things and say things clearly, even when [people] did not want to hear them.”