Paul Volcker yesterday criticized investment banks and regulators, with whom they share a cozy relationship for their excessive greed and their attitudes that fostered the financial crisis in the nation and the world, and for fighting meaningful regulation, which might keep this disaster from recurring in the future.

Volcker was chair of the Federal Reserve Bank during Ronald Reagan’s presidency and is generally credited, along with President Reagan, for our amazing recovery from the stagflation that threatened to cripple our economy after Carter’s misguided tenure. When Barack Obama ran for president, he sought and received guidance from Volcker and assured Americans that he would be an integral part of his economic team. Unfortunately, once in office, Volcker was relegated to a minor position so as not to impede Geithner and his friends at the investment banks from keeping the rest of us under their thumbs.

Volcker, in his comments (as cited in the London Times), stated that the investment banks (and their lackeys in DC) have shown no concern for how their own concentration on aggregating personal wealth plays outside the DC/NY culture. He also discussed how they are returning to their old ways that drove the economic collapse. He also talked about how both the big banks and the regulators are working together to impede financial reform that would work in the best interests of the economy, as both are pretty happy with the cozy relationship that currently exists.

It’s little wonder that Obama does not want Volcker to have real power. It works out much better for them if control is in the hands of people like Geithner, Dodd, and Frank. Unfortunately, it just works out much worse for the rest of us.