Why won’t the Obama administration listen to its most credible economic adviser?

That’s the question—and it’s an essential one— asked by The New York Times this morning on page one.

The adviser, of course, is Paul Volcker (I’m guessing you knew the most credible wasn’t Larry Summers or Tim Geithner). Volcker is the octogenarian pre-Greenspan Fed chief credited with breaking the back of the inflation that plagued the late 1970s and early 1980s. He is, as the Times puts it:

… perceived as standing apart from Wall Street, and critical of its ways, some administration officials say, while Timothy F. Geithner, the Treasury secretary, and Lawrence H. Summers, chief of the National Economic Council, are seen, rightly or wrongly, as more sympathetic to the concerns of investment bankers.

The “rightly or wrongly” hedge on Messrs. Summers and Geithner’s captivity there is really unnecessary—one of those cover-your-ass journalistic tics that can suck the life out of a story. Fortunately, it doesn’t here.

The Times notes that Volcker has been all over the place calling loudly to radically change the banking industry. Well, “radically” for this incrementalist administration. Volcker just wants to roll back the clock a decade or so to before the dissolution of the Glass-Steagall Act, that sensible piece of Great Depression legislation that prevented banks from using their customer deposits and Fed borrowings to go to the poker table.

And he also wants to end the too-big-to-fail thing—or at least lessen the risk by decreasing banks’ size. Even Alan Greenspan agrees!

Mr. Volcker argues that regulation by itself will not work. Sooner or later, the giants, in pursuit of profits, will get into trouble. The administration should accept this and shield commercial banking from Wall Street’s wild ways…

The only viable solution, in the Volcker view, is to break up the giants. JPMorgan Chase would have to give up the trading operations acquired from Bear Stearns. Bank of America and Merrill Lynch would go back to being separate companies. Goldman Sachs could no longer be a bank holding company.

But Volcker’s been shunted aside, something that’s incredibly unsurprising given the fact that Summers is in the mix.

Uchitelle ends with this revealing kicker:

So Mr. Volcker scoffs at the reports that he is losing clout. “I did not have influence to start with,” he said.

This is not a new story, but it’s an important one. Good for the Times for placing it on the the front page.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.