No matter how hard they try, the Obama administration can’t seem to get Paul Volcker shoved completely into the background. He was making waves today at Vanderbilt University.

Volcker had a couple of interesting things to say. First he spoke a lot of truth about the recession:

Paul Volcker, senior economic adviser to PresidentBarack Obama, said on Saturday that the U.S. economic recovery will be a “long slog” but that the rate of decline “is going to slow.”

The United States may not be in a Great Depression but it is “in a great recession for sure,” following the economy’s unprecedented tumble in late 2008, Volcker said at a financial markets conference at Vanderbilt University in Nashville, Tennessee.

He noted that no one had ever seen a decline at the rate of speed of the current one and while the financial system wasn’t comatose it was on life support. He then suggested that the role of the Fed is going to be changed as a result of the downturn.

Volcker said a review the Federal Reserve’s role, something traditionally regarded as taboo, now seems inevitable given the fallout from the long-running financial crisis.

“For better or worse, we are at a point where the Federal Reserve Act is going to be reviewed,” said Volcker.

It’s an interesting comment in that most of the talk has centered around giving the Fed more power as a regulator. This is the first comment I’ve seen that suggests that it might be stripped of some of its power. Frankly, I find that a little unsettling.

Mr. Volcker did say that he hoped that the forthcoming regulatory reform would proceed with patience and not in haste. It’s a position that I strongly support as well but I’m not sure that the realities of this century’s politics and media will allow that to happen.

Finally, the WSJ Real Time Economics blog reported that Volcker and Vice Chairman Donald Kohn went toe to toe on the Fed’s inflation policies. The old guy hasn’t forgotten the 1980’s. Unfortunately, others have and we will probably end up reliving them.

more: here (Reuters) and here (WSJ-Kohn and Volcker)