Former Federal Reserve Chairman Paul Volker is saying that we need to go back to separate investment and commercial banks, a return to something very much like Glass-Steagall, which Phil Gramm and His Evil Minions^™ got repealed at the turn of the century.

In the not-fed-chair-but-a-Nobel division, we have Myron Scholes saying that “blow up or burn” over-the-counter derivative trading markets if we are serious about fixing the financial crisis:

The markets have stopped functioning and are failing to provide pricing signals, Scholes, 67, said today at a panel discussion at New York University’s Stern School of Business. Participants need a way to exit transactions and get a “fresh start,” he said.

The “solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and let us start over,” he said, referring to credit-default swaps and other complex securities that are traded off exchanges. “One way to do that, through the auspices of regulators or the banking commissioners, is to try to close all contracts at mid-market prices.”

Alan “Bubbles” Greenspan must be turning over in his grave, or maybe he’s turning over in Ayn Rand’s grave, where he resides until the sun sets.