What is one to make of it when a former Federal Reserve chairman, who President Barack Obama refers to as the “big guy,” issues a series of blistering remarks on the sorry state of our economy?

While many contend that Americans are inundated in gloom-and-doom news, Paul Volker, a key Obama aide, recently indicated that the U.S. economy is even worse than publicized in the media.

In a Sept. 30 speech to the Chicago Fed, Volker warned that “the financial system is broken ... We know that parts of it are absolutely broken, like the mortgage market, which only happens to be the most important part of our capital markets (and has) become a subsidiary of the U.S. government.”

While the aforementioned was prominently reported in The New York TImes and other top newspapers, his explanation for how the breakdown happened somehow got left out of most accounts.

Volker — rightly — said that the problem primarily stemmed from the too-big-to-fail syndrome, bailouts and other such measures.

However, besides the “banksters,” the guilty include then-President Bill Clinton, his treasury-secretaries, Robert Rubin and Lawrence Summers; former Sen. Phil Gramm, a Texas Republican; and former Federal Reserve Chairman Alan Greenspan. As Truthdig.com editor Robert Scheer asserted, “Their success in smashing the wall between investment and commercial banking is the source of our current misery.”

In 1999, Clinton signed into law the radical deregulation (Glass-Steagall Act), which led to the melding of Wall Street high rollers’ risky bets with the federally insured deposits of ordinary folks. This action required the U.S. government to bail out the former to save the latter.

While Obama is traveling around the nation, trumpeting that the recession is over and that the economy is strengtheing, it is ironic that Volker, his advisor, is painting a contradictory (but dead-on) picture.