Volcker shares economic views in Steamboat
Former Federal Reserve chairman talks about challenges facing US
July 23, 2010
■ Aug. 5: Paul Peterson, professor of government at Harvard University and senior fellow at the Hoover Institution at Stanford University: Saving the American School
■ Aug. 12: Joseph Nye, professor of international relations and former dean of the Kennedy School at Harvard University: Smart Power — America’s Global Position
Learn more about Seminars at Steamboat at http://www.seminarsatsteamboat.com.
Steamboat Springs — It was a packed house Thursday at the Strings Music Pavilion, where many people arrived hoping to hear economist Paul Volcker's answers to some tough questions about the state of the economy in the United States.
Volcker, the featured speaker at the second event of the summer Seminars at Steamboat, drew 750 people, many of them sitting or standing outside the building. The crowd listened to Volcker's views about the state of the U.S. economy, the new financial reform bill and how the current government is handling the many challenges facing the country. The audience left understanding that there will be no easy or quick solutions.
Volcker expressed some frustration with the current political climate in the United States that has added to the problem. He said both political parties share the blame and will need to come together for the country to move forward.
"I felt he answered honestly that there are no easy answers," said Juli Marley, who works in the financial industry and owns a second home in Steamboat Springs. "I'm in the same camp in that the recovery is going to be a very slow and long, protracted recovery. There is no silver bullet. He talked a lot about the diverseness of both parties today and how that needs to come together to solve the problems."
Volcker, the chairman of the U.S. Federal Reserve under former Presidents Jimmy Carter and Ronald Reagan and now an economic adviser to President Barack Obama, said the economic problems in the United States were created by factors including the nation's consumption.
"The economy is not in very good shape, as you know," Volcker said. "We are not in what we consider a normal recession where the economy gets a little over-exuberant in one direction or another, prices are going up, money gets tight and the economy is down for a while and then we bounce back. This is not a bounce back. We are suffering from some very large, undermining problems."
One of the biggest problems, Volcker said, is that the country has been spending more than it has been producing for years. The over-consumption led to debt that has resulted in the current economic instability. Volcker also talked about his role with the new financial reform bill and the positive impacts he thinks it will have on banking in the U.S.
Carter appointed Volcker chairman of the Federal Reserve in August 1979, and Reagan reappointed him in 1983. The Federal Reserve, under Volcker's leadership, is widely credited with ending the stagflation crisis of the 1970s. Inflation, which peaked at 13.5 percent in 1981, was lowered to 3.2 in 1983.
Bob Stein, who is on board of directors for the Seminars at Steamboat, said he was thrilled to have someone of Volcker's fame speak in Steamboat Springs.
"The turnout for a person as well known as Volcker was what we had hoped for," Stein said. "The pavilion accommodated everybody beautifully."
Stein said it was nice that the weather was good and that the people who were not able to get inside the pavilion also were able to enjoy the presentation.
"There were a lot of good questions," Stein said. "They were policy questions, which is what we want, rather than political questions."
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