Volcker: U.S. Must Consume Less

“That means more manufacturing,” Volcker said.

“There was discussion of the importance of infrastructure. And there was considerable discussion of how can we take advantage of, so to speak, the need for a green economy, where we do a lot of the innovation.”

The key, of course, is turning innovation — a major strength for the United States — into actual production, Volcker pointed out.

“There was considerable talk about retrofitting buildings, save a lot of energy, at the same time give some jobs.”

It also means that there is little reason to stop a steadily weakening dollar from falling even more, an event that would help the politicians immensely — if the government allowed it to happen.

A strong dollar makes U.S. exports too expensive for foreigners to buy. On the other hand, a falling dollar brings U.S. labor costs in line with the world, at the expense of savers and the long-term retirements of millions of Americans.

Cheaper dollars also brings billions of entitlements costs down, something politicians would vastly prefer to having to raise taxes or cut benefits.

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