Q: What will be the long lasting impact on the US and world economy of the current crisis?

A: The big challenge for the US is to change the structure of its economy. We need to improve our export ability and capacity. That means more manufacturing. In the last decade we have had the free availability of credit and the great willingness to consume while letting the capacity to produce languish, in particular our manufacturing capacity.

Sooner or later we have to produce something we can sell to the world. That has been declining and the big challenge as I see it, is to stop that decline and regain some lost ground and weaning the consumer away from excessive consumption. We cannot rebuild our economy by trying to get back to 70 percent consumption or housing booms. It will just break down again.

The US can take advantage of the need for technological process in areas such as global warming and environment where there should be big new opportunities. I rather have the feeling the US is inventing some of those opportunities and other people are implementing them. We have to do some implementing of our own in the US too. Windmills and solar panels are an example. Neither of them is going to solve the energy problem, but they are becoming more important. There is a lot of talk about those in the US and also a lot of technological work in those areas, but too much of the production is done elsewhere. We need to get some of that production back to the US.

Q: How?

A: We have to develop some economic forces that will move the US in the direction of more export and less import. One large economic force moving us in that direction are the emerging markets. They are doing very well so their ability to import is growing and as they reshape their economies towards more consumption that will help solve our problem. That process takes a long time, but there is no alternative. Economic forces will force that adjustment eventually.

David Fuller's view What distinguishes Paul Volcker from so many of the rest is his combination of intellect, common sense and unwavering moral compass.

Most people in leadership positions have intellect. A majority probably have common sense. Far fewer have a reliable moral compass.

This interview with Paul Volcker reveals some of the intellect and plenty of common sense. Search the Archive under 'Volcker' and you will find earlier postings which reveal the moral compass.