Former Fed Chair Slams UN at IOP

International government is “broken” and there is no easy fix in the near future, said Paul Volcker, the former chairman of the Federal Reserve, in a speech on Friday.

Speaking at an Institute of Politics forum, Volcker expressed his views on the United Nations, international cooperation and the general status of international government.

It was a sharply critical speech, in which he voiced disapproval for what he considered a self-interested approach to international diplomacy. He advocated greater multilateralism on issues ranging from the environment and security to monetary policy, in the form of a more cooperative and powerful international government.

“That government neither exists now, nor is it likely in my lifetime,” said Volcker.

Given recent events in the financial markets and the subprime lending crisis, some in the audience wanted to hear Volcker’s opinions on the American economy.

But Volcker was reluctant to comment directly on domestic issues, though he wasn’t beyond dropping hints.

“We have been spending more in this country than we can afford,” he said. “We can’t afford to keep indefinitely spending six to seven percent more than we are producing.

“We have had a happy time in the financial markets, which have led to some considerable excesses which are going to have to be repaired. We’re going through that process right now.”

Volcker expressed doubts about the strength of the US dollar.

“A truly global financial and trade system depends upon a stable single currency. You can argue that the dollar has de facto provided that, but I think that what’s going on now raises some questions,” he said.

He also offered a dig at current finance professionals.

“Nobody knows what they’re buying or selling,” he said. “Those instruments are so complex, they take a degree of expertise that is clearly beyond those who were buying them.”