Dollars and sense
by: Kaylee Cusack
It was a turnout usually reserved for a bestselling author or a Rock & Roll Hall of Famer.
But on Monday night, the Gorecki Alumni Center was overflowing with UND students, staff, faculty and community members eager to ask questions of the regional leader of economic policymaking.
Neel Kashkari, President and CEO of the Federal Reserve Bank of Minneapolis, took a seat on the stage next to UND President Mark Kennedy on Sept. 25 for the latest Eye of the Hawk lecture – this one, a town hall conversation hosted by the UND College of Business & Public Administration and sponsored by First State Bank of North Dakota.
“North Dakotans are wonderful hosts,” Kaskari said to the more than 200 people in the crowd, which spilled into other viewing rooms of the building. “I really appreciate the hospitality you’ve shown me.”
Kaskari has led the Federal Reserve Bank of Minneapolis since January 2016. There, he oversees operations of the bank and serves on the Federal Open Market Committee as a key player in monetary policy in Washington, D.C.
President Kennedy said he was thrilled Kashkari accepted his invitation to Grand Forks.
“Only the Pope and the leaders of the U.S., China, Europe and Russia rank higher than the head of the Federal Reserve on Forbes list of the world’s most powerful people,” President Kennedy said. “Similarly, the head of our region’s Federal Reserve Bank has significant influence over the economic fate of our state.”
In 2014, Kashkari ran for governor of California. Before that, he served in a number of leadership positions within the U.S. Treasury Department, the investment management firm PIMCO, and Goldman Sachs.
Kashkari’s educational training is in mechanical engineering – he actually began his career developing NASA space technology. But his focus on Monday was more grounded.
“The reason that I’m here is to hear directly from you – what’s happening in the local economy, what’s happening in the local job market – to make me smarter, so when I go back to Washington, D.C., I can bring this knowledge back,” he said.
Bailouts, immigration and education
The crowd’s questions for Kashkari were fast-paced and constant, with topics spanning interest rates and inflation to Bitcoin and the fate of the penny.
Kashkari shared stories of the most difficult aspects of his career, including his work overseeing the Troubled Assets Relief Program (TARP) during the 2008 financial crisis, which is known for the massively unpopular big bank bailout.
“My old boss likes to joke that 60 percent of Americans are against torture … 90 percent were against the TARP,” he said to the chuckles of the crowd. “We hated that we had to bail out the banks – absolutely hated it. But it was the right thing to do. If we would have allowed the major banks of America to all collapse, we would have been in a Great Depression scenario.”
Another challenge Kashkari addressed was that of current economic growth. He noted that with an aging population that is having fewer children, demographics matter more than ever. Since a big source of economic growth is population growth, Kashkari says the U.S. has three choices.
“Number one – we can accept slower growth. Number two – we can try to subsidize fertility to have more babies. Everyone laughs when I say that,” he said, smiling. “Or, number three – we can embrace immigration to get our population growth rate back up. That’s it. Those are your three choices.”
But Kashkari really got to the core concerns of his audience when asked about student loans and how they are being addressed in America.
Kashkari noted that student loan volumes have increased dramatically over the past 10 years, and have become an enormous burden on students. But he added that skilled workers are becoming more and more necessary, meaning education is more necessary, so the country must look for ways to provide that education at lower costs.
“We need to give students as much information as possible so that they can be smart consumers and recognize if they’re taking on this debt, hopefully they’re studying something that has some hope of getting them a good job,” he said.
Eye of the Hawk
This is the third Eye of the Hawk presentation. Global public affairs consultant James McGregor explained China’s impact on the U.S. and North Dakota earlier this year, followed soon thereafter by speaker Rev. Jamie Washington, who led a discussion of diversity and inclusion in the modern era.
This kind of community dialogue was the reason President Kennedy and First Lady Debbie Kennedy developed the series.
“The Eye of the Hawk Lecture Series is driven by the belief that for UND graduates to become leaders in action, they must be aware of both how powerful forces and trends impact their world and how they can impact those forces and trends,” President Kennedy said.
Kashkari’s town hall encouraged many of the students in the audience – even those not pursuing the business or economics fields. Electrical engineering junior Nicholas Anderson drew inspiration from Kashkari’s career progression from space technology to public policy.
“He has a broad knowledge – he knows a lot about a lot,” the International Falls, Minn. native said. “I guess you could say he’s a student for life, and, especially in the position he’s in, that’s critical.”
UND Economics Chair David Flynn said Kashkari’s insights will give students – and the community – a greater understanding of how to engage in the regional, national and global conversation.
“It was a phenomenal event,” he said. “We heard the thought processes of a major policymaker in the United States, and how he goes about making the decisions that he has to make. It’s an amazing look behind the curtain.”