ARTICLE
“If the basis of the American dream is earned success, we need to have a playing field where everyone has a fair chance” according to San Francisco Federal Reserve President John Williams. As a member of the Federal Reserve System’s Open Market Committee Dr. Williams makes decisions about interest rates and the growth of the U.S. money supply which define many of the rules on that playing field. Dr. Williams will be the feature speaker at the Chamber member lunch February 28, 11:30 to 1:30 PM. Dr. William, a Stanford-educated economist, will talk about the current economic environment, Fed policy options and will respond to audience questions. There are many issues of local relevance that might be part of this discussion including housing, public finance, infrastructure investment, financial risks related to public pensions, and forces influencing the Fed’s role in managing of national monetary policy. Of course there are an array of more technical issues facing the Federal Reserve board and its Open Market Committee, especially balancing its interest rate policies to manage potential inflation in a full economy, the impact of those interest rates on employment decisions, the relative strength of the dollar in international markets, and the Fed’s need to recover some interest-rate leverage to address future economic risks. However, issues of more immediate local interest may predominate the question and answer portion of the presentation. What other issues questions might be most pertinent to local businesses and the economic community as we plan for the future? Economic equity. Perhaps this begins with what the Federal Reserve System might do to fulfill the premise of the above quotation by Dr. Williams which appears on the San Francisco Federal Reserve website. What are the key policy changes that need to be made to give everyone a “fair chance” and what is the Federals Reserve Bank’s role in those changes? Housing. Santa Cruz is consistently among the least affordable communities in the U.S. On the Chamber’s frequently-cited eleven-yard-long graph of median rents from 10,400 U.S. communities Santa Cruz appears in the first 6 inches as one of the most expensive. Housing is a local and regional crisis – as well as an issue in many other jurisdiction in the U.S. This, of course, is a complex problem, but interest rates play a very significant role in housing development. Does the Federal Reserve Bank have a role in the housing struggle and, if so, what can it do to improve housing availability? Distribution of Income. The Fed is charged with addressing both price-inflation and full-employment in developing its strategies. Analysts of the recent presidential election have talked a great deal about the political impact of declining household incomes in many areas as a significant factor in the election’s outcomes. In evaluating “full-employment,” “price-inflation,” and the impacts of its policies does the Federal Reserve Board consider trends in household income and wealth and, if so, how are they likely to be reflected in future policies? Public Pensions. Public pension administrators in California and many other jurisdiction in the U.S. are presuming rates of return that are substantially greater than their actual return on investment; as a result, pension funds are seriously underfunded. Does the Fed factor in these pension obligations into its evaluation of current and long-term economic risks and, if so, how do these risks compare with other significant exposures to financial stability? Does the Fed have any tools it can use to mitigate these risks? Regarding broad issues related to our economic environment: Dodd-Frank Act. There is a good deal of conversation about changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act. Should Dodd Frank be amended to eliminate the provisions constraining Federal Reserve Bank actions during periods of unexpected economic risk? Are there other key elements of Dodd-Frank that are particularly important to amend, eliminate or protected against legislative erosion? Financial System Security. William Dudley, President of the Federal Reserve Bank of New York, recently said that “there is more to do before we can say that we have ended ‘too big to fail.’ This is work that we absolutely must complete.” Former Forbes editor Robert Lenzner’s recent editorial letter to the New York Times reported that 70% of all commercial bank deposits are held by the five largest financial firms (JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley), that their balance sheets report assets of $10 trillion which is “roughly equal to two-thirds of the American economy, and that more than 90% of those assets are backed by debt, “with very little equity capital.” Do you think this concentration of debt and decision making is reason for concern? If so, what is the Fed’s role in addressing those concerns? Than Chamber invites you to attend Dr. Williams presentation, February 28, 11:30 to 1:30 at the Paradox Hotel. Register here.
“If the basis of the American dream is earned success, we need to have a playing field where everyone has a fair chance” according to San Francisco Federal Reserve President John Williams. As a member of the Federal Reserve System’s Open Market Committee Dr. Williams makes decisions about interest rates and the growth of the U.S. money supply which define many of the rules on that playing field.
Dr. Williams will be the feature speaker at the Chamber member lunch February 28, 11:30 to 1:30 PM. Dr. William, a Stanford-educated economist, will talk about the current economic environment, Fed policy options and will respond to audience questions. There are many issues of local relevance that might be part of this discussion including housing, public finance, infrastructure investment, financial risks related to public pensions, and forces influencing the Fed’s role in managing of national monetary policy. Of course there are an array of more technical issues facing the Federal Reserve board and its Open Market Committee, especially balancing its interest rate policies to manage potential inflation in a full economy, the impact of those interest rates on employment decisions, the relative strength of the dollar in international markets, and the Fed’s need to recover some interest-rate leverage to address future economic risks. However, issues of more immediate local interest may predominate the question and answer portion of the presentation. What other issues questions might be most pertinent to local businesses and the economic community as we plan for the future? Economic equity. Perhaps this begins with what the Federal Reserve System might do to fulfill the premise of the above quotation by Dr. Williams which appears on the San Francisco Federal Reserve website. What are the key policy changes that need to be made to give everyone a “fair chance” and what is the Federals Reserve Bank’s role in those changes? Housing. Santa Cruz is consistently among the least affordable communities in the U.S. On the Chamber’s frequently-cited eleven-yard-long graph of median rents from 10,400 U.S. communities Santa Cruz appears in the first 6 inches as one of the most expensive. Housing is a local and regional crisis – as well as an issue in many other jurisdiction in the U.S. This, of course, is a complex problem, but interest rates play a very significant role in housing development. Does the Federal Reserve Bank have a role in the housing struggle and, if so, what can it do to improve housing availability? Distribution of Income. The Fed is charged with addressing both price-inflation and full-employment in developing its strategies. Analysts of the recent presidential election have talked a great deal about the political impact of declining household incomes in many areas as a significant factor in the election’s outcomes. In evaluating “full-employment,” “price-inflation,” and the impacts of its policies does the Federal Reserve Board consider trends in household income and wealth and, if so, how are they likely to be reflected in future policies? Public Pensions. Public pension administrators in California and many other jurisdiction in the U.S. are presuming rates of return that are substantially greater than their actual return on investment; as a result, pension funds are seriously underfunded. Does the Fed factor in these pension obligations into its evaluation of current and long-term economic risks and, if so, how do these risks compare with other significant exposures to financial stability? Does the Fed have any tools it can use to mitigate these risks? Regarding broad issues related to our economic environment: Dodd-Frank Act. There is a good deal of conversation about changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act. Should Dodd Frank be amended to eliminate the provisions constraining Federal Reserve Bank actions during periods of unexpected economic risk? Are there other key elements of Dodd-Frank that are particularly important to amend, eliminate or protected against legislative erosion? Financial System Security. William Dudley, President of the Federal Reserve Bank of New York, recently said that “there is more to do before we can say that we have ended ‘too big to fail.’ This is work that we absolutely must complete.” Former Forbes editor Robert Lenzner’s recent editorial letter to the New York Times reported that 70% of all commercial bank deposits are held by the five largest financial firms (JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley), that their balance sheets report assets of $10 trillion which is “roughly equal to two-thirds of the American economy, and that more than 90% of those assets are backed by debt, “with very little equity capital.” Do you think this concentration of debt and decision making is reason for concern? If so, what is the Fed’s role in addressing those concerns?
Than Chamber invites you to attend Dr. Williams presentation, February 28, 11:30 to 1:30 at the Paradox Hotel. Register here.