Neel Kashkari at the Minnesota Young American Leaders Program

Thank you very much.

Well, first of all, thank you for having me. It's great to be with all of you. I know some of my colleagues have been through this program in previous years and were very complimentary on the program. So I appreciate what you're doing, and it's an honor to be here with you. So the Federal Reserve is our nation's central bank, and as you said, Dan, there are 12 Federal Reserve banks around the country. That's important because that is something that makes our central bank unique. Our central bank was created in 1913, and Congress said they didn't want all of the central bank housed in the nation's capital. They wanted it distributed around the country so that all the regions of the country had a direct voice in the policy process. So there's 12 Federal Reserve banks, and then there's the Board of Governors in Washington, D.C., and together we make up the Federal Reserve System. So every six weeks, I go back to Washington, D.C. — actually more often than that, but at least every six weeks — I go back to Washington, D.C. for what are called these Federal Open Market Committee meetings, and we decide what are the interest rates that are appropriate for the U.S. economy. We're trying to balance inflation that might be too high but keeping the job market strong, and how do we balance those two things so that the economy grows kind of on an even trajectory. Well, what I'm doing in those meetings in part is talking about what's happening in our regional economy here. Now, we cannot set a different interest rate for Minnesota and for California and for New York because it's the same dollar that we all use, but we want to pick the interest rate that makes sense for the country as a whole. And part of my job is to make sure that all of you are represented in that deliberative process. So, I've got colleagues at the Minneapolis Fed. There are 1,000 of us that work there. We do a bunch of different things. We have economists who work closely with economists at the University of Minnesota to really analyze the global and national and regional economy. We have bank supervisors who go and examine banks to make sure that banks are being well-run and are protecting your deposits and that they're safe and secure. We manage cash. So if you go to your ATM and you pull cash out of your ATM, it would have started in our vault. And we have Brinks trucks that come to and from our building all day that bring currency. We examine the currency. We replace it with new currency. So there are a bunch of different functions that we do to make sure that the U.S. economy can function and that you all can go about your business so that you don't have to worry about it. But at the core, we are the nation's central bank. And we want to make sure that the economy is running on an overall even trajectory, not going into some kind of a recession or depression if we can avoid it, but also not overheating. And obviously, we had very high inflation the last several years. It's our job to get inflation back down. We've been making a lot of progress at that. We want to finish that, and we're probably going to talk about it. Tariffs and these trade uncertainties have thrown a curveball at us that we're trying to monitor very carefully.

Well, our region looks a lot like the nation as a whole, meaning our region is very diverse economically. Most major industries in the U.S. economy are represented here — commodities, manufacturing, healthcare, services, etc. So when one of those sectors is down for its own reasons, there's a good chance other sectors are going to be doing better, and that makes our regional economy more resilient, just like the national economy is very resilient overall. So that serves us very well. Coming into this year, in the early part of this year, the economy's been on very good fundamentals. The unemployment rate was still quite low historically, around a 4%, 4.2% unemployment rate. Inflation was coming down. We kept getting surprised at how strong economic growth was. So the fundamentals have been quite good the last couple years. And we've been bringing inflation back down. Not all the way where we need to get it to. We need to get it to 2%. It's running at around a 2.5% rate, but we're making progress. Now, there's big uncertainty now that's been introduced because there's global tariffs and trade wars that are going on right now. And where are these going to land? What are the net tariffs going to be when all of this is done? How long is it going to take to get there? We don't know right now. So, we talk to a lot of businesses large and small all across our region, and they're basically saying they're on hold until they get clarity. If you want to build a new factory, where do you build it? Do you build it here? Do you build it in Vietnam? Do you build it in Mexico? Do you build it in China? Well, where the tariffs between all of those countries end up settling is going to really affect the economic return on that investment that you make. And so if you don't know the answer to that, businesses are saying, 'Hey, we're just not going to make that investment right now until we get clarity.' And so there's a lot of uncertainty that we're trying to navigate. Businesses and individuals are navigating, and we as the central bank are also trying to navigate it as well. And so it's really just wait and see until we get more information.

You know, one of the most common comments that I hear from businesses all around our region is that they can't find the workers that they need. They're saying, 'We would like to invest more, we would like to expand, but we don't know how we're going to staff up this new factory or this new operation that we would like to have. And so, where are we going to find the workers?' So, a lot of them will point first to, hey, the country needs to fix its immigration system so that we can bring in the workers that we need. Whether it's workers on farms, workers in factories, workers in hospitals, workers in technology centers, all across the spectrum. That's a common refrain. By the way, I hear that from our elected leaders on both sides of the aisle, too. And I always point out to them, I say, 'You know, your counterpart on the other side of the aisle told me the exact same thing. Maybe you all ought to get together because you all seem to agree on this point.' But another piece of this, and it goes to the opportunity gaps, is a big swath of our folks who are already here are not getting access to the equal opportunities to give them the skills necessary so they could fill those jobs. And so that's the challenge that I will say back to business, which is yes, it's great that you are trying to find the workers that you need, but just to remind you — and they already know this — look in your backyard because there are a lot of folks here who, if they had the skills, would like to take the kind of jobs that you want to make available. And I'll give you an example. When I got here in 2016, a lot of businesses were saying that they can't find workers, can't find workers, and my colleagues and I at the Minneapolis Fed would go into lower-income communities and we'd find folks who say we don't have jobs or we're stuck in part-time jobs and we want full-time work. And it was curious because an hour earlier I was in a meeting with a bunch of businesses who said, 'We can't find workers.' So there were potential workers that were available, but there were bridges that needed to be built and in some cases skills that needed to be enhanced so that folks would be ready to take those jobs. And so that I think is the overarching message that I would have for Minnesota: we do have huge, huge opportunity gaps, and it starts in education. If you just look at the data, huge education disparities in the state of Minnesota. Some kids — your kids, my kids — have the fortune to go to very high-quality public schools in Minnesota, wonderful education opportunities right down the street. A lot of kids don't have that opportunity. And so for me, I would just say start there.

You know, one of the things about public service — and the Minneapolis Fed and all of the other reserve banks and the Board of Governors — these are deeply mission-driven organizations. People who choose to come there choose to come there because they believe in the public service mission. And when you are working with and leading a group of people who share the same goal, share the same mission, it's incredibly empowering because you're not fighting with each other about where we're trying to go. You might be arguing about the best way to get there, but you at least agree on the destination of where you're trying to get to. So that's very powerful. And when you're working across organizations to other organizations, I guess this is obvious: you've got to try to align with organizations that share your vision, share the goal that you're trying to get to. If you're fighting with somebody over, hey, should we go right or should we go left, you're not going to make a lot of progress. But if you can all at least agree, hey, this is where we all agree — we want to close these opportunity gaps, we want to make sure that young people in Minnesota, no matter where they grow up, get a great education — yep, we all agree on that. Great. Now, let's work together and bring the best ideas forward. And so, I just think aligning with other organizations that share your goal and share your destination is a great starting point. And if you can do that, then I think it can be incredibly powerful in making a lot of progress. Too often I see organizations fighting with each other — in the profit sector or nonprofit sector — when they're competing with each other and they've lost sight of what is this goal that we actually are trying to work towards. In the nonprofit sector, I see it a lot, and it's particularly frustrating because they all say, 'Hey, this is the goal that we're trying to get to. We're trying to serve this greater good.' But sometimes the personalities and the competitiveness gets in the way.

You know, my career journey has not at all been planned, because of the kind of random turns that I've taken along the way. What's been constant is my interest in pursuing things that I think are really important and challenging. If it's important but not challenging, let somebody else do it. If it's challenging but not important — like let's say climbing Mount Everest — that doesn't appeal to me. But if it's important and challenging, then I'm excited about that and I want to pour myself into that. And that has led me from engineering to business to the government and the Fed. Now, along the way, I've been willing to take career risks that I think many of my peers were not willing to do or were nervous to do. You know, when I was an engineer, I had done my bachelor's and master's in engineering and was working in R&D. My managers were encouraging me to get my PhD. And I talked to them, well, what about getting an MBA? Well, maybe you go part-time. And I said, 'No, if I'm going to go do this, I'm really going to go do it, and I'm going to quit my job, and I'm going to go full-throated, get a business degree, and then learn about business.' When I was at Goldman Sachs after business school, I was doing well. I'd been there for four years. There was a long story, but there was a chance to go to the U.S. government, to the Treasury Department. People around me thought I was crazy. Why would I give up my Goldman Sachs career to go work in government? That's crazy. And I said, 'No, you're crazy. You don't get it. This is a once-in-a-lifetime chance to get to learn and serve.' And so I think in some of these key moments, I was willing to take risks and willing to set aside the influence of my peers. And you know, one of the things I found throughout my career, peer influence is very powerful. And it's not just when you're a kid that that's true. Even as you get older, it continues to be true. And I was able to recognize it and say, 'Yep, I get it. All the people around me are choosing to go this one direction. That's not a dumb choice that they're making. That may be a very good choice, but I can look at that, recognize it, and say no, I'm going to nonetheless go in a different direction.' And so anyway, this is nothing profound other than willingness to take risks about things that you care about and then pursue it and then have enough confidence that you'll land on your feet if it doesn't work out.

You know, I don't view it as a threat to — I mean, it'll be a threat to individual jobs, but I don't view it as a threat to jobs as a whole. People have been forecasting the end of labor for as long as people have been forecasting. Right? When 150 years ago, the vast, vast, vast majority of Americans worked on farms, and then automation and technology came into farming. 'Oh my gosh, everybody's going to be unemployed.' No, the jobs changed and then they moved into factories. And so, now don't get me wrong, if you're one of the individuals who is getting laid off by Microsoft, this is a big deal. All right? So, I'm not dismissing that at all. But I'm saying for the U.S. economy as a whole, I'm very bullish on the competitiveness of the U.S. economy and that there's going to be a lot of jobs in the future, but the jobs are constantly going to be changing. And so I'm excited about it. You know, I ask people, how many people have used an AI tool in the last week or last day? And usually when I ask them in a big audience, almost every hand will go up. You know, I use it all the time now. I used to go to Google for search and now I go to Grok for basic questions and it gives me much more thoughtful, directed answers knowing the actual question I'm asking. And so I think it's incredibly powerful and I'm just at the tip of the iceberg of what you can do with this. So I'm excited about it. I think it is going to lead to disruption, but I think net-net it's going to be strongly positive for the U.S. economy.

You know, this is a great question and it's a complicated question that's going to take a long time to sort out. Let me give you an example why. So you framed the question correctly. Financial crisis hits in 2008. We have essentially almost like a jobless recovery for 10 years. It took 10 years for the labor market to recover after the heart attack of the financial crisis in 2008. Now in contrast, COVID hits, we also have a huge unemployment crisis, and the job market recovers in a couple years, and then all of a sudden we have a problem of high inflation. So we didn't have any inflation coming out of the financial crisis. Instead we had almost a jobless recovery, a 10-year recovery. The other side, after COVID, we had a very quick job recovery and we had very high inflation. So what could explain the two differences? Now, one was a financial crisis and one was a pandemic. So the source of the distress in the economy were fundamentally different. So that's got to be part of it. Part of it also is the government's response was so different. So coming out of the financial crisis, there was — I was in Washington at the time in the Bush administration and then the Obama administration — there was this intense, overwhelming feeling of fairness and unfairness. Meaning, hey, a bunch of bankers made loans they shouldn't have made. A bunch of homeowners bought homes they shouldn't have bought. Why am I going to bail them out? And so that view, in my view, led Congress and it led the executive branch to give relatively modest fiscal support to the economy. So some economists say because the fiscal support was modest, the recovery was slow. Fast forward to the pandemic. Nobody thought the pandemic was your fault or my fault or your fault or your fault. There was this global pandemic hitting us. It was not the American people's fault. And so because there was no sense of fairness or blame, let's err on the side of being way more generous. So in contrast, the fiscal support and the monetary support after the pandemic was much bigger than it was in '08. So some economists say, hey, in '08 we did too little support and we had a jobless recovery. In 2020, maybe we ended up doing too much support, but the benefit was we had a very quick job market recovery and yet we had very high inflation, which people were really unhappy about. And that's why I'm not punting the question. It's a complicated question that I actually think is going to take a lot of analysis over many years to figure out why were the recoveries so very different. And in an ideal world, we would have a fast job market recovery and no inflation. And we haven't figured out how to do that yet.

You know, it's another very good, very complicated question. It's almost a philosophical question, which is what leads societies to be happy. And it is unambiguously true that there has never been a better time to be poor in America than today. Unambiguously true. Being poor in America today is way better than being poor in America 30 years ago or 40 years ago or 50 years ago. And yet the gaps are bigger. And so the question is — this is a philosophical question not for a central banker but for the country — do we care more about absolute levels of health and wealth and security, or do we care more about distributions of health and wealth and security? And when I go to other countries — my wife is from the Philippines. And when I go to the Philippines, my wife's family is middle class in the Philippines. They're doing fine. But you know, one of my nieces who was 16 years old at the time, she made this observation. She said, 'You know, a lot of the angst in America is because you have it so good.' And I said, 'Wow.' Yeah, that was a pretty insightful comment for a 16-year-old girl in the Philippines on the other side of the planet. Basically, a lot of the stuff that we're screaming at each other about, most of the rest of the world will say, 'Wow, you guys are screaming about high-class problems compared to what most of the world is facing.' And so, that's why I think this is at the root of this. It's a little bit of a philosophical question. And I'm in no better place to answer that than any of you are, probably in a worse place to answer it than all of you are.

You know, it's a huge challenge. And I am concerned about it. I think in my memory it started with the financial crisis, which is people like me or my predecessors told everybody that free markets are terrific, that markets don't make mistakes, that less regulation is better, and then markets turns out can make mistakes, can sometimes make very big mistakes. And you had an '08 financial crisis where the U.S. economy was on the verge of collapse because the financial system made a bunch of bad investment decisions requiring the government to come in and bail out the banking sector. And I mean those bailouts that I led — just to be fully transparent, I'm not pointing the finger here, the finger's here — those bailouts really violated core American beliefs of fairness. You know, you take a risk, you get the reward, but if you take a risk, you bear the consequences. The problem with that is if we let that happen, then you would have been plunging the country into a depression scenario. And so I think that was the first shock of, hey, the experts told us this couldn't happen and now we're having to bail out a bunch of people who made the mess in the first place. That's deeply unfair and that makes me question experts. Then not long — in a short arc of time — we have a pandemic hit that is also nothing none of us in our lifetimes have faced anything like that before. Tremendous uncertainty about how deadly is this virus, how do you treat it, will vaccines ever be available, the shutdowns of the economy, huge anger, huge uncertainty about that. By the way, the experts got some stuff wrong. Experts do get some stuff wrong. It's the nature of things. Nobody knows all of this stuff. It's all new. And so, all of it adds to more anger and more uncertainty. And one of the frustrating parts is if you're an expert and you're wrong one time, two times, three times, people will say you know nothing, then they go to Facebook and this guy on Facebook was right one time. He happened to have been right one time. See, he knows as much as you do. And that's a very difficult thing to fix. And so it is something that I'm very concerned about. So, I think the best we can do is just be honest and transparent about what we know, what we don't know, where we're taking our best shot, and then if we need to adjust because we got something wrong, own it and say, 'Hey, we got this wrong. Here's why we got it wrong, and here's how we're going to try to do better going forward.' I wish — if you have suggestions for me on what else we could be doing, I'm all ears because it's a real challenge.

Boy, I don't have a ton of insight. I know that my impression, and we can follow back up with you when I talk to some of the experts back at the bank about how that is actually calculated. My impression is it has been updated over time because one concern that I had was, is the definition of poverty a percentile, which is, hey, there's always going to be somebody in the bottom 10 percentile. And I was so I was explained no, that is not a percentile basis, that there is some type of absolute measure of what does it cost to maintain a certain quality of living. But let us come back to you because I don't want to give you something that's totally wrong. So I will follow up with you afterwards. And my colleague is here who will help me follow up with you afterwards.

You know, it's another, you all have very good questions. It's another very good, very complicated question. And let's, I'll give you a little bit of insight into it. We have around 100% of debt to GDP. And by the way, this is not the domain of the Federal Reserve. This is entirely up to Congress and the executive branch, but I'll just walk you through the math of how it works. The country, the government has about 100% of debt to GDP, and there are many countries around the world that have gotten into a lot of trouble with 100% of debt to GDP. Meaning they take on too much debt, people lose confidence that they can ever pay the debt back, and then the interest rates go up and then they end up in some kind of a crisis. Argentina is an example of that. That's happened many times. In contrast, Japan has twice as much debt to GDP as America has and has had no trouble financing itself. So, what determines whether or not 100% of debt to GDP is a problem or not? The answer is do investors around the world have a lot of confidence in your country, in your political system, in your rule of law, in your innovation engines that you will be able to support that debt over time. And so right now, if you go into the tariffs and the trade war, how is this all going to settle? You know, we don't know right now. So, I think right now there's a question mark being raised about what is the US's long-term competitive position going to be relative to other advanced economies around the world. So, there's more of a question mark than there was a year ago or two years ago. Ultimately, we need to see where that all settles. And ultimately, how will it end up revealing itself? It will reveal itself. It will express itself because investors are going to say, 'Hey, you know what? If the government wants me to loan them money, which is what a bond is, I want to be compensated with a higher interest rate. Before I'd demand a lower interest rate. Now I want a higher interest rate.' And you'll see that as bond yields go up, that's an expression of investors saying, 'We're a little bit nervous about where this is all headed.' And if interest rates go up in America but then they don't go up for other advanced countries, then you might conclude, hey, investors are saying I'd rather invest in Europe than in America. I'd rather invest in Canada than in America or Japan than in America. So it's not simply up to what happens at home. It's what happens at home relative to what happens in other countries because investors have choices where they want to invest.

Boy, that's a, I've not heard that question before. I need to think about it. Congratulations. My guess is there's not, so this is the domain again. This is Treasury's decision what denominations they want to have and we will implement whatever they choose to do. I think the motivation for eliminating the penny is they say, 'Oh, it costs so much to produce pennies and to process pennies that it's uneconomic for the US government to do that.' You know, when the Treasury prints $100, that's a profitable investment because $100 bills are in demand all around the world and so they in a sense make a profit off of the $100 bills that they supply into the global economy. I think the argument is that they lose money on every penny that they mint and so why do they want to be in this money losing activity? My guess is it won't have a big effect on the economy. You won't notice it in the economy. You might notice it in the way things are priced because now if there are no more pennies around, you can't price things down to the penny. And I'm sure there's going to be some folks who are going to be sad like, where's Lincoln going to go, right? I mean, Lincoln deserves a place on some coin. So, how are they going to address where Lincoln is going to go? So, I'm sure there are going to be some passionate people who want to retain the penny for lots of reasons. My guess is it's not going to have a big effect on the economy.

I mean I'll say, this is like a plug for engineering. I use my engineering training all the time because at the root of what engineering is, it's not the thermodynamics or the fluid dynamics. At the root of what engineering is, it is problem solving. At the root is you have a problem, you have certain tools. How do you use these tools to address this problem? That's what engineering is. And that's what policymaking is. And so at the Fed, we have certain tools that are in our control, monetary policy or bank supervision. And how do you deploy those tools to address some underlying problem in the economy? Sometimes we're doing analysis to try to inform other policymakers that have control over the tools. So our economists will do lots of wide-ranging economic analysis on important topics that are important for the economy even though the Fed has no ability to control or influence how that research is used. Our hope is though that state legislatures or municipal governments or the federal government, they'll find the analysis useful and then they'll put that to work and they'll pull the levers that they have. And so policymaking is about here's a problem. Here are the tools we have. How do we deploy these tools to address those problems? Or if you don't have the right tools, how do you get access to the right tools to do that? And so I feel like my engineering training was great preparation for that.

Yeah. So that is all about, everything you said is right. It really is about immigration because most of our entitlement programs are funded by current workers paying for current retirees. And as that ratio goes imbalanced, then those programs are no longer solvent anymore. And so at that point, you can either try to raise taxes to cover it or cut benefits to try to balance those programs out. And so immigration has actually fueled the US economy and is a way to get the population growth going again to try to meet both for the fiscal side which I just described but also to make sure that farms have the workers that they need, that factories have the workers that they need, etc. So the demographic trends that you described are correct. It's happening in many countries around the world, almost all advanced economies this is happening and we're relatively better off but even we have a challenge just like you said. So if you look at China for example, the forecast of China's population is one of population collapse over the next 50 years. That is a profound challenge for China and unlike America, immigration is not really an option for them culturally. We're not perfect at immigration but we're pretty darn good at it relative to the rest of the world. Many countries, especially Asian countries, Japan faces this too, China faces this too. They're so culturally resistant to immigration, they simply do not have it as an option. So what they've been trying to do is bribe families to have more babies and it doesn't work. Countries around the world have been trying. It does not work. And so how do you encourage people to have more kids? Immigration is a tool that America at least has and Canada has and Australia has and the UK probably has, but many countries do not have it. And so it goes back to finding some political consensus to design an immigration system that meets the needs of our economy.

Yeah. No, it's real. I mean, I traveled around our region. It's absolutely true. A lot of communities are concerned for good reason that, you know, their young people go off to college and then go off to career opportunities and then their towns are shrinking and what's going to happen to our towns. What's the future of our towns? So, a couple dynamics, sources of optimism. One source of optimism is some towns have been able to pull an immigration lever to really feed that town and have restarted the towns and got it growing again based on immigration. Now they can't do it by themselves because you have to have federal policy and state policy that supports that. But where they were able to do it when it worked it actually was transformational. I will say in some of those towns, the few towns that have done it well, it creates challenges because it changes the dynamics of the town a lot, but I always say to people, well, would you rather have a town that is shriveling up or would you rather have a town that is growing? And growing in a new way is better than no town at all. And so, some towns have been able to embrace that and figure out how to do it. The other piece of this which is coming out of the pandemic is that the availability of broadband and remote work and remote services has now been a new source of optimism for many small towns. And a lot of money has been put at broadband from both the federal government and the state government to make sure that broadband is available all across the state. I know it's not done yet, but there's a lot of money going into it. I think that also opens up new potential because a lot of the young people that I hear, they grew up in a small town, they went away to college, they went away for their job. A lot of them would actually like to come back. They say, 'Well, I'd actually like to raise my family there if I could get a job there.' And so, it's possible that technology is going to make that more available in the future, so that town is not as much of a disadvantage as it was historically, but it's very real.

I'll answer the one you want me to answer. I try to pick our spots, which is do we think, a couple things, we have a dual mandate that Congress has assigned to us. One is maximum employment, the other is stable prices. Is understanding this issue fundamental to us understanding either parts of our dual mandate. And so if you actually look at the Minneapolis Fed going back 20 years, the Minneapolis Fed has done work on education and early childhood development. And the root of that was, hey, if we want to understand what does maximum employment really mean, we need to understand what education people are getting, who has the capability of working and contributing to our economy. And so it really is rooted in our maximum employment mandate. One thing I'll give you an example that I have not spoken out much about, not because I don't think it matters, is climate change. I look at our economic analysis. If climate is changing, I can see it, but it's, you know, the monetary policy kind of works over a three to four year horizon before the economy kind of gets back to something like normal. Climate change is just kind of a longer term, slower trajectory. And it is not at all obvious to me that our economic analysis of the economy over the next two to three years relates to the climate or the climate relates to the next two to three years of the US economy. So that's an example where I just said yeah I think it's an important issue but it is not obvious that I or my colleagues have any special insight to bring to bear on this topic. And so that's an example of something I've said no I'm not going to speak out much about just because I don't see it. Another thing I have spoken out a lot about is cryptocurrency where people ask me about it all the time and I say, 'Hey, it's been 15 years and so far Bitcoin's utterly useless other than circumventing banking regulations.' Now, the Bitcoin bros get really mad at me when I say that. That's one where I've spoken out very loudly about because that is core to, I think that's much closer to our mandate. And I think I have something relevant to talk about.

Yeah, it goes back to the question earlier a little bit about loss of trust and experts. And I think the University of Minnesota is a jewel for Minnesota, for the economy, for the future of Minnesota's economic competitiveness. All of the higher ed system is. But I also think the University of Minnesota with its research focus is especially a precious jewel that needs to be protected. But when you go out and you meet people across the district, there's a lot of angst about it, frustration about it. Could be that hey, you know, either their child wasn't able to get admission in the University of Minnesota, which is a source of frustration, or boy, it's taking up a lot of resources, etc. So I just, it's kind of the advice I gave to myself which is just be transparent about what you're trying to do. Explain it. People who have an open mind will give you a chance to explain the value proposition and why it matters. And then just focus on that and even for me try not to get distracted by other things and just kind of focus on the core mission. Yeah. For universities it's kind of, I see a two-part thing. Maybe it's multi-dimensional. One part is preparing young people with the basic skills to be successful in society and life. Another is giving them specifically relevant skills so that they can be successful and get a job, take care of themselves, provide for their families. Those two things are complementary but not identical goals. And so just keep focusing on that. And I mean if you look at the US's economic competitiveness, one of the sources of our national economic competitiveness relative to every other country in the world is our university system. Right? We've been able to attract the best and brightest from around the world, in many cases keep them here, investing here at home, do the cutting edge research. And I think our universities including here are incredibly special that we need to protect and invest in.

You know, there do appear to be lots of those patterns that you're talking about. Some of them are concerning. So, for example, the '08 crisis, which I was right in the middle of, was a once in a hundred-year event. Then 10 years later, COVID, another one in a hundred-year event. It's like we keep having one in a hundred-year events. They're different events, but they keep happening. It's like they're not supposed to happen this frequently. So on one hand that's concerning and frustrating. Another piece of this, there's a professor at Harvard, Bob Putnam, who's written a lot about this, brilliant guy. He looks at, I'm going to get this not exactly right but just bear with me. I'm going to get close. He looks at measures of collectiveness in society. So for example, how often are people belonging to community groups whether it's a bowling league or it's a church group or it's the PTA or it's the Rotary Club, different types of community organizations. And he sees that 100 plus years ago, 110 years ago we were at a relatively low point. It was in his view, not his words, but his view, a relatively me society, individualistic society. Then it became more of a communal society over the next 40 or 50 years. And the peak was when President Kennedy said, 'Ask not what your country can do for you. Ask what you can do for your country.' Robert Putnam says that was not the beginning of a new era. That was the peak, the end of an era. And then we went back down. And you look at all of these different measures. He has the most remarkable charts. You can Google it. He has all of these charts showing the same thing going up for 50 years and then down for 50 years. And we're at one of those low points now. We're on many, many, many measures. We are an individualistic society rather than a collective society as we were 50 or 60 years ago. So he maps this out and it's fascinating how pervasive this is, but he doesn't have a prescription. Like what causes it to turn around? What causes us to say, you know what, let's all lock arms and be in this together again. That I don't know. So there are certain things like COVID every hundred years, financial crisis every hundred years, and then there's this other arc going on that I'm sure is influenced by those events as well. So I look at it, it doesn't tell us much about what we should do with interest rates next month but it's fascinating.

Yeah, it's very complicated and it's very, one of my observations is very hard to scale. So usually it ends up happening where it's successful. An individual company will partner with a community college and say these are the jobs I need. These are the skills I need. Help me fill these jobs. And then they together will design or customize a program to build that pipeline into that company. And that can work, but it's hard to say, well now do that a hundred times because each of those relationships is uniquely designed. From the monetary policy perspective, one of the things that I've learned is a hot labor market is profoundly important because it forces businesses to do things they wouldn't have otherwise done. You know, in some cases they'll say, well, can't find anybody because my screening is the way I've always done my screening. Well, then they adjust the screening and it's like, well, you know what? Take testing for marijuana. All right. There are certain jobs that businesses have said, you know what? I actually don't need to do that test anymore. They're not driving a forklift. They're not driving a truck. They're not driving a car. I don't need to kick people out for this thing that is actually not relevant to the job that I'm actually applying for. So, it turns out a tight labor market is an incredible motivator for businesses to get rid of the restrictions that they've just had forever that may no longer be relevant for that job. So, I think that's part of it and that's the Fed's job to try to get us back to a place where inflation's all the way back down and hopefully we can continue to have a tight labor market. I'll give you one more example of this. I was talking to, during COVID after the economy was reopening and the unemployment rate fell down to 3.5%. I was talking to the gentleman who runs the gas station near my house and he had a help wanted sign up and I said, 'What's it like trying to find somebody?' He's like, 'It's impossible. There's nobody out there. Nobody wants to work. It's impossible. We're short staffed.' And I said, 'Well, what is it normally like?' He said, 'I've been operating gas stations for 30 years. I've never seen this in 30 years.' I said, 'What is it normally like?' He said, 'Normally, I put a help wanted sign out and that day I have a lineup of people I can pick from.' It just struck me, why is that normal? Okay, we can agree that the extreme of COVID is not normal where he simply cannot find anybody no matter what and he's raising wages. But why is it normal that a gas station puts a help wanted sign up and he has a line of people to pick from? That can't be normal either. So to me, if we can get to an economy that is a competitive labor market where businesses are having to work hard to find the workers, that's a healthier place to be because then they will lower some of the barriers that they don't actually need anymore and it's going to bring more people in.

So did one of my colleagues put you up to that? No. So when the pandemic hit in 2020 and Congress is allocating a lot of money to support the economy, one of the things that the US Treasury figured out is they didn't know much about tribal economies. So they wanted to design programs. The money was there. How do you design programs to meet tribal economies? So we have a research center at the Minneapolis Fed. That's why I thought one of my colleagues put you up to this. I know that. Okay. You knew something. I knew there was more there. We have a research center at the Minneapolis Fed focusing on analyzing and understanding tribal economies. So, Treasury called us and said, 'Can you help?' And we dispatched some people to Treasury to help them. But one of the things even we learned is that we don't have all the data we need to understand how tribal businesses are structured. So, it's not a C corporation, it's not an S corporation. This is an enterprise owned by the tribe. What are the tax implications of that? You know, so one of the things that we've now launched is we've launched a nationwide survey called the Survey of Native Nations where we're partnering with tribes all around the country to collect their data in an organized, systematized way to make it available with appropriate controls around it so that other policymakers have access to it. So that they know if they want to design a program that tribes can use, they now can have some confidence that hey, tribes will in fact actually be able to use this. Here's how many people it could affect. Here's what the return is. So, this is early on, but it's a long-term initiative that we've undertaken because we are in a position where we've earned the trust of many tribes who are willing to trust us in partnership with their data and we're excited to try to play this role, but it's going to take time.

Thank you for having me. Really appreciate it.