October 12, 2016 | noon
By Whitney Bak ’15, content specialist
President and CEO of the Federal Reserve Bank of Minneapolis Neel Kashkari joined Bethel Professor of Economics Tim Essenburg for a Q&A session on the Underground stage in front of a packed crowd of students, staff, and faculty. The visit has garnered widespread media attention, earning Bethel a mention in The New York Times DealBook newsletter, among other major news outlets.
During the event, which took place on October 11, Kashkari spoke on topics including his switch from working in engineering to finance, unemployment rates and economic disparities in the U.S., and how he anticipates the public will respond to his upcoming paper and bold stance on banks that are too big to fail. Kashkari also requested ample time at the end of the moderated Q&A to interact with the audience, and encouraged everyone to ask him “tough questions.”
Dean Junkans, an adjunct professor in the Department of Business and Economics, was the primary coordinator for the event. “Personally, I think that the more we can expose students to key public or private figures in areas they are learning about in the classroom, the more we will help them bring the subject area to life,” he says.
In his previous role as chief investment officer for wealth, brokerage, and retirement at Wells Fargo, Junkans had encountered Kashkari—who was also working in the private sector—on numerous occasions, and so he thought to reach out to him about speaking on campus. “He’s the only Minneapolis Fed president who has shown interest in engaging with the community,” Junkans says, going on to explain how Kashkari’s experience with both public service and private business gave him a well-rounded perspective that was beneficial in helping students “connect the dots” with their studies.
And Kashkari was truly a fountain of information. After a brief introduction about his background, including his upbringing in Akron, Ohio, his work with NASA as an engineer, his decision to pursue an MBA, and his career in both the private and public sectors, Kashkari went on to explain how his personal experiences have flamed his passion as a public servant. “I have literally lived the American dream,” he says. “Middle class kid, son of immigrants…but the key to my own success was that my parents saw to it that I would get a good education.”
Because he recognizes the opportunities afforded him in his own upbringing, Kashkari advocates that education is the key to breaking “multigenerational cycles of poverty.” And though he concedes that the Federal Reserve can’t solve all economic problems with monetary policy, he does think that they can play a larger role in helping struggling communities. “We have a lot of smart economists at the Fed, and if we can unravel this riddle of why these different racial groups experience different employment outcomes, then maybe we can educate other policy makers—like Congress and others—that they can take actions to try to make sure that we have a level playing field for everyone.”
Kashkari’s belief in equality and education is central to his political views. In 2014, Kashkari ran for governor of California under the slogan, “Jobs and education. That’s it.” During the audience Q&A at Bethel, he expanded on some of the lessons learned during his run that effect his views today. “I went to Fresno, which is the highest unemployment city in the state, and I lived homeless for seven days,” he says. “I couldn’t even get a job. It reinforced for me [that]…when people fall off the path, or fall off the system so to speak, it can be very hard to get back on your feet.”
Which is why he encourages Bethel students to stay the course. “My own experience is that life is long, and that you can do lots of different things,” he says. “Your first job is not your most important job. It’s not the end of the world if you don’t get the dream job right out of the gate. It’s what you do with that job…the key to your future career success is you want to be the person that gets more responsibility.”
But throughout the session, perhaps the biggest question on everyone’s mind was: Should we be worried about another financial crisis? Professor Essenburg addressed concerns over the risk for financial “bubbles” similar to the one that caused the 2008 housing market crash. During the crash, Kashkari was working for the White House as the assistant secretary of the treasury for international economics and development, and he played a major role assisting with government bailout efforts. “It's a very, very tough thing,” he says. “If I go back to what caused the 2008 crisis, at its root we had a nation-wide delusion that home prices only go up…but I am humble about our ability to have the confidence to quash [future] bubbles.”
And ultimately, he hopes that his coming proposal, set to be released before the end of this year, will be just the thing to make a difference. Since entering his current role, Kashkari has taken a stance against banks that are too big to fail—or so large that the economy depends on their success. And though he recognizes that “sometimes things take a long time before they take a short time,” he remains hopeful that “people will pay attention” to the Fed’s recommendations.
“My view is, we do need to be much more aggressive than we have been,” he says. “We need to act soon, because societies forget the mistakes of the past…At the end of the day, the public—you—need to make the call. You need to decide ‘have we done enough? Or should we do more?’”
Watch the full video of the event on the Federal Reserve Bank of Minneapolis website.