Federal Reserve president answers economy questions in Grand Forks
GRAND FORKS—Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, made an appearance Monday in Grand Forks as part of a tour of his Midwestern district.
Kashkari spent much of the day touring the city with local leaders, making visits in an itinerary that included a talking session with public health experts to discuss the opioid crisis and a walk-about of downtown Grand Forks to discuss recovery after the flood of 1997.
He also made a trip to the Grand Sky unmanned aviation test site before rounding out the day with an appearance at the University of North Dakota to speak at a town hall conversation as part of the university's Eye of the Hawk lecture series.
The conversation, like the rest of the visit, was wide ranging. Kashkari was joined on stage by UND President Mark Kennedy, who prompted the central bank leader to walk the audience through the basics of what the Federal Reserve is, what it does to influence U.S. monetary policy and why that should matter for everyday life.
After the general information piece, the two opened up the conversation to the rest of the audience for questions. Kashkari fielded an opener about the role of digitally based "cryptocurrencies" such as Bitcoin on the U.S. economy—he didn't see it as a serious competitor to the dollar—and another question soon after about his involvement with the Troubled Asset Relief Program, or TARP, known to most as the federal bailout of financial institutions deemed "too big to fail."
"We hated that we had to bail out the banks," Kashkari said, later describing the financial crisis as having "felt like a war." But even still, he believed providing the bailout headed off a set of economic conditions that could have pushed the Great Recession into Depression-level depths. Policy came up later when one audience member asked about the downsides of recession-era regulations such as the Dodd—Frank Wall Street Reform and Consumer Protection Act, a major reform package that expanded oversight over the financial sector.
Kashkari, who cautioned the audience that "the biggest banks are still too big to fail," said Dodd-Frank had brought positive change while unintentionally harming small community banks through regulatory burden. He said the Federal Reserve is discussing plans to relax some rules for banks of a certain size.
In a later question about the economic effects of technology, particularly automation, Kashkari gave a kind of shout out to North Dakota's energy producers.
"When I look, in the last decade, at what was the most important innovation in the U.S. economy, it's not Facebook or Twitter—it's fracking," he said. "That's had a much more profound impact on the U.S. and global economy than anything out of Silicon Valley, and it doesn't get the credit it deserves."