Five States in Six Months: President Goolsbee on His ‘Whirlwind’ Travels in the District
Upon becoming president of the Federal Reserve Bank of Chicago in January, Austan Goolsbee called the Chicago Fed’s Seventh District “the backbone of the American economy.” Now that he’s had a chance to travel in the District, we sat down to talk with him about what else he’s learned about it—and why it’s important to make such visits. The following transcript has been edited for concision and clarity.
Q. In your first six months on the job, you made it a priority to visit all five states in the District covered by the Chicago Fed. Why was it important for you to make those trips early in your tenure?
A. We visited all the states and some of them more than once. And my view is a central job for the president of the Chicago Fed is to get out and see the District because we are evaluated, in the end, on the real economy—not markets, not any obscure financial indicators, but, Are we stabilizing prices? Are we maximizing employment? And you can get the most timely information by going out and talking to people.
And then the other thing is the Fed has gone through some rough patches. If you look at the polling, the Fed is not always popular, and its job often isn’t understood. It’s dealing with the everyday economic issues that our District is facing. So I wanted to get out, and we were able to do that.
Q. Was there a specific goal of getting to the five states in a relatively short period of time?
A. My first six months on the job has been a bit of a whirlwind. But I wanted to show our commitment to the District. So I went to Indiana. We toured an RV manufacturing plant in Elkhart, Indiana, and I spoke to the Ivy Tech Community College and met with students and faculty.
I’ve been multiple times to Detroit for board meetings, to tour our Branch there, and also to get out in the community in Detroit, including seeing the Marygrove Early Education Center, and to meet with business and community leaders.
We went to Des Moines, Iowa. I met with the governor, Kim Reynolds, and heard about some of the training programs and labor force programs that they’ve done on the policy side. We toured an agricultural cooperative—grain silos, chemicals, fertilizers, and the agricultural economy—and met with the Des Moines office of the Chicago Fed, which focuses on supervising and regulating banks in the state.
We went up to Green Bay, Wisconsin. We visited a neighborhood where they’re digging up the streets and learned about their successful program to remove all of the city’s lead service lines. We’ve done a bunch of work on that, highlighting the importance of lead service line removal and the use of creative financing to help the economy and to improve health.
But maybe the most heartbreaking for me, as a Bears fan: We toured Lambeau Field! I also spent time learning about development efforts focused on tourism around the stadium, visiting a tech incubator that’s right in the shadow of the field, and meeting with leaders in the community—and I had to admit they’ve done a good job up there.
So we’ve been going nonstop. But I think our goal is to keep going. Yes, it was a whirlwind. But, ultimately, we want to be out in the community, in the District, hearing from people and talking to people, explaining what the Fed’s—what are we thinking, what is the Fed doing.
Q. Why is it important for central bankers to get out of the building and meet with people?
A. Look, my view is if you’re a central banker who only stays in the central bank, you’ve failed. You’ve set yourself up for failure. You’ve got to get information on the ground from the real economy. It’s in your interest to do that because that information can be timely in a way that the data will never be. There will always be lags in the data.
And then the third thing I’ll say: [Former Federal Reserve Chair] Paul Volcker was my great mentor. And he used to have this phrase that when the crisis comes, the only asset that you ever have is your credibility. And his view was, all your life as a central banker, you’re trying to establish your credibility—because you know that one day is going to come, and if people trust in what you say, it’s going to make your dealing with the crisis a lot easier.
And the thing is, to establish credibility, I think you’ve got to get out on the road and meet people where they are and show that you do actually believe in—you do have a commitment to—the real economy, to stabilizing prices and maximizing employment, that it’s not all some market expectations game. It’s about their lives and their jobs and their businesses.
Q. You talk often about how much you love data. But are you gaining new respect for the power of anecdotes?
A. Well, look, people who follow the Fed will ask, “Are you a dove? Are you a hawk?” I say, “I’m not a bird. I’m a data dog.” That’s the part of economics that I came from: empirical work and data.
The best central bankers are data dependent. You’ve got to figure out what’s happening, and the data help you figure out what’s happening.
But the stories that folks will tell you about their businesses, explaining what they’re facing in the labor market, what they’re facing on supply chain constraints, as well as timely information that we always gather for the Beige Book or for our regional outreach—I’ve always had a lot of respect for the power of that to shape how we look at the data.
And that’s only grown since I became president of the Chicago Fed. It’s a different environment than an academic environment, and that’s exciting. We’ve got a lot of expertise in how to interpret the anecdote, how to interpret readings on how business is going. We’ve been asking the same questions for many decades, and so we can put the countless conversations we have in perspective.
Q. So you talked about some of the other states and cities in the District. Obviously, Chicago, as your longtime residence, is the most familiar to you, and your first major economic policy speech was here. Now that you’re looking at Chicago through the specific lens of the Chicago Fed presidency, does it look different to you? Are you seeing new things?
A. One thing about Chicago and Detroit, a lot of the Midwest urban areas, there’s a civic commitment by the business community and the nonprofit community in a way that is very powerful. I mean, people are loyal to their place, and they’re involved.
And the Fed benefits from that. Partly, there are people willing to serve on the Bank’s boards of directors in Detroit and in Chicago. But even if it’s not the board, there are open doors, open phone lines, open Zoom, whatever. If we call from the Chicago Fed, we haven’t had anybody that’s like, “I’m too busy. I’m not willing to talk to you.”
And I joked without joking—half joking, whole earnest—that the Midwest way is, we get the job done. It doesn’t matter what the conditions are. There’s no bad weather. There’s only bad clothing. And that attitude is very appealing.
Q. Speaking of Chicago, an event we just had here at the Bank in August that I thought was really successful was a Fed Listens conference.
A. The whole program of Fed Listens is really important. The Fed should be listening. Fed Listens started pre-pandemic, including holding a foundational research conference here in Chicago, and the Fed has done events across the country since then, including returning here on more than one occasion.
Our recent Fed Listens event focused on youth employment and the transition from school to getting job skills and a career. And it was really a great event. We had people from across the District. We had a high school student from the Chicago Public Schools who talked about summer jobs and some of the things that our community development team and my predecessor, Charlie Evans, had emphasized about the importance of summer work in successfully transitioning from schooling to the labor force.
We want to get people training or working in our community into discussions to understand how monetary policy affects daily life and the choice of career and other decisions. That’s an important side of the Fed that does go into our thinking. And I don’t think the world realizes that. And so, events like Fed Listens give us an opportunity to do that, and that is a big win on every side.
For more about Austan Goolsbee and his work at the Chicago Fed, please visit the Office of the President.
