The lure of fishing, a Federal Reserve chair and Jackson Hole
The lure of fishing, a Federal Reserve chair and Jackson Hole
Every August, the center of the financial world moves to Jackson Hole, Wyoming, for the Federal Reserve’s annual Jackson Hole Economic Symposium. It runs from Aug. 25-27 and is hosted by the Kansas City regional Fed bank. But how did this conference, so far from Washington and Wall Street, get to be such a big deal?
It started in 1982. The Kansas City Fed was planning its annual conference. It had already held a few small, economic confabs, on agriculture. They were gripping discussions if you were an agricultural economist, but kind of a yawn for the rest of us. In 1982, the organizers wanted to go big, and talk about something other than farming. But they needed a marquee name. Who better than the Federal Reserve Chair at the time – Paul Volcker? But how to lure him in? Promise him fishing. Fly fishing.
One of the best fly fishing spots in the Kansas City Fed’s region was Jackson Hole. Former Kansas City Fed President Tom Hoenig says Volcker took the bait. He was there, waders and all.
“The first night of the opening dinner he and another person who was fishing with him came to the dinner a little bit late and they were late enough that they couldn’t change their clothes so they were still in their fishing gear,” Hoenig recalls.
Hoenig says that actually charmed the academics and Fed officials who were there. But when they got down to business some economists ripped into Volcker, criticizing him for driving interest rates into the double digits. Still, Volcker returned for later conferences, creating a tradition that later Fed chairs still mostly follow. If they don’t like to fish there’s always the Friday night barbecue, where economists don cowboy hats. Hoenig says one year they had a roping contest.
“People learned that it’s harder to rope than you think,” he remembered.
During the day, academic papers are debated. Former Fed vice chair Alan Blinder, who figures he’s been to more than 30 Jackson Hole Symposiums, says the goal is an unscripted, informal exchange of ideas.
“They’re in a relaxed atmosphere, the chairman is giving a speech,” he explained. “Others are around, maybe asking questions, mixing with the academics, mixing with central bankers from other nations.”
Economic historian Gary Richardson, of UC Irvine, says Jackson Hole can also be a window on the future. The 2005 conference focused on outgoing Fed Chair Alan Greenspan’s legacy, with an early warning that years of low interest rates were creating a housing bubble.
“’Cause 2005 is very close to the peak of the boom and people are saying – well, there could be this dark cloud looming on the horizon,” Richardson said.
In 2007, Jackson Hole organizers decided the topic would be housing. Some economists complained that would be boring, until it became clear the housing bubble was about to burst.
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