An hour with Robert Kaplan

we talked a lot recently about us first china south korea germany irony to convince them that they need to invest in education and skills training they're aggressively doing this week ninety pierre presents in today's global economy i'm kate mcintyre robert kaplan is the president and ceo of the federal reserve bank of dallas and formerly the vice president of goldman sachs he taught at the harvard university business school and is the author of several books including what you really meant to do and what to ask the person in the mirror he is a graduate of the university of kansas school of business he returned to carry you on october third two thousand eighteen to give the unison chandler lecture at capital federal hall with questions from the deal if they use these fields rob it's wonderful to have you here thank you so much for coming in getting extra time i realized that you know a few other things that you do and so pretty defiant hearing and does spend the evening with us is really one of the words

ms gray okay so tell us a little bit about your role as president of the federal reserve bank of dallas and its relation to the federal reserve system over all and also to the federal open market committee so i l s s how many familiar with the federal reserve and so the lesson that and what's the federal reserve my entire career but i realize until i got to the fed in hindsight i really i wasn't i thought i understood it but i don't know that much about solving the media me i get you to the basics are twelve hours or banks united states so for example it can see that mr george runs against coaches fantastic i ran the dallas fed which is texas opportunities in and parts into mexico so that wallace we work together as a team the tall presidents are we meet every six weeks about the times you're formally in washington dc and we come here to talk about what's going on their districts in the

economy are districts in the country in the world and your recommendations on monetary policy and so i got very very big thirty phd economists in my district and most districts in the united states on the same and you know like a lot of things in this world that was first conceived in in nineteen thirteen and then up in nineteen thirty five and say this is still so that i think it actually today i think design makes a lot of sense in that i have to be an expert on what's going on in the state of texas mexico louisiana i come with independent views on the economy and states and globally each of my colleagues is the exact same thing so i get to the federal more committees you write on monday tuesday we spend the entire they talk about us economy each of the stops for ten or fifteen minutes the show's last night jay powell foreign janet yellen and so you are an enormous amount you you share insights with the restaurant and you learn a lot

from the others around the table whatever becomes well prepared on wednesday we'll meet and then give our recommendations each of us for about ten fifteen minutes on monetary policy state chairman goes last and in the last thirteen seconds in the week though and you see what easter time that afternoon we have we are we announced for them to do so that's how the family works right so these gentlemen have you prepare for those meetings yep so i have a number of responsibilities as we mentioned we supervise all banks and our district i also share some system like a mini central budgeting for the unites states for the fair it involved in technology vent a wide river still payments and so the rest of the time think about monetary policies about two weeks before the federal open market committee meeting we go to reform or preparation i am talking myself to buy thirty ceo's a month and it rotates on we do

surveys all your district i didn't have all the economists that work for two weeks to prepare me in the weeks leading up to the meeting on what's going to report on the national economy international comedy special topics financial markets going banks in nine states and and then we debate with the group what are forecasters from here and we also debate by debate recommendation to make in the meeting about what we ought to do with interest rates and with a balance sheet many other under any other matters and so that's the press leading up to its very core reckon we do the same drill every six weeks are always preparing in a way including today for fellow more than anybody doing intensive preparation for two weeks and everybody around the table does pretty much the same he jettisoned and sciences and how what you do affects our daily lives well so what we'd most directly do more honest most known for is the federal fund's rate as a short term rates i was about to say i have

kiddingly i would like to say that affects the parts at the rate you're in europe wasn't a fool come back to that doesn't always i'm sure that we set the fed funds rate for the united states to the fed funds rate which raise rates last week twenty five basis points we said in a range set student to a quarter percent is the current range ok so the bank's adjust their lending rates for sure based on adjustments in the fed funds rate they may be a little slower to adjust their deposit rates it has a big effect on the economy because they actually are the number of business people are worried if you're a business person you're harmony and the rates a little higher it costs a little bit more and it creates a little bit of it should create a little bit of a titan in financial conditions i will talk about my views on monetary policy in the moment that there's a whole process and methodology we think

through to try to figure out what the right fed funds rate is we'll talk about that moment that affects interest rates affect the economy the other thing is we will afford half trillion dollar bounty of treasury securities and mortgage backed securities right now letting that balance sheet one off in the aftermath of the recession great recession we do we build that balance sheet we build a balance sheet that injects liquidity into the system set when we start later rucker takes what would be out of the system no we're not alone what every other goals central bank does and they've grown their balance sheets lot also either takes our projects are forty and for those are in the financial markets more liquidity is as more money chasing financial assets it tends to have any upward effect on an asset values as does as do all winter sharif so those are the two primary things you see we also regulate the banks would have pretty tough regulations as the great recession so for those who remember bankers need insurance at regulations have been too

tough you know that that's that we just mentioned those the crate of illinois we talk about that as an effect also can you tell us something about your assessment of the us economy right now yes so let's start with the headline us gdp growth in two thousand at straws constituent so our forecast or gdp growth united states for this year is about three percent that's real gdp growth soviet say two percent inflation of the about five percent nominal gdp that's higher then the growth we've had over the last number of years that challenge is part of this bump in gdp growth and we believe was at the boston i believe is due to the tax legislation and the budget agreement so with that we got a pretty massive amount of fiscal stimulus really unusual and there were late one on the end of this economic cycle but we're late in the economic cycle

normally when you're only in the economic cycle you're looking to do you leverage because you know that in a downturn and have less tax revenues and that survival we have no increased our leverage only in the economic cycle it's historically unusual are our analysis said that all stages we're getting word the height of the impact that his customers right now which is helping growth it's just a little bit two thousand ideas that if a little bit further in two thousand twenty and our own view is by twenty twenty or twenty twenty when gdp growth the nazis image bertrand back down to one three quarters to two percent or so when they say that that are horrifying how could you say that you know we were at one in three quarter percent but that was unacceptable and so let let me explain why i think we're going to be heading there we can do something about it but we haven't yet number one issue surfaced just divorced affect the

two drivers of gdp growth in an economy and sets in your statements or minimize that our growth in the workforce and growth in productivity those two things that you know those gdp growth rate us population and which will warn that they're coming back to remind me that we are we're aging ok for young people that more about that so much but were teaching so what the impact of that is oh the labor force participation rate is famously that line from two thousand seventy today for about sixty six percent to a little under sixty three percent the problem is the bulk we believe that the bulk of that decline is due to demographics yeah this is still prime age workers are still catching up to pre recession but the bulk of it why we believe is demographic and the bad news is we think that labor participation rate is going to decline further in the next ten years than sixty one percent was any people retiring out of the workforce so

later for labor growth is slowing historically years we've done about that means we're doing now you could have people that underrepresented groups that are increasing their employment of women entering the workforce although that's what her that skilled labor force growth and yes it's a sensitive subject of immigration and social part of labor force growth in this country for decades from oslo recognize and we do our work on the citadel's the immigrants and their children have made up over half the labor force growth in this country over the last twenty years and we our analysis shows that native born labor is going to actually be negative growth over the next twenty years so then that change is going to be immigration know i don't need this is not a newsflash to tell you that obviously there has been some constraints on immigration and always said of the das it will stay out of the political debate but we wanna point out we've been advocating though our research

suggests the us to change its immigration system to the more skills based and the mourners were based canada does this one interview businesses find out what the labor needs are and a backward integration surveyor by immigration criteria to meet the labor force needs we don't do that and the thing la porte got elected officials and appointed officials loyal point whatever decisions you may if you think you are in a cut immigration and growth gdp those two things go together ok and what did the face that's ok fina that's one part now maybe we can make up for the slowing labor force growth with productivity growth so much of productivity is the other big productivity growth in this country has been sluggish the last number here's the question is why with technology how could that be an investment and our analysis is it's not that most industries are not dramatically more productive they are but our concern is there are forty six million workers in this country who have a high school

education or less or study show he finished college get your diploma you're in turin for marines very well in your biggest fishery is very high and you're going to be a beneficiary of technology and productivity if on the other hand you've not finished it finished high school and you're don't have a skill your skills training you know your automotive technician pipe fitter it specialist you're increasingly finding your job either restructured were eliminated you'll find another job that it's likely and i go from big making this much money this much productivity less and so what we've been arguing that the dal said we haven't invested enough in this country in human capital we talked a lot recently about us first china and south korea germany the big difference i do go to those countries i still with a major army to convince them that they need to invest in education and skills training there they are they're aggressively doing that we have to let our math science reading here atrophy we now rank twenty fifth

out of thirty five industrialized nations to talk about this remote we have slept our studies show that if we could just improve math science reading productivity with climate of higher gdp and we need to dramatically improve skills training and mailer junior colleges and we're doing that just not fast enough to keep up with technological innovation and automation and so our concern is unless we dramatically speed up and make a national party improve education parties can resort so the reason i talk about that and i'll give you one third that the fiscal stimulus is a tail and right now we think that tailwind is going to turn into headwinds in the out years because we believe the path of us that growth is unsustainable they're held by the public as seventy six percent of gdp and the president i live an uncommon says the fifty four trillion dollars and going north ok and so the moderator des growth that's another head when the

reason i talk about these things everywhere i go is because this record structure reforms at the state local and federal level and we can do something about this but it means you got to beat the pre k zero to five pre k are too many kids in this country are growing up in poverty are starting first rate behind grade level may never catch up and that means lower gdp for the united states and so we're lagging we believe because we're not investing enough in our human capital and so this is not the happiest picture that you know it's not a terrible story but it still beats reality and i've i'm a businessperson i'm not a politician i'm not a huge deal thompson a businessperson and the number one thing i learned including starting her kansas is it your basic socialism first ever star facing reality as if a soprano do something about it and saw him talk about this is i don't think we're talking enough about these issues and the nazis but you're talking about some very long term prospects to guess it would be when you talk about the

skills gap in the challenge there it just mention that we have to start long before we get to hear it right in terms of radiation used to coming here again so well so all start i'll start in texas on which are statistics order but i've looked at the nationwide a very surprising a priest a surprisingly high percentage of students in the united states are not finishing college even in six years yes so why is that and i talked to reverse the president's about those views all the time and a lot of it is because kids are re they were ready for college they were behind certified they went to secondary schools senators court threw out a way to graduate on but they weren't ready ok and they're not finishing college student debt is a terrible problem that if you get a diploma if you can manage it but you don't get a diploma you have a very big wrong and right now half

of all small businesses in this country are telling us they cannot find skilled workers the skills gap for the skills gap in this country these are open jobs were illegally can't find workers which means there's a lack of awareness that you can make over hundred thousand dollars a year and a number of these skills train jobs they were not training enough there were not beefed up in your junior colleges in cooperation with businesses so this isn't actually we could fit in texas or west baltimore was we're doing a dramatic effort to be but still straining the numbers are going up for everyone those jobs again still sheikh youssef it's as simple as that and so it's true that a lot of these things served a growing the workforce and whether it's improving math science reading is is a long term prospect that every year we don't do it or we have under funded present younger generation go or not go and they get lower gdp we've got to address this wasn't helping businesspeople in this

room right so i'll make you a bet for every one of you want it for my half your time spent on people right do we have the right people to re investing enough hundred people are we trading our people country works the same way and my only concern is we don't talk much we're not talking enough about human financial things ally financial guided by background or were taught leadership we have to invest much more human temple is already were gdp it's the reason south korea germany and other countries productivity is much higher than ours even though their demographic issues are worse than others they still growing faster because they have higher productivity we can fix this in this country but we've gotta get after them and your suggestions regarding how yes so there's an ecosystem and we spent a lot of time on this ecosystem that starts again probably everybody talks about when he knew for secondary education we needed at making work for going to college i actually were missing out

on if i had to pick one place where we are two places i guess we should be easier to find it's probably overlooked i will just tell you in the state of texas for example we just cut funding to pretty ok that's probably should've done that we talk about the governor about it we're talking about is a word i think we're going to fix it cause there were really in a nuisance about it but if we just think zero to five and improve pre k and quality pre k that we want and the second place i would second priority would be to beat up our junior colleges make sure our junior college presidents go out and interviewed businesses in their community and then for partnerships and backward integrate the crippling the best junior college presidents now do that we shouldn't actually as a nation we just did those two things it gets even meaningful sprite ok so you've touched on some of these things already but in many of your speeches you often discussed for secular issues

globalizations deliver a demographic shift talked about debt to gdp and that technology enabled destruction so if we take each of those one at a time and talk about them other than what you've already cover so starting with globalization twenty twenty there was a package has already hit us or the demographic issue so let me just say why why talk about drivers an elderly a little context have really become the professors to reappear academics ok so one thing i learned at harvard is in order to be a successful professor you get tenure you need to publish research were published research you need data by definition data is backward looking means it's already happened with the date on it and so and as economists economists therefore publish a lot on things that where there's good data good data tends to be associated with cyclical of its gdp unemployment inflation things that you can ms e commerce department numbers every single month i learned

as a businessperson those are outcomes and i look much more than trying to go around the table and drivers some reason i do that so one of the big four drivers explain his absence aging demographics which were talked about sluggish productivity which were to talk about part of that as technology enabled disruptions in the flesh that out a little bit so there's been a dramatic structural change in this country over the last just ten fifteen years and that the consumer today has in the palm of his or her hand more computing power than most companies and twenty five years ago with a different light is nothing is a big deal and it changed the balance of power for atv i'm gonna buy a car and you won't buy a new car based on new car so the community within fifteen years ago you talked with a salesperson you probably negotiate with the salesperson the salesperson was probably the highest paid person the car dealership my not been a great experience but the site of a car roll forward to the day to day nobody buys a car like

that you'd probably look a true car you look at websites you shop with the lowest price you walk into the dealer purity know what you're going to do the sales person there are fewer of them though make anywhere near as much money as a not that important anymore you've already decided that selling anything you're talking to a product specialist but there is a person in the car dealer now that you never dealt with that much of that person's the most important person a card that person's the automotive technician ok and they make most of their money now not a new car sales used car salesman about this is that they make it on repairs ok we don't have enough automotive technician so what why tell the story it's a good example i go through every industry similar story if you run the journal the newspaper similar story technology will disruption has come on anti certain positions it is reduced pricing power business it is cause usually record low murder activities to murders for living the primaries and whether so much more directed at right now is technology enabled

disruption but the point is there's water pricing power and businesses are doing an excellent job of tapping into a war to maintain profits but it's having a real effect on the workforce if you're not educated if you're not either college educated or skill string you're getting buzz around by the us and you write that you know you're you're in the you're in the risk of receiving end of getting commoditize and so we need to improve the way we educate workforce they have to be more accountable for giving advice to any student to their next twenty five years your unfortunately a lot more adaptable and open minded than i was you know i could maybe think of the work of the same companies same profession today you're very likely to have been more likely to fire people and or are you more likely to get fire you're likely to be a good profession does not exist for years after start pinching so dramatically wonder why we went into it you'll adapt to it if you're educated that this is what the productivity issue is about and

we haven't caught up to that other countries on that we haven't caught up in our educational system sufficiently to deal with it it's hurting gdp we've talked already about their government debt before globalization so in the context of all this what's the role of globalization so right now in this country we're talking about globalization as a threat ok if you're losing your job in this country her often it's been attributed to globalization the truth is that was true fifteen years ago okay if you lost your job in this country in the shoe industry and a number of other industries you know globalization had a big impact on your job will forte today we've now developed in this country integrated supply chain and logistical arrangements primarily with mexico and canada which is why why this trade agreements finally gotten done i thought it would and here's why seventy percent now are imports from mexico or intermediate goods forty percent of the content of what were imported from mexico us consulate

was that all about it's about integrated supply chains logistical arrangements that have allowed the us to build competitiveness build jobs gained sheer we didn't have those arrangements with lichens those jobs probably the nation they want to go to the story globalization isn't has been talked about a threat it's an opportunity that we've gone through the pain and suffering of globalization but we're less than five percent of the world's population were teaching got a lot of debt we got no class companies though and weak and globalization in terms of trade and the workforce is an enormous opportunity and on the immigration side are studies have shown a meaningful percentage of immigrants started businesses employ people innovate more and so if you get that diagnosis wrong you're gonna make the wrong policy decisions are lawyers i mention

globalization is a major force it's here to stay but it's an opportunity to have an enormous competitive advantage if we integrate with the world is on the way we're in is worse water that advantage and historically one of the distinctive coplen says of this country alike say germany or japan for example is we've been very good at taking people from around the world somalia and hear her and the leaders in this country my grandparents were born here and integrating with the world in order to build gdp and i just remind us of that it's a it's a key part of the solution at a time were very highly leveraged and again we're aging so what are some of their data that challenges that advanced economies france so most advanced economies in the world with a couple of exceptions have same problems when for germany's worst demographic problem

we'd ok they're actually going on there we're not gonna shrink our population just it's been a slow journey actually reduce japan's going on ok that's pittsburgh and they're not receptive although germany has tried recently they haven't been historically culturally receptive to immigration japan still isn't although they have a guest worker program know they're trying to try to address this and so their issue is again europe has very high leverage japan is very high leverage most the western world as high wage at china by the way he's got a severe demographic from their high leverage and so the big question for all these countries as they got to grow to the leverage and they can't keep rely on increasing debt to gdp in order to spur economic growth we've we've been i would call it the end of that gets super cycle we we we take it for granted that we've been using

leverage to stimulate economic growth for most of our lives that i would say we're about at the end of the road where we got to find other ways to grow and i think the western world in most advanced economies have a similar challenge mr ging so that this is all despite the recent turmoil this is the opportunity in the world for emerging economies which is why a lot of us companies are spent a lot of time trying to do this is that they're demographics or better the road potentially is better and that while the united states and most of their sitcom countries have these issues i talk about there is a part of world that is growing dramatically and it's probably a big part of our future growth is the tap into that take advantage of that and to and to do business with them so despite now the problems emerging markets as we're seeing the sheer they're more fragile they have some of them like turkey and argentina have to match dollar denominated that

exposure and when the dollar strengthens its jarring to them ah but i would say over a longer time the growth in the world if you include china a high percentage the world growth is going to come this coming today and will come from emerging markets we put an opportunity we were talking about immigration and being able to select people for the skills that we need and if we have the opportunity perhaps with the growth in emerging markets as they're a problem then with the skills gap and those countries so they'll lay some of the names we see there's something so what there is what worries me united states we have a shortage of a number of different professions people from certain of these emerging countries and he included used to come here get engineering degrees and stay and were very but that's extremely viable two were growing gdp they're not saying now or people are not coming here to get educated or go elsewhere

or they're when they do come here they're going back and were not as welcoming for them to say you know there's been a proposal that others have made that if you get an engineering degree rather advanced reader we should stamp green card and it was solicitor that's obviously not happening and so a lot of talent is going to emerging markets is rated as a supper to be there and growth opportunity and my concern is again on the human capital side if we could roll all the human capital we're great but what we can't and i think historically at accessing globally human capital this is how google started as a lot of our great country companies people will think about this with that they came here from other countries and they created all three thousand thousand billions of jobs so that we'd things were just reminding people you know as a businessperson always think in a business professor was talk about a strategy what you think that we're distinct

provinces you wanna build a distinctive properties will work on this it is just nine states has a real distinctive competency which help explain why we've been dominant and we needed people in those competencies yellow understand why scott i come from an industry where the most prevalent eating characteristics of the farm bureau foreign sales is that has a record year lehman record year there are bear stearns record your bankrupt and so i'm kind of trying to be your recordings as makes me more nervous than feel good because i'm trained that way is that you want the building codes you want sustainable world and that's as everything we'd like to see them were been talking about is to build sustainable growth okay so the last series of questions i want to ask you is

i am how is higher education helping us to bridge the gap or not bridge the gap and where the major impediments that prevents higher education happy halloween part of the problem and maybe so the good news is so what are the distinctive competencies and i'd states is our education system they will come from all over the world to get educated in the us we are we are the best in the world but we have to keep working in order to maintain that and we've been historically retracted stores people the best in some the world not completely that heavily you know used to be if you go back we always have this conversation does the uk go back seventy five years ago the leading oversees the world a number more in germany not today there's no and so we gotta keep working at it there's been a lot of comment that university education is not accessible is too expensive and i'm sure there's some truth to that

and i would guess that heresy to say this i would guess over the next twenty five years you know funding education versus funding research are going to get the couple little bit more and i would guess that university of eleven or a little more pressure to know where they are to manage their costs even more but back to the challenge to your face and your cancer research in texas a little less is because population growth in the united states is flat or down population mostly poorly and have the city or state so we're talking about the state of kansas for example and comparing that there's about thirty five or forty states and i'd states with populations are flat or slightly declining that's a problem and the and it's a little bit of a symptom of us population growth is slowing so what does that mean if your population is flat or down it means your workforce growth may not be sufficient investment in

education a lot of other priorities they also your pension obligations answer that were seen and what we're seeing across the country is state support for public education is the current president and he agrees with we're talking about a dinner and so it's the most important thing we can invest in we know the statistics are college graduates as outstanding and yet where we're being squeezed financially took to cut funding education and the few words every one thing in our history hidden wanna make sure your purpose finding its education here's our side that it is so edgy so higher education is part of the solution but it's one of the distinctive things about the united states and i think the trick is just to keep talking about sweeping the boeing you are listening to robert kaplan president and ceo of the federal reserve bank of dallas and the university of kansas graduate he spoke with dean page fields of k use business school on october third two thousand eighteen coming up buying k

pierre presents rub kaplan takes questions from the audience that's just ahead right after this sam from the university of kansas this is kansas public radio we're ninety one five warrens an eighty nine nine acheson were online at kansas public radio dot org this weekend the jazz scene david bassett features the latest in jazz jazz classics and everything in between join us for the jazz scene monday night at nine o'clock here in kansas public radio support for katie our prisons on kansas public radio comes from the university of kansas transforming stevens and society through academics discovery service and spirit information about the possibility of the cave education is online a k u e d u n k mcintyre today on k

pr presents how to stay competitive in our rapidly changing global economy with rob kaplan president and ceo of the federal reserve bank of dallas caplan gave the anderson chandler a lecture at the university of kansas on october third two thousand eighteen coming up i had a chance to sit down with mr kaplan for a brief interview but first he takes questions from the audience at k use school of business thanks for coming out of the conversation by human capital you know a generation or two ago the skills gap was dealt with why a lot of corporate training center of training you and i are upset made with remember when he went to work for a company wide use of the whigs a train before he'd like to do anything right and i think i don't the most was probably three quarter is a way down from what it used to be just that monitor their track them in as their way to incentivize corporations to do more of that so don't just use the excuse blame the education system on everything so here's that here's the

challenge i thought i'm going to all throughout the state organizing about the fed because of that period i get my arms around work and talk about the server with mayors chamber commerce business leaders education leaders and here's what i've learned from that if you're a big company you probably have a pretty healthy investment in training ok if you on the other hand or a midsized company or smaller company you probably can't afford it and here's why the skills middle skills so called says high skills as warriors other you know accountants inside are those are those are more high skill jobs or lower skilled jobs the metal referred to his nobles goes about forty five percent of all jobs the challenge that's happened to your point is which required far more training today for those middle skill jobs or fifteen years ago because of technology i mention the automotive technician you had to get completely retrain from fifteen

years ago to now work on a court today if you're a single car dealer you may not have enough teachers so what needs to happen and we talk about this unique toward an idea leaving junior college in your neighborhood were would go survey you every other car dealer would create a program in some critical mass yet help fund it and they would train they would together huge turnout automotive technicians every year and what we're seeing that's the part where i'm more concerned that we don't and that small companies and that says companies and other resources to do it they need to have a partnership private public partnerships with a junior college and and we've been slower too slow and all those partnerships only my two cents on them so we do it with our said we act as a convener to get business leaders can you leaders of nonprofits and you're caught in iraq and hope for stuart creation of those partnerships we do

that a lot of different areas including its in when establishing wife i am certain blighted areas they don't have life either be another thing we're very active in that that's what it is we can work on this yes sir we were you are listening to robert kaplan president of the federal reserve bank of dallas the next question from the audience was off might he commented on the strike kaplan's policy recommendations on immigration and education and how those policies differ from current government policy and asked what here's the other side of the story why isn't the government pursuing some of those policy recommendations so only when he mentioned are some things we've done here recently last two years i think are or so we're going to review which we have done we think has been i've been an advocate of it i think it's possible the corporate tax reform elements of the recent bill i actually was an advocate for and i thought i would improve sustainable growth in the united states could reconvene create

incentives the dumbest so more companies tear apart i had a problem with your concern about witches spoke about before it passed was the tax cuts funded by increasing debt to gdp and then the budget agreement which was just a budget agreement funded by increasing the deficit that was our concern now on the education front i thought i'm actually talking to elected officials about sydell federal and that there is and there isn't the counter argument on the stem education the only thing they say in counter his we don't have the money or i don't know a politically i can convince people to spend the money that typically for at risk populations and so we've tried to do with those elected officials is an appointed officials or milan with the connection to gdp growth we're not advocating it was a nice thing to do i'm not under government does for someone to make money and so we try to give them enough information

and without information actually they responded we get a very positive response from elected a point officials on both sides of the aisle on that i would see other things you talked about that it's over not an opposition what i'm trying to do it you're not going to get when you meet with republicans or democrats or port official state local either side of the aisle are designed usual to have a meeting where they'll agree including by the way about immigration jay and what they'll probably tell you probably is that we agree with you i would like to see it happen and we actually given advice on that was a bill in congress that really reflected a number of the recommendations we may just didn't pass and that there are number of officials on both sides of the aisle who would like to be able to get something then i don't know the gun that won the political environment which i won't get into we trust a political is but what we

were not then you'd say or if you're saying these things is going to be controversial not really talking to people on both sides pretty much you know most elected officials from my state that i work in hard to know where they were in any of these days cheap sandwich at georgia don't work were working on this they would like to see more political support and the support among the road to address these next sunday shock you but that's about what i'm experiencing if we did get adequate funding for the zero to five year in education what should we do to see that this pattern for the falling what we mean so but again a little bit get ground level inside baseball then then what happens and i've been part of one of these discussions a lot of this has to get executed locally ok and local cities and towns and you know people will say we have this challenge with our school board in

another skit other districts you know in cities that there's a lock up against that we allocate the money we can actually get this done when i've set the businesspeople in the state of texas and i'd say the nationwide but this actually can also be done by business leaders partnering with nonprofits and reading to kids a lot of nonprofits in this ice to redo a child during his watch are for years when i was in business for a lot of modern fifty people might firm with me every week to do it and i've been encouraging business leaders but to partner with nonprofits that do this and don't wait for you know local or state or local governments to address unlike the reader reaction to question or cut a statement that one of the central drivers you use the word driver of a loesser funding for higher education and a higher debt to gdp over the last twenty years has been the explosion of gas and health care it seems to me it's rabin from

all levels of education and it's driving up all levels of debt is a real subtleties seems like a problem yeah so sort of say of a lot of time at the family of a number of our people did working on what's happened to health care costs have been and i was onstage healthcare commission you may know for the state of kansas for us for a number of years about the five or six years ago that my term ended what i've been surprised is acts of statistics show that that health care spending growth is slowing which i've been surprised about and so youre right every dollar more that they spend on health care means not only pension benefits of unfunded health care benefits are going up and there's no question that that's the case so i i mean you got a ring with you and then the question is about what we do so some states have

trent tried to change from eight to find a benefit plan to a defined contribution plan tried all sorts of things but there's no get around if you're governor you got a row gdp you gotta find a way to generate more more revenue so you may know in this state so a number of governors the state are trying to do things too improve prevention discourage smoking opens to smokers here crave smoking tax in some states to discourage things that are very costly and so i think i think the country is doing somewhat better on that but still a long way to go here as paul thank you for coming here and have one request if you could send us more football players borgata as you say our debt is now seventy six percent of gdp on publicly available what happens to your job on average seven percent are who is getting your job with us what are tools it at that at that moment

so so this gets to a question which we talk about a lot how much of it is too much debt so there they are on to give both sides the art and there are some people out there say come on the ten year treasury is whatever this is liar today three fifteen and look how low rates are at lookout leverage we are somehow we seem to be able to finance it you're too worried about this and that's the one argument my concern is it that well so we were beneficial in that state's of the dollar being a safe haven and when there's turmoil in the world economy and the ten year treasury ok were enormous benefit from my concern is i don't think that's going to change in the next few years but if you go out over the next twenty twenty five years as other countries including china get more modernized and developed if global investors

decide that they don't need to dramatically reduced their holdings in us treasuries are going on they just need to say were weighted down just a little bit that might be enough to raise our debt costs and if you got twenty trillion of that which we do right now because of modern basis for instance forty billion dollars a year so i'm worried that we're vulnerable and that if we don't monitor these moderate our day growth were vulnerable to a future date where we were the world isn't over waiting to the us dollar and treasuries so i'm worried about how much is too much and nobody knows the answer i don't know the answer the benson studies broke off reinhardt others you know who try to estimate it but i think it puts in a very vulnerable position and i think psychologically for the public we're we're just if you read the congressional budget office is not me talking read the congressional budget office report using or already running trillion dollar deficits already i was before the tax legislation and in a downturn deficits tend to go up dramatically and saw the other thing

is will this have a psychological effect on the public when they see is running deficits in the room youre much higher percentage of gdp and we think the crucial budget office forecast that is going to happen because of the aging of the population the way we account for undecided and parliaments president of the budget until the year we spend so that's one issue of budget deficits are expected to go like this even things are going to remain the whiteness and i think we have time for one more question i said i know you mentioned specifically about how many big increase in skilled immigrants coming into this country so what are some other measures we can take to ensure that no actually stay here another sensor just like increasing the board on h one b visas but what are other measures that he can advocate so some perspective what i'm doing when it was part rock for all like the officials appoint officials is to say if we're if we're if we're not going to do that just realize there's a trade off in that were robot were growing more slowly ok and so if you do that if you're this highly leveraged

there's an imperative to grow faster so how do we get people to stay here there's this thinking about the united states a lot of things that people want to come here ok the history of a people want not everybody wants to cover but we are extremely attractive place for people the world and we haven't really had a problem historically encouraging people to stay once they're here to teach a harvard business school for nine or ten years people want to stay in the united states once they get educated here and so i my guess is we'll probably don't need to do a whole lot other than to be welcoming you know that doesn't take that that's it that's not there were not in fairness it's not that we're not welcoming out and there's reasons why this current climate is what it is i think in one of the main reasons is is again a high school educated and less are bearing the brunt of technology enabled disruption and all i'm saying is

our analysis shows this is more about technology than it is about immigration or globalization but i think we have a natural advantage in at where natural magnet for talent around the world and i think it's a big opportunity for us if we choose as a nation to pursue think it was wrong why marcus lamb yes because you've touched on globalization and the end how important is moving forward one thing that's really popular but here does hundred died out of what was a coy and do you see that kind of gaining steam and you think that's kind of a fad and what effect would a half point rate snakes and battles were watching his every word no and it's always like right at the end and then as i know there's going to be don't care when you say what is going to question on bitcoin which tells you something about it that there were no it's so here's my view on that anne and distribute ledgers and technology and you know we're at the fair they were an operator in the payment

system that wire electronic transfer so here's my concern that it's going to grow except one of the reasons corn as much as it is is anonymity so for those who were bankers you may know we've had very strong regulation that they say and time on money laundering know your customer you gonna disclose who you are as a bacteria will be responsible if you're doing business people you know they are and this is a way around that so my guess is as this gets bigger there's going to need to be a little bit more oversight or regulation that is going to put an onus on people disclosing their identity i don't know that this is ever to become a natural currency because it's so volatile and one of the criteria for currency instability you have your transact you want to know your transacting so i think there's a lot of careful about it but i think it's here to stay i have certain on the other hand that payment systems

distribute like what letters blockchain other other innovative payment systems are going to disrupt the current payments is though is i don't know how and i know enough to know in a study this summer for the look of everyday it's gonna happen in ways we can't forget and this is a challenge for bankers is a challenge for their financial intermediaries another current payment systems the system's gonna fall dramatically re oh thank you robert a state that's about half plan president and ceo of the federal reserve bank of dallas i'm kay mcintyre following his lecture i had a chance to visit with mr kaplan president trump has criticized the fad for raising interest rates have an unusual move for president will presidents tend to be more hands off in terms of their relationship with the fed how do you see that affecting what you do or not so

i think it's best for me not even comment on that i would say a little bit of controversy and criticism comes with the territory for the fed i think our job and my job is is to analyze economy and make decisions on monetary policy without political considerations or act or any concern about political influence i'd say i think elected officials others have every right to comment and i think our job is the same which is to try to stay away from politics and make the best judges that we can the chairman of the fed has described outlook for the us economy as being a remarkably positive how do you reconcile that where the parts of the country part of kansas that are feeling an economic upswing so my own comment about us economy is its doing for war to those meetings and i'm i am somewhat concerned that

some of the fiscal stimulus the word and the benefit of it and two thousand eighteen summer will fade in two thousand it will fade further and twenty and we have two big challenges the united states at least there are worth note worth noting which it is affecting some states as you mentioned one is aging population and slower workforce growth and then the second is sluggish productivity which i believe is heavily due to lagging matt sides are reading scores educational achievement and skills training in the united states and because of this you know forty six million people in the workforce have a high school education or less for college educated a year you're probably enjoying a lot of the benefits of this economy and technology on the innovations that a high school education or less and you're not skills training you may be seeing your job increasingly be the restructured or eliminated due to technology

and unless you get retrained which is easy to say hard to do you may actually see you may find another job but it may be at a lower income and lower productivity than your previous jobs i think i think that's a bit of a challenge that's still workers can require short for reforms another other policies on the gist monetary policy to address it's one of the reasons though why i've been advocating we should only gradually be raised in the third century because we're wall were raising with understand fiscal policy of monetary policy should say x with allies will see the effect of those races over the next year at the same time the fiscal stimulus is fading and so i think we just need to be working in gradually so we can understand these various derision forces that's rob kaplan president and ceo of the federal reserve bank of dallas before that kaplan served as a vice president of goldman sachs who taught at the

harvard university business school he's also written several books including what you really meant to do and what to ask the person in the mirror he returned to his alma mater to give anderson chandler lecture at the university of kansas on october third two thousand eighteen a longer version of my interview with mr kaplan is available at our website debuted debbie debbie you've got kansas public radio dot org while you're there you can also listen to most previous k pr percent including last week's programme on the nineteenth amendment and women's suffrage i'm kay macintyre kbr presents is a production of kansas public radio at the university of kansas it