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With her eyes, Greenspan views real worldBy KRIS HUNDLEY © St. Petersburg Times, published May 12, 2001 Marsha G. Rydberg never had an economics course in her life.
Behind the monolith headed by Fed chairman Alan Greenspan and known as the Federal Reserve System lies a nationwide web of local business people such as Rydberg. They serve on boards of the central bank's branches and are a conduit for anecdotes about how the economy is affecting real people in their everyday lives. Once a month, Rydberg and her six fellow directors -- a commercial farmer from Winter Garden, a banker from Alachua, the chairman of BlueCross Blue- Shield of Florida, the president of MacDill Federal Credit Union, an investment banker from Winter Park and a hotel owner from Panama City -- meet in Jacksonville. They submit brief written reports on the situation in their own backyards, then vote on whether to raise, lower or hold interest rates. The comments and votes generated by Rydberg and her colleagues are passed along to Atlanta, then included in a district report that's sent to the Federal Reserve System's headquarters, and chairman Greenspan's desk, in Washington, D.C. In other words, Rydberg -- 54-year-old lawyer, mom and lifelong Tampa resident -- acts as Greenspan's eyes and ears in the Tampa Bay area. "And I've been led to believe that anecdotal information plays a significant role in Greenspan's vote," said Rydberg, who has heard the Fed chairman speak several times in Atlanta and Washington. Rydberg was appointed to the board by the Fed's Board of Governors. Branch bank directors receive a $1,500 annual retainer, plus $200 per meeting and reimbursement for travel expenses. In a recent interview with the St. Petersburg Times, Rydberg talked about her term on the bank's board (which ends next year), why she thinks the economic slowdown has been overblown by the media and unemployment close to home. Q: Why do you think you were selected for the bank's board? RYDBERG: A client of mine in Panama City was on the board and when her term expired, she recommended me for the position. At the time (1997), there hadn't been a representative from Tampa for quite a while. I'd also had some experience with the Fed because for years I taught a course on legal issues in lending at Federal Reserve Board schools for bank examiners. And though I never took an economics course, I am a business lawyer who also teaches banking law (at Stetson College of Law). I think the Fed also may have been interested in my bankruptcy expertise because that's so much a part of the business environment in this culture. Finally, I'd really been raised in banking. My family owned the largest block of stock in the old Exchange National Bank in Tampa and both my grandfather, J. A. Griffin, and my uncle (G.R. Griffin) had been president and chairman of its board. Q: How does the bank solicit your comments? RYDBERG: Every month, I get a series of questions from Mama Fed -- actually they're from someone in the Atlanta office. There are usually three or four special issues, like what do inventories look like? What's happening with personnel costs? Are energy costs having a special impact? Then there are routine questions on the pace of the economy and whether we feel it is inflationary or deflationary. Q: How do you prepare your report? RYDBERG: I spend about a day phoning my list of contacts in the community, though I try not to hit the same people every month. In my report, which usually runs about a page and a half, I usually don't identify my sources by name, just by niche. Since they're not being named -- and it's not going in your paper -- most people are more than willing to discuss their views and what they want in terms of interest rates. And it's in their interest to be candid if things are going badly and they want a lower interest rate. Then I'll get tidbits about the economy from somebody I just happen to be talking to. I've been on the Chamber of Commerce board and the Downtown Partnership board. I'll be sitting next to someone and ask, "Are you importing anything?" I think when you sit on this board, you see life from a different viewpoint and you retain comments that might give you insights about the economy. Q: What is your assessment of the economy in the Tampa Bay area? RYDBERG: I think there is some question in a lot of people's minds how much the malaise is driven by the media. My feeling is that the perception might be worse than the reality. Many times if we had this level of unemployment or this rate of new construction, we wouldn't be hanging crepe. It's just that we've gone through a period of time when growth was so phenomenal that we think that's standard. By comparison with that, we're not doing so well, but I'm not sure we're doing as badly as people think. My law practice is making as much money as we ever have. And in South Tampa, where I live, there's not a square centimeter that's not being built on with retail or multifamily. In Hyde Park, I see stores going out and new ones coming in. I don't see a major economic collapse anywhere. My 23-year-old daughter, who graduated from college a year ago, is having a hard time finding a job. But she was a political science major and would have a hard time finding work anyway. She's my unemployment statistic, but I don't read a major economic debacle in that. Q: Do your reports on the Tampa area's economy tend to mirror what your fellow board members say about other parts of the district? RYDBERG: Tampa, Jacksonville and Orlando seem to be pretty similar in economics. The Panhandle is not quite in the same growth mode. It's when we go to the district meetings in Atlanta that we hear about bigger differences. Q: What's your impression of chairman Greenspan? RYDBERG: I've heard him speak a couple of times and he's fascinating. I'm convinced that he can handle any question put to him -- even major fashion questions. He fields a real breadth of issues beautifully and has a dry sense of humor. Greenspan and the rest of the Fed Open Market Committee are not bound by the recommendations from the bank branches, but they read the reports from all 12 of the districts. Some of the Fed's members place greater emphasis on the anecdotes; others place more emphasis on the graphs. But I've been told that it's extremely critical to Greenspan to have our input; that it's a major part of how he keeps his hand on the pulse of what's happening. By the time economic data is charted, you may be behind the curve. Q: You've been on plenty of high-profile boards in Tampa, including serving on the Tampa Housing Authority board during the tenure of former executive director Audley Evans, who was recently found guilty of accepting bribes from developers. What did you learn from that experience and how did that compare to your work with the Fed? RYDBERG: Serving on the housing board, for which there was no compensation, is extremely challenging and frustrating, whereas serving on the Federal Reserve bank branch board is held in high esteem. When I was on the housing board, we didn't know how the dollars were being spent. We depended on outside audits, and every audit we received was absolutely clean. We also had an internal auditor, and the director was winning awards from HUD. I don't know how you get people who care to serve on those community boards when they're not only not appreciated but openly criticized. Serving on the Federal Reserve bank board is really the antithesis to the housing board experience. - Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.
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