Event Recap - Report on Federal Reserve Bank Of Cleveland Event, February 17, 2021

Federal Reserve of Cleveland Group Vice President in the Research Department Guhan Venkatu reported to the Cleveland Club on February 17, discussing the regional and national economy and answering questions from participants. Mr. Venkatu’s views were not necessarily those of the Cleveland Fed.

Presenting slides, Mr. Venkatu said:

• Recent U. S. economic statistics have been historic. The 30+% drop in GDP early last year was the steepest since modern recording began in 1942 and likely the steepest since the 1890s. But the rate of the initial rebound was also historic so that by the end of 2020, GDP was only 2.5% less than in the 4th quarter of 2019, when the recession officially began.

• Not counting the $1.9 trillion aid package currently contemplated by Congress, the federal government has spent four times the amount it spent to save the financial system during the collapse of 2008-‘09. This federal spending has increased the debt-to-GDP ratio from roughly 110% in the first quarter of 2020 to roughly 130% through the third quarter of 2020. The federal largess has helped to keep family disposable income at roughly pre-pandemic levels. Consequently, national spending on goods has been strong, although on services – which includes movie theaters, hospitality and restaurants – has been weak.

• Sectors sensitive to interest rates -- which have been low -- have done well, for example auto and homes sales.

• A study by the Cleveland Fed nationally has shown that over the last year net migration into core cities has dropped slightly, though the reasons remain murky.

• Cleveland area employment has mimicked that of the nation; all gains made up since the Great Recession have been lost. Most affected have been low-skilled workers.

• Small business survival has been slightly better in Ohio than nationally.

• State and local governments’ bottom lines have been stressed, which may lead to lower investment and consequent deterioration of education and human capital.

• Statistics studied for evaluating the fair value of the stock market are mixed.

• The Federal Funds Rate is likely to stay as low as today into 2023.

• The pace of economic recovery will depend on the rate of recovery from covid-19.

Answering questions from participants, Mr. Venkatu said:

• A carbon tax is looming less likely on account of the inroads made by renewable energy production and prospects of an increasing electric-car fleet.

• Anxiety over the level of U. S. debt-to-GDP is ameliorated by the purpose of the spending, which lately has been to retain the economy’s infrastructure, the health of which will be used to pay off the debt. Mr. Venkatu likened current government spending to the spending for winning World War Two.

• Cleveland’s strengths are “Eds and Meds,” meaning educational and medical resources, human capital and infrastructure. Mr. Venkatu pointed out that the United States in the 1930s and 1940s understood the economy was shifting and that the one-room schoolhouse would have to be replaced with a greater educational infrastructure. He thought the present adoption of digital technology is similar to the conversion from an agricultural to an industrial society then. The digital economy may benefit non-coastal areas such as the Midwest on account of being able “to do the work” anywhere. He also said there was at least anecdotal evidence of persons interested in moving from high-cost coast cities to cities offering good weather and a more congenial life-style.

• Mr. Venkatu responded to a question about cryptocurrencies by saying that currencies need wide-spread confidence, not yet enjoyed by cryptocurrencies when compared to the trust in such tax-supported currencies as the dollar, the euro and the yen. But he conceded that cryptocurrencies were making inroads and that even central banks were becoming increasingly interested.

Mr. Venkatu pointed out that persons can receive free Federal Reserve Bank of Cleveland newsletters by going signing up here. Persons can learn more about the Cleveland Fed’s research at www.clevelandfed.org or its regional analysis here.

The Cleveland Fed is always seeking economic insights from those in senior leadership positions at their organizations, who can comment, with a fair amount of detail, on their firm’s and industry’s current conditions. If you know someone who may be interested in joining one of the Business Advisory Councils, please share this form.

Mr. Venkatu also encouraged persons visiting Cleveland to tour the Federal Reserve Bank and its Money Museum (when permitted by pandemic-related rules).

Event Recap - Report on Len Downie, Jr. Event, January 12, 2021

Len Downie, Jr., the Executive Editor of The Washington Post from 1991 to 2008 met with the Cleveland Club on January 12; he discussed journalism and his career.

Downie outlined his budding interest in journalism beginning with research and reports in elementary school on Cleveland’s West Side, then with the junior high school paper (for which Donna Shalala was editor in the class preceding) and high school paper. Having studied journalism and political science at Ohio State, Downie won a summer internship at The Washington Post. His work was so successful the Post offered him a job, where, among Easterners, he became known as “Land Grant Len.”

He soon became an effective investigative reporter, wrote a book broadening his exposure of the capital’s dysfunctional Court of General Sessions, and was awarded a year’s fellowship to study U.S. and European urban land issues. Returning to the Post, he was made Deputy Metropolitan Editor just as the Watergate scandal broke. Downie kept the reporting in the Post’s Metro section rather than having it transferred to the National staff and oversaw many of Woodward and Bernstein’s investigative stories. From then until 2008 when he retired from the Post as Executive Editor, he managed the major news stories of the nation. Since publishing All About the Story: News, Power, Politics and The Washington Post he has authored two lengthy reports currently available at the website of the Committee to Protect Journalists (cpj.org): The Obama Administration and the Press, and The Trump Administration and the Media.

“My biggest professional regret,” he told Club members who participated in the virtual meeting, “was not running more stories examining the allegations that the weapons-of-mass-destruction (WMD) intelligence running up to the 2003 Iraq War was faulty.”

Asked about current changes in journalism, he noted that whereas advertising used to support newspapers, the digital age eroded that model. One result was the sale of the Post to Jeff Bezos, who has invested heavily in technology means for the Post to survive. “Bezos has kept his word to Don Graham to keep his hands off the editorial product while moving the Post to a company supported by subscriptions and adept on multiple platforms – currently the Post is second only to the New York Times in daily digital views,” Downie said.

Downie’s answers to some Club member questions included:

• Regional journalism needs help, including in Cleveland. Billionaires in various cities are making some papers stronger, but in far too many places investment companies buy newspapers and run them only for profit, thereby shrinking newsrooms and selling their buildings for cheaper quarters. Nonprofit efforts in some cities such as San Diego are making a good start and may be a solution.

• Beginning with Ben Bradlee, the Post has had a strict division between the Editorial Page and the Newsroom, each having its own editor and reporting separately to the publisher. Downie said that in order to better keep an open mind about subjects when he was the Post’s head editor he stopped reading the Editorial and Op-Ed pages and even stopped voting.

• Downie felt his job was always to report the truth, no matter the feelings of the subjects or the readers. One of his toughest decisions, and after counter-arguments by the CIA and President Bush, was to publish Dana Priest’s story about secret CIA prisons set up in Eastern Europe after 9/11.

• He said he is heartened by the quality he sees in students taking his University of Arizona investigative journalism courses, but he advises them that owing to the demands of the job they should expect and accept a diminished social life. He also said journalists today have to be skilled not only in research and writing but also in the developing techniques of the internet, radio, video and podcasts.

• Asked about movies, Downie said only three captured contemporary journalism: All the President’s Men; Spotlight; and The Post.

Event Recap - Report on Capricia Marshall Event, December 3, 2020

Report on Capricia Marshall Event, December 3, 2020

Capricia Marshall joined Club members on Thursday, December 3 for an hour of discussion about her professional life in the White House, the State Department and around the world. Born in Cleveland to parents of Mexican and Croatian heritage, she graduated from CWRU School of Law and joined the Bill Clinton for President campaign in 1992. Shortly she was indispensable to Hillary Clinton, became White House Social Secretary and then U.S. Chief of Protocol when Hillary was Secretary of State.

Having been tasked with assuring that State Dinners and international conferences for presidents went smoothly, Capricia said growing up with her Cleveland family had something to do with her diplomatic skills. “When I was young we had all sorts of people come to our home; I heard all manner of languages, and we ate all sorts of foods. That multi-cultural experience was great for the jobs I ended up in.”

She gave examples of how protocol helped shape decisions. When President Obama was to meet President Putin for the first time, Capricia called for a small rather than a cavernous room and one with a low ceiling, the better for President Obama to nudge Putin toward some policy refinements. She also related elucidating stories of how gifts can set the tone for international relationships and meetings, a notable one when President Obama met Queen Elizabeth for the first time. These, and other experiences, are spun out in her book Protocol: The Power of Diplomacy.

Asked how she handled the pressure of planning and delivering high-stakes encounters of world political and financial leaders, Capricia admitted to being “energized by the butterflies you feel in your stomach. I enjoy the planning, that is, setting the path along which these persons will go, one hopes with confidence and optimism,” she said.

Asked her impressions of soon-to-be-president Joe Biden, she related that he always wanted to be deeply briefed and fully prepared but that he also had a little rebellious streak. “He tended sometimes to go off-plan,” she said. “He was lots of fun. You never knew what to expect.”

Event Recap - Report from Cleveland with Justin Bibb, September 10, 2020

Report from Cleveland with Justin Bibb

The Club enjoyed a virtual meeting with Justin Bibb on September 10. Justin grew up in the Mount Pleasant neighborhood of Cleveland’s East Side. He earned a degree in urban studies from American University in Washington, completed a course from the London School of Economics with emphasis on social policy and economics and then worked for Gallup in Washington in the Global Cities Group before returning to live in downtown Cleveland in 2014, where he earned both a JD and MBA from Case Western Reserve University. Justin is now Chief Strategy Officer of Urbanova, a leader in the “smart cities” movement, sits on the Board of the Greater Cleveland Regional Transit Authority, and helps run a nonprofit he founded, Cleveland Can’t Wait. As a Cleveland activist, he was well positioned to report on developments and aspirations in Cleveland. 

Justin noted Cleveland problems: half of its children living in poverty, exceptionally high degree of racial segregation, and the worst city in the country to be an African American woman. He said that he believed the city has to face and overcome these systemic obstacles before it can truly restore itself economically. He noted that the city and region is poised for significant power shifts: a mayor’s race next year; a county executive race in 2022; a replacement for Joe Roman at Greater Cleveland Partnership; and other private and public CEO changes. 

Justin was a witness to the May 30 disturbances downtown. He was dismayed by the property destruction but heartened by the peaceful congregation of people of all colors and creeds marching together for reform, and noted that people came together in solidarity the next day to help clean up the damage. He observed that unlike some other cities, Cleveland has since remained calm. 

To some questions, Justin replied that:

• he would like to see Burke Lakefront Airport converted for pleasant public lakeside use.

• investment funds need to go to more than the five neighborhoods that recently have tended to receive them.

• the city needs to increase political awareness and participation – turnout in the last mayoral election was 20%.

• to build better communities “we are going to have to have honest conversation and work intentionally with small acts of service and love that together will lead to policy change.”

• the RTA has new leadership (India L. Birdsong, the organization’s first black female CEO) and its meetings are being live-streamed for viewing by the public.

• owing to the fact that the majority of Ohio’s GDP is produced in cities, he hopes the state legislature can shape a more effective urban agenda.

Justin’s employer, Urbanova, works to rejuvenate cities using technology, infrastructure and education. He is the founder of Cleveland Can’t Wait, which promotes civic technology and entrepreneurship in Cleveland. Justin suggests you learn about it and sign up for its newsletter at www.clevelandcantwait.org.

Cleveland Club of Washington Fights Hunger in DC; Joins with Strongsville Teens in Ohio

Eighteen Cleveland Club members prepped meals at DC Central Kitchen while 27 Strongsville National Honor Society students and three adults packed food at the Greater Cleveland Food Bank.

Four members of the Cleveland Club of Washington, D.C., transfer apple sauce from can to pan in the Club's effort to deliver balanced meals to Washington's hungry.

On Tuesday, November 27 – Giving Tuesday – the Cleveland Club of Washington, D.C., helped give in a special way: volunteering at the DC Central Kitchen to prepare meals for the city's hungry citizens. In conjunction with Club member efforts during two-and-a-half evening hours, 27 students of the Strongsville High School National Honor Society and three adults volunteered their time at the Greater Cleveland Food Bank in Cleveland.

Eighteen Cleveland Club members, including the organizer of this effort, Michael Palinkas, made salads, baked drumsticks, carved turkey, and doled out apple sauce that was then trucked to hunger relief distributors in the Washington area.

Strongsville High School National Honor Society students gather at the Greater Cleveland Food Bank to distribute meals in the region.

Founded in 1989, DC Central Kitchen accepts donated food from around the city, repackages it into balanced meals and oversees redistributing it to homeless shelters and nonprofits. It prepares about three million meals annually and also trains residents in culinary arts, then helps them find jobs.

The Greater Cleveland Food Bank is the largest hunger relief organization in Northeast Ohio, distributing food to more than 900 food pantries.