Even though the Sioux Falls Economic Summit took place in South Dakota, there's some interesting information about the American and Midwest economies that Kansans might find interesting. Minneapolis Federal Reserve Bank CEO Dr. Gary Stern says he foresees an upturn, but predicting when is always the dicey question for economists like him.


Photo: Dr. Gary Stern, head of the Federal Reserve Bank of Minneapolis, was the main speaker.

Some excerpts from his speech:

How we got into this mess

"The bottom line of our analysis is that creditors of large, complex financial institutions expected protection if failure threatened. As a consequence, they had litle incentive to be concerned about the condition and prospects of such institutions, leading to underpricing of risk-takeing. With risk underpriced, large institutions took on excessive amounts of it, leading eventually to the precarious position of some of them. And policy makers, fearing massive, neagative spillover effects to other instituions, financial markets moregenerally, and the economy itsefl, validated creditor expectations by providing protection."

"This emphasis on incentives is not accidental. To the contrary, I am convinced that just as incentives were at the heart of the TBTF (to big to fail) problem, they necessarily must be at the heart of the solution."


Photo Above: Best Buy CEO and Chairman Brad Anderson.

Photo Below: Anderson interviewed by KSFY-TV's Jeff Cleland in the Green Room at the Washington Pavilion.

I had a fun encounter with Anderson. After his interview with Jeff, above, I told him that if I could, I'd live in one of his Best Buy stores. I said I could sleep on the couch in the home audio department, use a microwave in appliances to make something to eat, and use the store bathroom. He laughed heartily.

An excerpt of his interview with KSFY-TV:

"We have a culture (in the Midwest) that works and can be leveraged to solve problems."



Photo: U.S. Senator John Thune (R-S.D.) with two unidentified VIPs in the Green Room.

As I was in a room full of muckety-mucks, I didn't think that was the proper time to give John heck for his opposition to the union card organizing bill in Congress. Instead, we had a warm chat about our families, basketball, soccer, and his recent beef-cake video on YouTube.



Photo: Sen. John Thune, Brad Anderson, Dr. Gary Stern during the panel discussion.

Excerpts:

Stern: "The preponderence of the anecdotes is that the economy (in this region) is performing like the national economy. At first things were holding up better than the national economny but it has fallen into line."

Thune: "South Dakota will derive a lot of benefit from the stimulus package."

"We might see a short recovery then a drop down again. It will take a while for job creation to catch up. It will take a while for small businesses to start hiring again."

Anderson: "Economists are saying there's one more notch to fall because of credit. We're acting like we've hit the bottom."

Related articles by Zemanta

• Bernanke's Many Dates With South Dakota (businessweek.com)
• Thune Appears Safe for Re-Election (politicalwire.com)
• Another Look at the Too-Big-To-Fail Problem (blogs.wsj.com)
• Do We Need A Detroit Bailout? Really? (cbsnews.com)
• Employment and Recession: More Job Losses to Come (blogs.wsj.com)
• Is There Really a Credit Crunch? (time.com)
• 5 more fresh articles...