After the Federal Reserve Board wraps up its meeting on Wednesday, Chairman Ben Bernanke will give his first ever live press conference.
This is a big deal.
After all, the Fed is one of the most important institutions in the country, but it's shrouded in mystery. By setting interest rates and regulating the country's money supply, the Fed is supposed to keep prices stable and unemployment low. But who really knows what goes on at Federal Reserve Board meetings? They publish minutes of the meetings, but for the true scoop, we turned to one person who knows first-hand.
Randall Kroszner happened to be a Fed governor at one of the wildest times in U.S. financial history. He's a professor of economics at the University of Chicago Booth School of Business.
He started his term on the Fed in 2006, just as the housing market peaked and before the first tremors were felt in the subprime mortgage world. But before long, he and his fellow Fed governors, along with Bernanke, were staring into an abyss – faced with a possible total meltdown of the country's banking system.
In this interview, Kroszner describes the rollercoaster he and the rest of the Fed found themselves on as the crisis gained steam in 2008. He starts by explaining how he felt when he got the call from the White House to serve on the Fed:
fed kroszner clip 1.mp3
As for the economy these days, Kroszner describes it as “partly sunny with a chance of intense thunderstorms.” He says the Fed has to walk a fine line right now as it tries to stimulate the economy to try to create more jobs, while at the same time keeping inflation in check at a time when food and energy prices are skyrocketing.
Here are his views about the state of the economy and how he thinks the Fed will act:
And now to the vending machine for our Windy Indicator, our micro snapshot of the health of the local economy. This week, McCormick Place is abuzz with a vending machine expo. So how's the economy look from the inside of a snack machine?
I tagged along with Vladimir Georgiev as he loaded his machines with Snickers, Reese's and the much less beloved granola bars. He says some of the small businesses he serves seem to be on hard times. He took out machines from a tanning salon and two barber shops recently because the owners wanted too much money from him.
He says they always seemed to want half the money he'd collect from the machines.
“I'm like, wait a minute, I have gas expenses, I have labor, I have to spend time on this thing. I have to pay for product,” Georgiev said. “I can't give you half of this because I'm left with less than half. But they wouldn't care. They would go along for a while and then they're like, ah, you know what, either give me more money or get out of here. I'm like, I'll get out of here.”
Georgiev says he's had enough. He plans to go back to Europe to go to law school. He says the American dream he came here to pursue just hasn't panned out.
Next week, the economy of doing right by mom.