Document text
Adviser peeks under Fed's veil Naumes gets insight into economy's guide By David Preszler of the Mail Tribune Laura Naumes admits she didn't know too much about the Federal Reserve a year ago. Naumes "You have heard of the Federal Reserve, but I think a lot of people don't know what it is," she says. But after a year on the advisory council of the Federal Reserve Bank of San Francisco, she says she's gained some insight into the powerful -- and little-understood -- body. "It's really interesting," says Naumes, the 43-year-old vice president of Medford-based Naumes Inc. and wife of company president Mike Naumes. "You kind of get a little insight into what they look at." And Naumes provides part of that information. The 14-person advisory council that she sits on covers nine Western states, feeding information about the nation's economy to the Federal Reserve. It meets four times a year, and last week she attended its most recent meeting in Los Angeles. Naumes represents the agriculture industry and is the only current council member from Oregon; she is believed to be the first from Southern Oregon. She believes she was nominated by someone in the agricultural industry, and she'll serve a four-year term that started in 1999. The Fed guides the nation's monetary policy, setting key interest rates and regulating banking. Its chairman, Alan Greenspan, is one of the nation's most powerful people, able to move the stock market with a word -- and sometimes without one. Since her appointment, Naumes has met the 73-year-old Greenspan several times. He was at last year's Los Angeles meeting. "He's an amazing man," she says, noting the rigorous schedule he keeps at an advanced age. She says talking one-on-one with Greenspan is similar to hearing him speak to a group. "He's a very thoughtful speaker," she says, adding that his carefully crafted answers to questions are often followed by lengthy explanations of his opinion. "He's measuring everything he says." In making policy decisions, the Fed draws from hordes of information, from economic indicators and models to reports from regional councils like the one Naumes sits on. One of the things she's been impressed with is the sheer amount of data the Fed looks at. "They really do draw from a large source of information," she says. "They really make the effort to find out what business feels is happening in the economy." The Fed's general task is to encourage a healthy pace of economic growth, job growth and stable prices. It does that by adjusting the interest rates banks are charged. Raising rates generally slows the rate of growth, while lowering them speeds it. "It's a balancing act," says Naumes. "They are trying to just tweak it to make sure it's balanced." Opinions in the financial world have been divided about the Fed's recent interest rate increases and the possibility that more increases will follow. The fear is that low unemployment rates will put pressure on wages to rise, sparking price inflation. Critics argue that signs of inflation have been scant and that raising rates will unnecessarily slow the economy. Naumes says members of the advisory council she sits on generally oppose more hikes. "I don't think anyone wants to see more increases," she says. "Although with the bigger picture, that may happen." While the Fed gets the information that Naumes gathers from the Northwest agriculture industry, she and the other advisory council members have little control over the rates. When the regional Fed board prepares to vote, advisory council members like her are asked to step outside. Naumes says one of the frustrations she and others have felt is that not all sectors are sharing in the economic good times. "If you're in agriculture, if you are in manufacturing, not many of those industries are doing well," she says. "We don't feel that we really see it as much." She says technology is leading the charge and its voice is being heard the loudest. In addition to providing grass-roots data on Northwest agriculture, Naumes and the other advisory council members discuss a number of broader economic topics. They discuss concerns about whether U.S. school children are being taught the skills they'll need to compete, the widening gap between the rich and the poor and the growing reliance on imported agricultural products. It's provided the kind of fascinating forum she hoped for when she was asked to join the council. "I was very intrigued and very surprised," she says of her reaction to the invitation. And she says she's learned a lot about not only other sectors of agricultural but about the Fed and how it works. "I think to most people it's just a name," she says. Today's Edition : News | Sports | Business | Weather | Tempo | Classifieds Mail Tribune Copyright � The Mail Tribune 2000, Medford, Oregon USA