EISEN: How much more competitive are we then in our nation’s factories compared to the place like China?
BULLARD: Well I don’t know if I can put a number on it, but we’re more competitive than we were a decade ago. That’s for sure.
KEENE: The first question the chairman had in his news conference was on structural and cyclical unemployment. You’ve been very, very good on this. Which side do you stand on? What is the Bullard nuance from the chairman? Is that job pain in America, that anxiety, is it a permanent structural change? Or with a better economy can we feel better about American jobs?
BULLARD: One of the biggest issues here is labor force participation. And I think for those that look at this you have to realize that labor force participation has been dropping in the United States, not since 2008, not since 2007, but since 2000. So it’s been dropping for more than a decade. A lot of that is accounted for by demographic factors. And I think that’s something to keep in mind, letting people keep pointing to lower labor force participation, but a huge chunk of that is really –
KEENE: You’re not as really on that.
BULLARD: Yes. It is really structural.
EISEN: And another Fed worry besides the labor market is obviously Congress. So I wanted to bring it up during the health care discussion, but clearly Ben Bernanke signals there’s a concern about Congress here. How great of concern is that for you?
BULLARD: Brinksmanship in Washington was very damaging to the U.S. economy in 2011 on this issue. We had a downgrade of U.S. debt that was a needless downgrade in my view. It could have all self-inflicted by our own political process. I don’t want to see that happen again.
KEENE: Did that conversation affect this shocking announcement two days ago?
BULLARD: Well it’s in our statement that – and in the press –
KEENE: Yes. But I want to know back story. I want to know what happens in the room. Forget about the statement. Was it a source –
BULLARD: Well I can’t report on what directly was said in the meeting, but the committee did come to the decision to cite fiscal factors.
EISEN: Well how hard could it hit our economy?
BULLARD: Well it was a big factor in 2011 I think. There were several things going on and at that juncture.
KEENE: Right.
BULLARD: But it was a big factor there.
KEENE: Jim Bullard, they are in your St. Louis district. They are everywhere. It’s a cliche. Tell us about the cliche. Is the distribution of packages a really good barometer of the American economy?
BULLARD: It’s an excellent barometer. I talked to the team that’s over in the Louisville area, which is in my district. Their – UPS’ Worldport facility is just outside of Louisville there and I’ve actually visited that. Of course I also have FedEx in my district, so I talked to both teams. And excellent – both give excellent reports, a good barometer of what’s going on in the economy.
KEENE: To Sara’s wonderful question about investment, why isn’t there not investment? This has been a disappointment. And Macroeconomic Advisers of St. Louis says a 1.7 percent third quarter. Why aren’t we investing?
BULLARD: Yes. I don’t know. For companies like FedEx and UPS I think they’ve got – they’re big global companies and there are issues in the package or delivery business about how they’re going to cope going forward. And I think they’ve both got very good strategies about how they’re going to do that, but so I’m not sure you can get the CapEx and just out of one industry. Sometimes you get mislead by something by just looking at one industry that has special factors.
KEENE: Very good, Jim Bullard with us of the St. Louis Federal Reserve, this important Fed meeting of a few days ago.
KEENE: Jim Bullard is with us with the St. Louis Fed, the Oracle of Omaha. Is that in your district?
BULLARD: And it is not. It is not, yes.
KEENE: The districts, folks, built in 1912, I think Rhode Island is in Jim Bullard’s district.
EISEN: You’re got Arkansas, right? You’ve got all of Arkansas.
BULLARD: All of Arkansas, Wal-Mart is with us, yes.
KEENE: Seven states, right, seven states?
BULLARD: Yes, yes.
KEENE: There are Wal-Marts in your district, a perfect example.
BULLARD: Yes, yes.
KEENE: But he is from Omaha and he sort of transcends the plutocracy of the haves with Main Street America. Are we getting any closer between the bankers of New York and Main Street America from your view from St. Louis?
BULLARD: No. Main Street is still very upset by the events of 2008 and 2009. And they still feel like there was a big bailout of fat cats like –
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