The Light for September 13, 2022
By Neil Gambow
President Kathy called the 10th meeting of the year to order at 7:30 a.m. on the dot with the ringing of the bell and read the statement concerning the indigenous people who lived on the land we occupy here.
John Osterland - read “Why We Are Rotarians,” followed by the thoughts for the day from the late Queen Elizabeth II.  On the subject of leadership, Her Majesty said the following: “I know of no single formula for success, but over the years I have observed that some attributes of leadership are universal and are often about finding ways of encouraging people to combine their efforts, their talents, their insights, their enthusiasm, and their inspiration to work together.”
May she rest in peace!
Ann Searles – I'm sometimes called the Sunshine Lady, but the person who epitomized sunshine was Nancy Baumberger. As you know, the memorial event for her was held last Saturday. Part of being a Rotarian is fellowship and support for each other. I was really pleased to see so many of our club members in attendance at the memorial service in support of Bruce and his family. There were twenty-some club members there. Thank you for showing our Rotary support in this important way.
Bill Glader – Taste of Evanston continues to be in full swing. About 350 tickets have been sold.  Keep on selling, and reach out to friends, relatives, associates, and anyone else you can think of. A list of tickets will be published today. Helen Oloroso asked that anyone bringing their silent auction items to the event do so by 1 p.m. The silent auction is live.  If you are outbid on an item, you will get an email that you have been outbid.  Bid often!!!  We already have 38 items and expect the count to be 50 by the time of the event.  
Myra Janus – The Community Service committee meets tonight at 7 p.m. Bundled Blessings will be Wednesday, October 12, First Methodist Church, 4:30- 6 p.m. Contact Susan Prout at for more information.
There’s a volunteer opportunity at RI: Each fall and spring, Rotary hosts generous donors that have contributed $250,000 or more to The Rotary Foundation. As part of their programming, we offer a service project with local clubs in our community. They are often presented with problems not experienced in their countries or exposed to new project ideas. It also is a great opportunity for the Evanston clubs to meet Rotarians from around the world. The next project is taking place on Thursday, Oct. 13 from 5:30-7 p.m. at One Rotary Center. More details will be forthcoming. Please contact if you are interested.
North Shore CROP Hunger Walk – Virtual – is scheduled for Sunday, Oct. 15. More information to be announced.
Steve Goranson – the Lighthouse Beach clean-up is this Saturday, Sept. 17, from 9-11 a.m.
Roasts & Boasts
Joy Joyce - Boasted Ann Searles for her recovery from a health issue.
Keith Banks - Boasted everyone for supporting him in his run for the 2nd ward Alderman seat.
Kristin Brown - Boasted her team riding in the End Polio bike trip in Tucson, Ariz., in November. Included were Jean Saunders, Barb Miles, and Evan Girard.  Anyone interested in joining the fun can contact Kristin.
Bruce Baumberger – Roasted everyone for NOT bidding over him on the dozen items he has bid on the Taste of Evanston silent auction!  His plea is to BID over him!
Steve Goranson – Boasted his daughter, Lecy, for being honored by Humanitas for her TV Connors script on gun violence.
Kathy Tate-Bradish – Boasted Linda Gerber and David Buris for helping to set up Jan, a fifth-year college student, in Kathy’s coach house.  The student is donating all of his accommodation stipend to our foundation.
David Buris – Boasted Kathy Tate-Bradish for offering her coach house in the true Rotarian spirit.
Gary Peterson – Boasted his daughter, who is moving to New York City and finally snagged an apartment. 
Neil Gambow – Boasted his wife Marge, whose birthday is September 18!  If you see her at the Taste of Evanston, wish her a happy birthday! 
Topic: The Federal Reserve
Speaker: Economist Dr. Robert Hetzel
Dr. Hetzel is a retired economist and research advisor who spent his entire 42-year career with the Federal Reserve Bank of Richmond.  In that role, he was involved in the preparation for briefings following scores of Federal Open Market Committee meetings. He authored many publications and two books that constitute the only basically complete history of the Federal Reserve System.
Today Dr. Hetzel talked about the current Fed Chairman Jerome Powell's position and his response to the pandemic from a historical perspective, and in particular related to the 1970s, which ended up being great inflation.  Should we be worried about what the fed is doing now? Here’s his analysis:
The impact of the Covid virus became obvious in March of 2020, which saw the unemployment rate rise from 3.5 percent in February of 2020 to 4.7 percent in April. So it was a dramatic rise in unemployment, and one theme he will keep coming back to is this occurred in a social environment of a fractured society.
He discussed the “Phillips Curve,” which implies that the unemployment rate and the inflation rate have an inverse relationship. That is, higher inflation is associated with lower unemployment and vice versa. The idea is that the lower the unemployment rate, the more pressure on resources and the higher the inflation rate. In March of 2020, the trade-off appeared quite favorable, just as in the 1970s.
There are two opposing philosophies in terms of how to think about monetary policy, Monetarist and Keynesian.  Dr. Hetzel is a Monetarist.  He went on to explain the dual goals of low inflation and low unemployment.  In the Monetarist tradition, the idea is for the Fed to concentrate on price stability and then let the price system work to control unemployment, and the labor markets will work if you give it time for the unemployed and the employed to match.
The Keynesian tradition is that while that might work, it works much too slowly. So we've got to have this policy where at times, when we're concerned about unemployment, we really rev things up.  The Powell of the Pandemic offers an extraordinary experiment in terms of distinguishing between these two ways of thinking about policy.
We're going to keep the interest rates low, and when inflation comes back, the Fed starts to worry about how far we want it to go up and then at some point we'll move back down the Phillips curve and come back to 2 percent. Well, that was the idea that hasn't worked.
So now the primary emphasis is committed to raising the interest rates until we actually see a reduction in underlying inflation.  So that's the part of the test we're in now, and we're going to have to wait to see how that works out.
So in March 2020, we got this whole panel of programs to intervene in credit markets that the Fed became ready-fed.  They took credit risk off the balance sheets of corporations. But in times of future stress does that recreate moral hazard? Because firms think they'll be bailed out, and so they take too much risk. 
The idea is that the New York desk buys the liquid assets like mortgage bank securities or long-term Treasury securities. And those are then replaced with bank deposits in an investor's portfolios so investors are more liquid than they want to be.  This drives up housing and other asset prices, which is an expansionary policy.  This is a policy that will take a long time to reverse.  Then you go to a contractionary policy which destabilizes the economy. 
In the 1960s, the political system wanted low unemployment.  At that time, 4% unemployment was full employment.  Powell likes low monetary policy that produces jobs, especially for minority neighborhoods.  The push at that time was expansionary, with unions and companies pushing up prices to deal with price controls.  In the mid-1970s. the new administration decided to get out of the inflationary cycle and brought the economy to a stop.  Then when the Carter administration came in, they put in an expansionary policy.
Guests and Milestones
Mary Hetzel – wife of Dr. Hetzel
Gerry Baumann, Sept. 15
Louis Allred, Sept. 19
Club Anniversary
Albert Menard, 8 years, Sept. 15, 2014