“What steps can the Fed take after catastrophic attacks to reassure the market?” one Mays student asked the screened image ofÂ Roger Ferguson, vice chairman of the Fed’s Board of Governors, who was speaking with only a slight time-delay from 1,400 miles away in Washington, D.C.
The broadcasted answer from the only governor present in Washington on 9/11 was decisive: Maintain open market operations by directing the Fed to purchase government bonds, provide direct loans to banks, clear all checks and encourage banks to keep at business as usual. “First, we must communicate very clearly that the Fed is open and operating and that we’re willing to use our tools to keep the economy running,” Ferguson said.
Graduate management students in Professor Michael Pustay’s distance learning course hear first-hand each week from the nation’s top policy makers and business leaders â€” including such figures as Admiral B.R. Inman (ret.), former deputy director of the CIA, and former U.S. Congressman Charles Stenholm, who was a House leader in promoting social security reform for more than two decades. But Ferguson is among the highest-ranking economic officials to share his perspective on the intricate relationship between business and the public policy it must abide by.
Mays graduate students put Ferguson on the spot with questions about how and why the Fed sets interest rates, learning that the nation’s central bank monitors and responds to the activities of “bond market vigilantes” in doing so. Students also pondered NAFTA’s future, questioning the Fed leader about the possibility of a North American currency to mirror the strength of the euro. “It would only work if there were a broader desire to bring these countries together,” Ferguson said.
The class joins in on weekly lectures at the Washington Campus via videoconference, taking turns asking questions of highly-regarded speakers with fellow students at Purdue and the University of Texas.
It’s a technology that puts students as close as possible to leaders influencing the course of today’s economy through policy and business decisions. “Business people need to understand the role of the policy process in their business,” Pustay said of his half-dozen years teaching the distance course. “Students in the class get a better picture of how practitioners conceptualize problems and operate in the real world.”