Women in Economics: Esther George
This 27-minute podcast was released June 26, 2019.
“You can't work for the central bank without understanding how the principles of economics come to bear on everything we do,” says Esther George, president of the Federal Reserve Bank of Kansas City. George talks with Jennifer Beatty, an assistant vice president at the St. Louis Fed, about her background in banking and growing up in rural Missouri. George discusses how she expanded the role of women at the Jackson Hole Symposium and shares her experience as an FOMC participant under different Fed leaders, including former Chair Janet Yellen.
Jennifer Beatty: Hello. I'm Jennifer Beatty, and you're listening to Women in Economics, a podcast series from the St. Louis Fed’s Timely Topics audio channel. Today I'm speaking with Esther George, who is president of the Federal Reserve Bank of Kansas City. Thank you for joining me today, President George.
Esther George: Thank you, Jennifer, for being here.
Beatty: So tell our listeners a little bit about yourself. You're the first woman to serve as the president of the Federal Reserve Bank of Kansas City in its 105-year history. That's very impressive.
George: Well, I'm honored to get to serve in this role. I grew up in northwest Missouri on a farm, a very rural part of the state. And our farm produced corn and soybeans. We raised cattle there. And I went to a very small high school. I graduated with a class of some 50 other kids, also largely growing up on farms. I went to college in Missouri at a small university there. And when I graduated, I decided to head to the big city, Kansas City.
You don't find many farmers around the FOMC [Federal Open Market Committee] table today.
Beatty: I'm sure it brings you a unique perspective.
George: We all come from many different places, and of course, your topic is focused on women. But the perspectives that you bring to anything you do really reflect that background and how that influenced your choices.
Beatty: So you've spent your career at the Kansas City Fed, which is one of the 12 Reserve banks situated around the country that make up the Federal Reserve System. Can you tell us a little bit about your career progression here and why you've stayed?
George: Well, I came to the Kansas City Fed in 1982. I had had a job with another company as a business analyst, and back then when you were looking for a job, you opened the newspaper and looked at the want ads. And there was an ad from the Kansas City Fed for a bank examiner. And it looked interesting. I liked traveling. And so I applied for that job. And that was my first job with the Kansas City Fed.
And I stayed in that job probably for a good 10 years or more. It was the time of a banking crisis here in the Midwest, and so there was a lot of challenge in that job. I transferred from there and went to the research division. I worked in our data collection area, the research library. It's where I first got to know a number of the economists that worked for the Federal Reserve.
And from there I did any number of other things. I was in the public affairs area. I was in the human resources area. I eventually came back to my roots as a bank examiner and headed the division of Bank supervision, became the chief operating officer for the Bank at one point, and here I am now.
Beatty: The president of the Bank.
George: President of the Bank.
Beatty: You talked a little bit about the fact that you oversaw the supervision division for the 10th District. So many of our listeners might not know or understand the Fed's role in supervising the nation's banking system. Could you talk just a little bit about that role and the importance of the Fed's role in ensuring sort of a soundness for the financial system?
George: Yeah, so if you think about it, it's really core function, the Federal Reserve is trying to achieve economic and financial stability. Both of those are really complementary ingredients to having an economy that can grow and benefit the lives of every American. So in addition to monetary policy, the Fed's role as a bank supervisor helps ensure that we have a safe and sound banking system, that consumers have fair access to credit. And so the job heading the division of bank supervision here at the Bank, as it is at the other 11 banks, was really one to make sure we were carrying out the Board of Governors’ regulatory program, that we were thinking about the context of what the economic drivers were in our region, that we were making sure the examiners that went out there were applying sound judgments so when they walked away, their perspectives about the nature of the risk in those institutions and what was driving that could be appropriately calibrated.
Beatty: So being part of the effectively banking sector or supervising banks, it's a pretty traditional field, a male-dominated field. So can you share some of the struggles you might have had as a bank examiner—or even as the head of supervision for the Kansas City Fed walking into, perhaps, rural male-dominated banks—and what struggles did you have, and how did you overcome them?
George: So the banking industry has, for some time, been a male-dominated industry. That's changing slowly, but yet, today it is. I will tell you in my own experience, though, the issues were less about gender, and they were really issues that related to what was driving the institution, what influences were affecting their community, and how risky were their borrowers at the time. Those kinds of judgments are really what set you up to have to be well-informed, to understand well, to listen well what was going on in that community.
And so the struggles really came from when there was an economic downturn, when something that really hit the bank, or that community, began to really upend it in many respects. And the struggles there were to make sure, as you sat across the table from that banker, you were both listening to what the issues were and then applying informed judgment about how the Federal Reserve would respond to that.
Beatty: You're leading an effort to review and look at the Fed's role in the nation's payment settlement system. Why is this important for the Fed, and why is it important for you to play such a prominent role in this effort that the Fed has undertaken?
George: This has been actually one of the high points, I think, of my time at the Fed is to be involved in this effort to look at how the payment system is changing and what role the Fed should play in seeing that that payment system continues to evolve to the benefit of the American public. The Fed, as you know, has been involved in the payment system since its founding.
It started with paper checks and making sure that those got moved around the country in an efficient fashion. And you fast forward that today, where technology has dramatically changed the landscape for payments. Today we can use mobile phones. We can use other electronic devices to pay for things, just as we do when we order them. And as you see that payment system evolving, the question comes up about will it continue to operate with integrity, meaning it's safe, will it continue to be accessible to all parts of the country, whether you're in a rural part of the country or in an urban area?
And those are issues that are very important to the Fed. Those have contributed to economic and financial stability over time. And so after working for several years with many players in the private sector, from banks to merchant organizations, the Federal Reserve went out to the public last fall to say what role should the Fed play, and how will our economy work with more real-time payments. It's an exciting proposition, I think, to think about how we can modernize those payments in the United States, and I think the Fed's historic role will continue to be important.
Beatty: So you don't hold a formal degree in economics, but you've worked with economists for most of your career. How have the roles you've held at the Fed been shaped or informed by the economists that you've worked with?
George: So you're right, I don't have a, a formal degree in economics, but you can't work for the central bank without understanding how the principles of economics come to bear on everything we do. That's true in monetary policy. It's true in the bank supervision roles I've had. It's true in the payment space, if you think about it. Because what economics brings to the table is an understanding of how to interpret data, what critical thinking needs to be applied to many of these issues, how analytical rigor and methods we can use to better understand how each of those three missions that we have are influenced by what's going on.
So my experience in the economics part of what the Fed does has been to apply those across most everything we do. And I think understanding how economics—and sometimes we make it more quantitative than I think necessary because what it really is boiling down to is understanding the incentives that people have, how people make choices, and that, of course, affects everything we do.
Beatty: In turn, you have a banking perspective and a wider perspective that you're bringing to your colleagues at the FOMC table and really to the Kansas City Fed overall. So how has your perspective influenced the economists that work here at the Kansas City Fed and the economists that you work with in the System overall?
George: Well, I can't be sure how it's influenced others, but I can tell you how I interact with them. We have a great team here that I work with, certainly to get ready for FOMC meetings. Part of what I try to bring, and I see this particularly as we hire new economists, they come out of school thinking very quantitatively. They're able to apply some of their training in ways that they are solving for math problems. They are solving for representations of the economy that are more quantitative.
And what I try to do is describe, either through my own experiences in terms of how the real economy works, how can we take that kind of training and apply it to how we need to understand the way the economy works today. And that can result in coming up with some very interesting questions really to try to broaden our thinking on how much do we understand the economy, how much do we listen to others in our community, business contacts, and others who are in that economy to bring to bear on the policy decisions then that we make at the FOMC.
Beatty: Switching gears a bit, I wanted to just ask you about mentors you may have had in your career, and how did they help you achieve success?
George: Yeah. I've had, actually, a number of mentors, both formal and informal, men and women, over my career that have been very influential. There are two that I would highlight for you, one a woman, and one was a man.
A woman actually early in my life, in high school, again, a small high school, offered one foreign language. And this particular teacher who taught French, encouraged me to enroll in that class. And I have to tell you, at first I thought, why would I ever use French? And because of her influence, because of her encouragement, not only did I take that course, but I became a foreign exchange student and I spent a summer in Europe. And through her influence, began to see the world in much broader terms than I might have otherwise, given my experiences to date. So that woman, that teacher, very influential to me early on.
Once I got to the Fed, I saw a number of people that I admired and that I thought were role models. But I will tell you, one in particular was the previous president of the Bank, someone I worked for when I was in bank supervision, Tom Hoenig. Known for having strong views of his own, but probably one of the things that helped me the most in my own career, as I watched him, was the way he would encourage others to express views.
And often when we were trying to solve for a supervisory issue or make a decision, would go around the table and ask us individually, "Tell me how you see it. Tell me what you think." And that early on encouraged me both to express, to think hard, to be very studied about my views on something, not just off the top of your head, but to really have your facts together, and to have your analysis ready.
That kind of encouragement to engage, whether I agreed or disagreed with the view, was important, and I think really represented one of the legacies that he left to this organization was a culture that really could allow for those differences to coexist in the Bank.
Beatty: So in turn, how do you give back? Do you mentor people? And what do you think the importance is of mentors play for women or other minorities that are in a field that's perhaps more traditional than, say, law or medicine, where roughly half of the entrants into those fields, are women?
George: So I think mentoring's very important. And I try to do that, again, both formally and informally. So within the Federal Reserve we have opportunities to do leadership exchanges. I participate in that. We engage in programming that involves both minority and women in banking, for example, to make sure that we are doing what we can, really, at a local level, at an individual level to influence those outcomes.
So I think it's very important that people that aspire to something, that people are working in a given area be able to look to leaders that they can either identify with, or that they can see expressly trying to lay the groundwork for that success. And mentoring has been a very successful way to do that.
Beatty: Over the course of your career, have you seen changes in the roles women play in the field of banking or economics?
George: They have changed. And that's the good news. Today we hear a lot about how much more needs to be done, and there's no question that women have many opportunities. And I think what you want to be aware of is, if they are not going into certain fields, what is the barrier? Is it because they don't see themselves there? Is it because they experienced something that may get in the way?
This is an area where emphasizing the opportunities, but also laying the groundwork so people can be successful there, is an important part of how you will get more women, you will get more minorities, to consider areas that maybe traditionally they would not have.
Beatty: Why do you think it matters that women play a larger part in these professions, and really ascend to the senior ranks of the Fed system overall?
George: So it's hard to know what the right number would be, and we have many ways we try to think about the need for more women or more voices. I think at the end of the day, for an institution like the Federal Reserve, we are doing work that touches the lives of every American. And if you look across the profile of America, you will find a very diverse society.
And so an institution like the Fed that is setting policy that affects the broad public, I think benefits both its credibility, I think its capacity to understand the issues, and then to apply solutions depends on having that kind of a diversity there. So when I see women at the table, when you see minorities at the table, it is a signal that the institution is bringing to bear. I will tell you at the FOMC, though, there are many differences that come to bear. People bring different backgrounds to that discussion. And what you really want is to create an environment where people feel like, I am able to contribute. And that is really, I think, the essence of how you will bring more diversity to both the Federal Reserve and to these professions more generally.
Beatty: You touched on the FOMC, and that might be one of your most prominent roles that you head up as the president of the Kansas City Fed. You're a participant on the Federal Open Market Committee, or FOMC, and you're a voting member this year in 2019. Give us a sense for what it's like to sit on the monetary policymaking body for the U.S., and in some sense for the entire world.
George: Well, for me it's a very humbling experience. Every time I walk into the boardroom at the Eccles building, for that meeting, I'm reminded of the tremendous history of this institution, the tremendous impact that comes from a large group of people sitting around the table trying to judge how to ensure that the U.S. economy functions at a sustainable level, that we make sure that employment is maximized, and that we make sure that prices remain stable. That's a tall order.
I approach this with a great deal of humility to remember the consequence of those decisions. And it causes me to listen carefully around that table. I have, during my time on the FOMC, had different perspectives on the right policy solution, but I have learned a great deal by listening to how others think about that, and I think that's one of the great strengths of the FOMC is the ability to take a large group, to have perspectives come out on the table, and then to be able to reach a decision that aired all aspects of that policy debate.
Beatty: What has been your experience, though, as a woman on this committee? And have you ever faced challenges where your viewpoint wasn't taken as seriously as you thought it should? How have you addressed it, and how have all of the diverse people around the table learned from it?
George: I'm sure there were times where I didn't think my viewpoint was valued as much as I valued it. Whether that was a function of my gender, I have to say, that has not been my experience. Any time that you have a view that you find maybe people aren't listening to, my first reaction is always to say, "Did I present it as clearly as I could have? Did I base it on a set of facts or with logic that would have made that argument better if I had tried something else?" And, I think, importantly, the respect around the table, to listen to one another, is an essential ingredient to what we do.
Beatty: You talked a little bit about coming from a rural community. How do you use that, as well as your gender, as well as the experiences you've had in your life, and you bring that to the FOMC table, how do you think that benefits policymaking for the entire country?
George: I think it has a tremendous benefit. I've been fortunate to serve in a region that is largely rural. And so my ability to translate the experiences I had to interact with people, to understand many times their perspectives, helps me relate to them, helps me to translate those concerns when I go back to the FOMC table.
I think it's a great reminder whether it's rural, whether it's minority, women, whatever aspect that you are bringing to those discussions, that context really does touch some aspect of what's going on in the economy. We know that people experience this economy differently. It can be because of income. It can be because of wealth or education. Many attributes. The more those perspectives are represented at the table, the public can trust this institution, that it is taking into account many variables when it makes its choices on monetary policy.
Beatty: So you've served on the committee during Chairman Bernanke's term, during Chair Yellen's term, as well as now Chairman Powell's term. Can you talk a little bit about the differences under the various chairs? Did the Committee function differently, and what was it like serving under the first female chair in the organization's history?
George: Well, I think it was great that Janet Yellen became the first woman to chair the Federal Reserve. And I think for many of the reasons you're talking about, the public could see that this isn't a function of gender, this is bringing the best qualified people forward to serve in this role. So across those leaders, you will find people that are qualified, that the committee was able to function on some longstanding principles under various leaderships, and that, I think is the real testament to both the institution, but I think people like Janet Yellen, and Jay Powell, that they are able to lead a large group of people, to manage the institutional dynamics, to manage the range of views around that table, and to show men and women can effectively lead in those roles.
Beatty: Shifting gears, I wanted to ask you about the “Esther effect.” It was a term that was coined by Bloomberg that relates to the larger role women play at the Jackson Hole Symposium. Since you became president of the KC Fed in 2011, the number of women in speaking and participant roles for Jackson Hole has increased. Can you describe how you're championing a more gender diverse program at Jackson Hole and the benefit of doing so?
George: The Jackson Hole Symposium is an international symposium, and it focuses on issues that affect central banks around the world. So right away you understand that there are some complex issues. There are some challenges there to think about. And so you want to bring the best people to that program, to that thinking, including the people that are participants, those that are asking questions and debating some of these issues.
The program, as we looked at it when I came in, really, the staff that helps plan it, identified a real opportunity for us to continue, to deepen, and to expand the role of women and minorities on that program. And the challenge is, how do you get to know who those people are, and where are the networks where you will find the best people that can bring light, can bring intellectual perspective to these issues? And it takes being committed to doing it. It takes really deliberate efforts to pick up the phone and call and find out who are the right people, get to know them.
And so I'm very pleased with what the staff has been able to accomplish with this program by bringing that kind of diversity to the table. In one of my first Jackson Hole Symposiums, the women at the program met around a very small table to talk about their experiences. Last year, there were enough women that we had to move out to the full patio to have room for that. So it is rewarding, and we will continue to work to bring that kind of diversity to the program.
Beatty: So you talked about increasing gender diverse programs at Jackson Hole and encouraging more women to have seats around the table, but how do you really get the outcomes and the benefits of having more diversity around the table?
George: So I think what it comes down to is making sure that you are accountable for the outcomes where you can influence those. So we can bring awareness to issues. We can host broad conferences that hopefully will influence people to take action. But in my own organization, in the role that I sit in, my accountability is to make sure that we are making those choices, that we are influencing those outcomes. That's true at Jackson Hole, being deliberate about, I will choose who will be on the program, and make sure that we bring that diversity.
It's true here in the Bank. Looking around our management committee table, those are mostly women today. When we have open positions, you must take steps to say, "How will I bring the kind of diversity I'm looking for? How will I use this opportunity to find the kind of talent that will represent the public and will make this a stronger organization?"
And that really is something that I want this Bank to be known for. It's something that I want to see us continue to make progress on as we think about diversity broadly.
Beatty: So what type of lasting legacy would you like to leave as the first female president of the Kansas City Fed? What will be the Esther effect on the Kansas City Fed?
George: Well, that's a good question. And I'm not done yet, so I still have time to influence it. But I think, as I've looked back on the traditions that I've benefited from, from past leaders here, I think there's nothing more important that I will do than ensure that the people that come to work here, and the leaders that we develop, understand how to effectively carry out the Federal Reserve's mission in this region.
And that means they will have to understand how the economy's changing. They will have to understand how the mission remains relevant, even as that change occurs. And I think on the topic we're talking about, it will make sure that all the resources and leaders that we bring to bear will be good leaders. Whether they're men, women, minorities, our goal is to really develop leaders that can carry out the work of the Federal Reserve in this region.
Beatty: What would you say to young women or minorities, people that are underrepresented today in the U.S. economy, who may be interested in studying finance, economics, banking, that may in the past just not have felt comfortable pursuing those types of careers?
George: So I think Loretta Mester, Mary Daly have talked about this a lot, and I think they're absolutely right. You want to encourage people to pursue what they're good at, to go after what they're interested in, and not to disqualify themselves for the kinds of things that you've just noted.
I think if you find something that looks like a barrier, you look at a profession to say, "I like that, but I don't feel like I belong" or "I don't see myself there," that's the time to seek out a mentor. That's the time to seek out someone to say, "What do you see as my opportunity?" Because many times what you need is confidence to move forward. You need that person that can say, "I see what you're capable of, and I'll help smooth the way for you to do that."
So that would be my message to people that are looking at these fields. If it's what you want to do, and you feel like you're good at it, you can find a way to pursue it.
Beatty: President George, thank you for spending time with us today and telling us your story in your own words.
George: Well, it's been a pleasure to talk to you, Jennifer. And I commend the St. Louis Fed for devoting attention and resources to thinking about these issues. This has been an important series. I have benefited from my time at the Federal Reserve, and having opportunities that both aligned with my capabilities to work in a culture that allowed me to develop over time. And I hope your series helps shed that kind of light for others, that they'll have those similar opportunities.