Download ANNIVERSARY - Marietta College

Volume 10, Issue 2
April 2008
EDITOR
Greg Delemeester, Ph.D.
Professor of Economics,
Marietta College
CONTRIBUTORS
Susan Berry
Megan Brothers, C’09
Jackie Hartle, C’11
Brandi Mitchell, C’09
Special thanks to
Megan Foraker
Dr. Jacqueline Khorassani
Paula Lewis
Tom Perry
On the web @
economicroundtable.org
THE LEGACY LIVES ON:
ECONOMIC ROUNDTABLE OF THE OHIO
VALLEY CELEBRATES 25TH ANNIVERSARY
By: Susan Berry (ERT Board of Directors)
“An idea is only as good as the people
behind it,” stated Marietta College economics professor Bert T. Glaze to a group of nine community
leaders in 1982. The group was invited by Glaze
to provide feedback to his proposal to found an
economics club in the area. The group was evidently impressed with his concept, as the Economic Roundtable of the Ohio Valley celebrates
its 25th anniversary this coming April.
Under the leadership of Dr. Glaze, the
organization was founded by the staff of Marietta
College’s Department of Economics, Management, and Accounting and several community and
Photo: Courtesy of
Marietta College
Please turn to ERT, page 2
Inside
This
Issue
•
ERT Legacy
•
Customer Service
•
Death of
Monetarism
Will Your Customers Choose You?
By: Jackie Hartle
Barbara A. Perry Fitzgerald, retired Senior Vice President of Store Operations for
PetSmart, Inc. and the Executive-in-Residence at
Marietta College's McDonough Center for Business and Leadership, spoke to the Economic
Roundtable of the Mid-Ohio Valley on Feb. 13,
2008. Fitzgerald's speech, "Comments on Customer Focused Organization Process", was
meant to inform and educate attendees on the
importance of customer satisfaction. This was a
topic of great importance to many attendees
Photo by: Meg Foraker
Please turn to Fitzgerald, page 4
ERT, continued from page 1
page 2
business leaders in Wood and Washington Counties. Its principal purpose was to provide prominent and
distinguished speakers to college the community in order to develop a better understanding of the global
economy and general environment in which the private enterprise system operated. Glaze modeled the
new organization after the Detroit Economic Club, to address governmental, economic, public policy,
and social issues.
The first official event for the Economic Roundtable was held on April 11, 1983, at the Lafayette
Hotel in Marietta, Ohio. Dr. Charles Reeder, Chief Economist of the E.I. DuPont De Nemours Company
spoke on “The Current State of the U.S. Economy and the Outlook for 1983.”
Starting with approximately 170 members in 1983, the current club membership consists of over
230 professionals from industry, academia, and public service, as well as high school and college students. The club has grown over the years from membership dues only to now include corporate sponsorships, non-profit status, and a substantial Endowment Trust.
This impressive group has sponsored over 140 public lectures over the past 25 years. Past speakers
have included Nobel Prize winners in economics, a member of the English Parliament, a U.S. Secretary
of Labor, a former chairman of the President’s Council of Economic Advisors, university professors,
investment bankers, business journalists, presidents of Federal Reserve banks, corporate CEO’s, and
many others. Notable names consist of a veritable “who’s who” from business, economics, and politics,
including Steve Forbes, Ted Kennedy, Jr., Ted Turner, Gaston Caperton, James Tobin, Lawrence Klein,
Bernadine Healy, Allen Sinai, John McCoy, and Paul Krugman.
Glaze’s legacy certainly has lived on. Glaze, who retired from Marietta College and passed away in
2004, handed over the reins of the organization to the economics faculty at Marietta College. Current
chair, Dr. Jacqueline Khorassani, stated, “Bert Glaze was a visionary in many respects. It was mainly
because of this man’s vision and tireless efforts that the Economic Roundtable has been able to bring
internationally know speakers to the Mid-Ohio Valley.”
The anniversary celebration luncheon will be held on Wednesday, April 30, at the Parkersburg
Country Club. Featured speaker will be Dr. Thomas R. Saving, Professor of Economics at Texas A&M
University and Trustee of the Social Security and Medicare Trust Funds. Many items from the organization’s archives will also be displayed at the luncheon. Current officers of the organization will honor
Glaze’s widow, Emma, and several of the founding officers and board members of the original group at
the luncheon meeting.
Additional information on the Economic Roundtable of the Ohio Valley can be found on the organization’s website at www.economicroundtable.org. Individuals wishing to join the organization may do
so by contacting Jeff Welch, VP of Membership, at (740) 374-6134.
For questions and comments contact: Greg Delemeester, Marietta College, Marietta, OH 45750,
(740) 376-4630, [email protected].
MACRO & micro is also available online at http://economicroundtable.org/mm
Page 3
The Death of Monetarism
and the Irrelevance of the New Monetary Consensus
By Megan Brothers and Brandi Mitchell
This year’s Milton Friedman Lecture was presented by Dr. James K. Galbraith, professor of
Government at the LBJ School of Public Affairs at the University of Texas at Austin. Galbraith’s talk
was titled, “The Death of Monetarism and the Irrelevance of the New Monetary Consensus.” Dr.
Galbraith spoke on March 31 in the McDonough Auditorium on the campus of Marietta College. His
talk can be broken down into three areas: monetarism, the new monetary consensus, and the question
and answer session.
The lecture began with a discussion about monetarism and its chief
adherent, Milton Friedman. Galbraith noted that, according to Friedman,
“inflation is always and everywhere a monetary phenomenon.” Consequently,
monetarists believe that whenever too much money is created, inflation will
result. If the overall inflation rate is stabilized, monetarists believe that the
economy will tend to regulate itself toward the natural rate of unemployment.
The natural rate of unemployment represents the hypothetical unemployment
rate consistent with stable inflation and maximum production. Galbraith, on
the other hand, believes that the application of monetarist ideas have done
more harm than good, as in the deep recession of the early 1980s.
When monetarism fell out of favor with central bankers, a “new monetary consensus” was developed that focused on controlling interest rates rather
than the money supply. The proposed rule would have the central bank responding to both price and
aggregate demand shocks. The consensus view was that monetary policy can reduce inflation permanently at a reasonable cost to output and employment. It also states that a well-timed increase in interest rates can help prevent inflation. Galbraith, however, believes that new monetary consensus is also
irrelevant. According to Galbraith, the key to understanding the macroeconomy requires a Keynesian
approach that recognizes that the market system is inherently unstable. Citing Hyman Minsky,
Galbraith noted that when an economy has experienced a long run of stability, financial institutions
will develop overly-optimistic expectations about the future and, consequently, tend to take more risks
with their lending practices. This, Galbraith argued, is precisely what has happened to the current
housing market through the issuance of sub-prime mortgages and excessive greed on the part of lenders.
Photo by: Meg Foraker
The final part of Galbraith’s talk was a Q&A session. Dr. Galbraith was asked several questions about the economic situation in America today. Galbraith said that the recession that America is
facing right now could last up to ten years if nothing dramatic is done to help correct the problem. He
also believes that next year the recession will be worse than it is this year and our new president will
face some tough situations early on in his or her term. Galbraith believes that the proposed solutions
will help slightly in the short run but probably will not fix any long term problems. For example the
interest rate cuts and tax refunds may help for now to add a little boost to the economy by allowing
consumers to buy more but this will not fix the long term problem. Galbraith offered some suggestions of his own. One suggestion was to do what was done in China. China boosted its economy by
rebuilding cities and repairing railroads and highways. Galbraith is also in favor of wage standards
which, he says, have greatly helped the Scandinavian economies.
Fitzgerald, continued from page 1
Page 4
because in today's world there is such a large amount of choice facing the average consumer that a
company must find a way to differentiate itself from its competitors.
To demonstrate the amount of choice a consumer is presented with Fitzgerald did a little research. If a resident of the Mid-Ohio Valley were to get in an automobile accident today, they would
need to make some choices. First, they'd need to find an auto repair shop of which Fitzgerald found
there are 68 in the area. And if they were injured and needed help paying their medical bills, they
would have the ability to choose between 152 different lawyers. This alone demonstrates that there is a
lot of choice for the same product out there, and Fitzgerald addressed the fact that without customer
satisfaction and the subsequent retention of customers a company will not exist for very long. This is
why, Fitzgerald says, customer satisfaction, and what she refers to as customer "Delight," are so important.
Fitzgerald explained that customer "Delight" means going beyond simply satisfying the customer, and that it is attained when a company strives to achieve the highest levels of customer satisfaction. She then explained that once this happens, a customer will have little to no incentive to look anywhere else resulting in high customer retention.
Moving along, Fitzgerald used the time she spent working with PetSmart, to expand upon this
idea. Fitzgerald explained that when she first arrived at PetSmart the company was in pretty bad shape.
Stocks had plummeted to an all time low of $2.25 after having been as high as $48.00 just four years
before, and profits were non-existent. In other words, the company was on its way out unless something changed.
After extensive studies and research into the company's current practices, Fitzgerald explained
the steps PetSmart took in order to turn the company around, and suggested that these could be applied
in many different situations. In PetSmart's case this process was tagged "PetSmart Unleashed", and the
steps went as follows: develop a compelling vision, identify the customer's needs and expectations, define the customer service strategy, secure the commitment of management, create a culture that is customer focused, develop and train managers and associates, provide coaching and counseling, measure
and reward performance, establish guidelines for customer recovery, and finally modify operations to
enhance the customer focused culture.
Realizing that customer service may seem like a rather elementary principle, Fitzgerald emphasized the fact that it is the implementation and sustainability of such a concept that is so important. After all, it is as Fitzgerald said in Bob Dylan's words to conclude her speech, "You're gonna have to
serve somebody."
Upcoming Speakers
•
•
•
Dr. Tom Saving, Professor of Economics, Texas A&M University. April 30, 2008 at the Parkersburg Country Club. Topic: The Future of Elderly Entitlements.
Dr. H.G. Parsa, Chair of Food Service and Lodging Management, University of Central Florida.
September 9, 2008. Location and Topic TBA.
Dr. Deirdre McCloskey, Professor of Economics and History, University of Illinois-Chicago.
Late January 2009.