Tom Barkin, President and CEO of the Federal Reserve Bank of Richmond, was the featured speaker at an economic symposium in Aiken.
The Wednesday event, sponsored by the Rotary Club of Aiken, attracted 400 people, including South Carolina Lt. Gov. Pamela Evett (R) and Attorney General Alan Wilson (R), to the USCA Convocation Center.
Barkin led his presentation with a topic on everyone’s mind: inflation. He said inflation is unfair, creates uncertainty, and the effort to negotiate with suppliers or shop around for better prices is exhausting. He coupled that with the national and global upheavals, including last year’s government shutdown and conflicts in Ukraine, Gaza, Iran, and Venezuela.
Despite all those challenges, Barkin said the U.S. economy showed a marked resilience.
“I’ll give you just a few numbers on that third quarter,” he began. “GDP (Gross Domestic Product) has come in at a very strong 4.4% growth in consumer spending, which makes up nearly 70% of GDP, and remained healthy through the fall. The unemployment rate ticked down in December; it’s now 4.4% for context, the unemployment rates this country has only been 4.4% or lower, three times in our working lifetimes.”
Barkin’s presentation included a fireside chat-style question and answer period. He fielded questions from Dr. Johney Green, Director of the Savannah River National Lab (SRNL), and Chris Verenes, Chairman of Security Federal Bank.
Among the questions, Verenes brought up the current level of wealth inequality, asking what the consequences and potential remedies are.
Barkin said there are ways to address the concerns, including a combination of fiscal spending or taxing.
“That would not be popular, probably by many,” he observed. “So, I think the challenge to inequality is more long-term. It’s just more, I’ll call it, political. How do societies survive? I think that’s the challenge, per se, come up and analyze. It’s just a political challenge.”
In addition to Evette and Wilson, local elected officials were in the crowd. North Augusta Mayor Briton Williams sat with the lieutenant governor and Lessie Price, a member of the Aiken City Council.
There were also leaders from educational institutions and economic development organizations. When the symposium opened to questions from the audience,
Will Williams, President and CEO of Western SC, mentioned the economic growth South Carolina has had and asked what policies, workforce initiatives, and infrastructure investments should be made to maintain the positive trajectory.
Barkin said the Palmetto State should look at workforce participation, because those are lower than in some other states.
“Some of those are retirees, but it’s not all retirees,” he explained. “If you think about what it takes to get people off the sidelines, education is a huge part of it. K to 12, getting people ready, hard skills, but also soft skills, preparedness for the workforce, which I think South Carolina has spent a ton of investment in, and having people skill up attached to the jobs that are there.”
Phil Wahl, President of Security Federal Bank, took the opportunity to ask about how the strength or weakness of the U.S. dollar is felt through exporters and manufacturers, local economies, and community banks.
Barkin said the U.S. currency is what he called a “floating currency” that floats up and down based on interest rates and the strength of the economy in relation to other nations.
“When the dollar is stronger, that makes imports cheaper, so less inflationary, but it makes exports more expensive, so the less manufacturing happens in the U.S.,” he said. “The flip is true on the other side, the dollar is weaker when it’s a little more inflationary, but our goods are cheaper.
He said that currently, the dollar is maintaining its rise and fall within the same range for the past twenty years.
