I attended a conference in Beijing in 2003 sponsored by the Chinese government. While in China, I also met with several Chinese officials, including the new Premier, Wen Jiabao, officials of the central bank, and the agency in charge of maintaining the exchange rate of the Yuan, or Renminbi.

In several television interviews I was asked about the dollar/yuan peg and whether it was appropriate. I tiptoed through the tulips on the delicate aspects of that question, focusing instead on the basic dilemma.

The dilemma was that China was pegging its currency to the dollar, which was sinking. While a depreciating dollar might help offset economic weakness in the United States, the sinking yuan tied to it certainly seemed inappropriate for the booming Chinese economy.

Diplomacy became trickier when I was leaving the exchange pegging agency and was asked to sign their guest book. The book was huge and they opened up an entire blank page for me. About all I was sure of was that a large handwriting font was called for. I have (or had) a photograph of that scene that I’ve looked for unsuccessfully for months. It shows exactly what I wrote. The best I can remember, it was something like this:

Now that I’ve guessed at it, I’ll probably find the picture tomorrow.

A highlight of that visit was the audience some of us had with the Premier in the Great Hall of the People. He went around the circle and asked some of us for any advice we had to give him. A distinguished scholar sitting next to me, a Harvard professor I believe, shared his concern about so many single male Chinese coming off the farm into the cities to work without the stability offered by family. He urged the Premier to allow wives to come too lest the husbands succumb to the temptations of the city.

I was called on next. My contribution was that I thought the professor had been watching too many episodes of “Sex in the City.”

On that visit, I reached the conclusion all over again that we don’t want a land war with China. While I was walking up a long stretch of the Great Wall, what seemed like millions of Chinese soldiers in ill-fitting green uniforms were walking down. I felt like a salmon swimming upstream. The soldiers were apparently on holiday. While they did not look menacing, they did look infinite in their numbers. They just kept coming and coming. I thought of what it must have been like during the Korean War when the Chinese poured across the 38^th parallel.

On a lighter note, there were two mysteries I never was able to solve during that trip. One was, when do you use Yuan and when do you use Renminbi for the Chinese currency. I had it explained to me several times, but the explanations were all different. I never got it.

The other, greater, mystery was this: Why did they change the name of the city from Peking to Beijing but didn’t change the Peking duck to Beijing duck?

Either way, they are highly overrated.

When I was president of the Dallas Fed (1991-2004), I frequently spoke to the graduates of our rank-and-file training programs. I just ran across the following summary outline someone made of my remarks on such an occasion in February 2002. Maybe you can use my suggestions on your kiddos. Commenters may want to add their own favorites to the list.

1. Plan your life on paper. Where would you like to be in your career in 5 years?  10 years?

2. Do a time line.

3. Write out your goals, objectives and ambitions. Be very specific and detailed.

4. Translate your goals into activities and schedule those activities on your calendar. Write your to-do lists with your goals in mind.

5. Watch people and take an inventory of those you admire. Check their attributes against your own. You can learn from people even if they aren’t perfect.

6. Talk good. An observation: The higher the level or rank of a person, the simpler their language. (The “good” was intended as a joke.)

7. Develop your brand.

8. Have an Australia—a plan B. (As in “I’m not dependent on this job. If it doesn’t work out, I can always go farm my little plot in Australia.”)

9. Beaver chip. Reduce large goals and objectives to bite size.

10. Focus like a laser. Don’t get distracted on unimportant tasks. (This is where “do as I say, not as I do” comes in.)

11. Keep a journal or a notebook.

12. Read.

13. Spend time outside your comfort zone.

14. Be alert for paradigm shifts.

15. Be alert for epiphanies.

16. Understand the difference between “playing the percentages” and trying to “beat the odds.” (Mothers call attempts to beat the odds “tempting fate.”)

17. Try to see familiar things from a new and different perspective.

18. Plan your life and career with the end in sight. Pretend you are writing the report on what you’ve accomplished.

19. Understand that you know more about the future than you might think. Some basic skills that will probably remain important include these:

Writing well

Speaking well

Comfort with technology

Pleasant to be with

Interesting to be with

Not a whiner

Pleasant to look at

20. Realize that leadership comes in many flavors.

21. Figure out why you will be successful. In other words, find the source of your self-confidence.

22. Realize that life is a journey, not a destination. (Sorry about that.)

Put the Dallas Fed on your shoulders and climb high.

Bob McTeer

 Next day below that:  “Who are you to tell me what to do?” 

The Tobin Tax came up on financial TV the other day. It brought back memories.

I gave the keynote address at a conference in Dax, France  in 2001, celebrating the 200th anniversary of the birth of Frederic Bastiat, most easily described as the French Adam Smith. The conference was by Le Cercle Frederic Bastiat and was sponsored by the International Society for Individual Liberty and Libertarian International. I titled my remarks, Why Bastiat is My Hero.

(According to the notes I wrote on my text, I was asked to stay within 40 minutes or the moderator would “agitate a cow bell from the Perinese.”)

During the afternoons we took field trips to places associated with Bastiat, including the dedication of his bust in a local village square, a visit to his country home, and a visit to his birthplace.

At the bust dedication, we encountered hostile demonstrators who had covered the bust with a drape. They chanted slogans and helped themselves to the outdoor buffet that the locals had prepared for our group. Small groups formed and engaged in debate, and the violence that seemed inevitable was avoided.

The demonstrators showed up again the next day for another tense encounter. They had covered the plaque signifying Bastiat’s birthplace on a narrow street–more like an alley. Given the close confines, I was sure violence would break out, especially when a female member of our group climbed up to remove the cover from the plaque. It occurred to me that I had missed the sixties, so now was my time. Also, I wasn’t sure how I would find my wife during the melee as she was shopping in one of the little shops facing the alley, oblivious to the violent clash of ideologies about to occur.

What was this ideological clash all about? Well, we were individuals from several countries, but mainly Americans, many of whom considered ourselves libertarians, paying homage to a French lover of liberty born 200 years earlier. They appeared to be French socialists whose primary cause was some version of the Tobin Tax. They wanted to tax financial transactions (stock, bonds, foreign exchange?) and give the proceeds to the poor.

The alpha male in the group was dressed in all-black — pants, shirt, coat and hat — and appeared to be a professional actor. He led the chants with great volume and gusto. The main epithet he and his mob used on us was “gangsters.” They were calling us gangsters. We thought of ourselves lovers of liberty, but they were calling us gangsters. I couldn’t figure it out.

There are several versions of the “Tobin Tax,” named after James Tobin, Nobel-prize winning economics professor at Yale University. We never know who our fans will turn out to be.

I later learned that the protesting group called themselves ATTAC, and the tax they had in mind was a one percent tax on international currency transactions. They considered their “Tobin Tax” to be a tax on globalization as well as a source of tax revenue for the poor. I understand they had some subsequent success in French politics.

Postel was a prisoner of war in Korea when I was very young. We prayed for him every Sunday at church. The preacher would describe the conditions he endured in prison camp, including what he had to eat to survive. If he was anywhere close, it's hard to imagine.

The prayers were answered, and Postel came home at the end of the war. They had a parade in the county seat welcoming him home. I don't remember what condition he was in, but it must have been reasonably good or I would remember.

Around 1997 or 1998, coincidentally during the Asian monetary crisis, I flew from Tokyo, which seemed pretty plastic to me, to Seoul, which seemed much more like home. I'm sure Postel had something to do with that. I told Postel's story to some government officials who probably fought side by side with him.

(When I flew back home from Seoul via Tokyo, I plugged the ear-phones in and they were playing all the songs from Elvis's 1968 Comeback Special. I had the video at home; so I already knew the sequence of songs.)

I don't know what happened to Postel-whether he is still living or not. My sister, who lives in the area, checked all the phone books from nearby towns, but couldn't find him listed.

Either way, some of us will always remember Postel Nixon, along with faceless others who served, on Memorial Day.

Enough about the President. Now, let's talk about me. The issue struck a chord with me because I've given many commencement addresses, including two at the nation's finest university, Texas A&M. For the first one, the A&M President, Bob Gates, gave me a much-appreciated book of Texas Flags. For the second one, almost two years later, he gave me another copy of the same book on Texas flags. I appreciated it too, but consistent with the law of diminishing marginal utility, I appreciated it a little less than the first one. No mention was made of an honorary degree.

As Chancellor, I gave several commencement addresses at the other universities in the Texas A&M System. No honorary degrees there either. While Chancellor, but not because of it, I addressed the graduating class of a very special high school in Joplin, Missouri. I looked forward to that one so I could tell some Janis Joplin stories. It turned out that Janis Joplin and Joplin, Missouri, had no connection to each other. I knew she was from Port Arthur, Texas, but I thought they may have named the school after her anyway. I got no honorary degree there either.

While still at the Fed, I gave commencement address at several universities-not in the A&M System-and one high school. No honorary degrees from any of them. So far, I was batting zero.  My first address was a special honor because it was Texas Woman's University, once an all-women college. Women still constituted a large majority of the student body. I'd always liked girls – let's drop the political correctness for a moment – and I was pleased that a whole university full of them wanted to hear my wisdom. By the way, I was formally invited by a neat lady, who was president of the university. She was neat, but not as neat as the current president, who is really something. Anyway, there was no honorary degree.

One unusual situation was when I gave the commencement address for Texas Lutheran University. They gave an honorary degree, but not to me. I made the talk, and Red McCombs got the honorary degree. To quote Roger Miller, "I was a man of means, by no means," but Red McCombs was a man of considerable means, which may have played a role in who got the degree.

Texans know Red primarily for his many car dealerships and other business ventures. Others may know him as a former owner of the Minnesota Vikings. The two of us had dinner with the president of the university before the ceremonies, and listening to Red McCombs' stories was a rare treat.

What I said above is true, but not the whole truth, which would include the fact that Red was also a scholar, a gentleman and a generous supporter of higher education, as evidenced by the McCombs Business School at the University of Texas. I know he's a genuine scholar because he used to read my stuff at the Dallas Fed and send me hand-written comment letters.

My biggest commencement honor was being invited by students of Midland High School, a very large and very good public high school in Midland, Texas. For a few years the Fed had conducted "Fed Challenge" competitions for high school students. The students would form a team, usually under the guidance of a high school economics teacher – there were two really good ones at Midland – and study the economy, learning everything that was relevant to an FOMC meeting. The competition was to conduct a FOMC meeting before Fed judges and then respond to questions from those judges.

The Dallas District had won the national competition the first three years with all three wins going to Bryan High School, one of two public high schools in Bryan/College Station, Texas, the home of Texas A&M. A school from another Fed District won our fourth year, and we were now in our fifth year of competition.

The Midland High School team won the District Competition and went to Washington to compete for the national championship at the table inside the Board of Governors building where the real FOMC meets. Well, you know I wouldn't be telling this story if the Midland team hadn't won, with a very cute female person playing the role of "President McTeer." Alan Greenspan presented the championship trophy.

Now, to get to the point finally, I was in the lobby of the hotel when the victorious Midland team arrived in what could only be described as a state of rational exuberance. After a round of high-fives and some recounting of some of the high points – high points of an FOMC meeting? – the students asked me if I would give the commencement address at their upcoming graduation. (Just writing that made me verklempt.)

I told them I doubted they had the authority to make such a request on behalf of the school, but I said if such a request did come from the principal, I would be inclined to accept. When the principal called a few days later and extended the official invitation, I happily accepted, even though by then I'd learned I'd have to cancel a bankers meeting with excellent live entertainment to be there.

You can find my address here on my web site.

Tired of coming away from these events empty handed (this was before the Texas Flag books), I made a bold request of the principal. I asked if he could have an inscription made of a T-shirt that designated me as an honorary graduate of Midland High School. I still wear that shirt proudly even though some college graduates smirk at the old guy wearing a high school shirt.

They gave me the T-shirt, but not an honorary degree on fancy, embossed paper. My record remained perfect – many commencements, no honorary degrees, either as President of the best Reserve Bank for almost 14 years or Chancellor of the best large state university system for over 2 years.

Five months after I retired from my second career and joined NCPA, the best little think tank in the country, I got a call from the president of Austin College, an outstanding liberal arts college in Sherman, Texas. He didn't say they wanted me to give a commencement address. He said they wanted to give me an honorary degree, and, by the way, would I give the commencement address as well?

I am now a proud holder of a "Doctor of Humane Letters" degree from Austin College. My pride is not lessened by diminishing marginal utility because it is the first and only.

One more thing: I've looked and I've looked at that embossed diploma. Nowhere on it does the word "honorary" appear. I am a "Doctor of Humane Letters," not an "Honorary Doctor of Humane Letters." What does it mean? I'm not sure, but I think it means I can write good, or at least humanely.

I haven't watched television for a couple of days; so I don't know how the flap turned out. But, if it didn't happen today, Mr. President, be patient. Your day will come.

The Bull is in the China shop
Breaking everything in sight.
The Bear is in the garbage dump
Grubbing the last bite.

The Alligator waits his turn
Crouching kind of offish.
Bear meat will have to do
The bull gave at the office.

It's Alan Greenspan's fault
All eagerly agreed.
He pushed rates too low
Calmed our fears and fed our greed.

He shouldn't have let them do it
It's not common sense.
To police your own behavior
And counter-party risk.

His name is tarnished now
Spoken with derision.
Financial markets apparently do need
Adult supervision.

So get a long-handled shovel
For leverage if you need it
The alligator is on the loose
And someone has to feed it.

                                            Bob McTeer

Buddy Holly's Plane Crash Stopped the Music 50 Years Ago Today

I paid tribute to Buddy Holly last year; so I'll be brief today. Last year I mentioned my PBS interview with Bob Edwards when he asked me if it was true that I had visited Buddy Holly's grave. I admitted it; so, he then asked me what Buddy Holly ever contributed to the economy. I said Buddy's Rave On would have made a great anthem for the new economy of the late 1990s.

A reader emailed me to suggest another Buddy Holly song for today's economy: Crying, Waiting, Hoping. Yes, precisely. But hopefully, we can Rave On again soon.

Best Investment Advice 

The best investment advice I've heard is from Will Rogers, who advised:         

"You buy your stock, and, when it goes up, sell it.  If it don't go up, don't buy it."

The next best is the cowboy way:       

The best way to double your money is to fold it over and put it back in your pocket.  

Best Management Advice 

The management advice that resonates with me is paraphrased from Casey Stengel:       

You keep the guys that hate your guts away from the guys that are still undecided.  

I can't figure out the flaw in the Peter Principle; so maybe there isn't one. Peter's Principle says, roughly, that         

People keep getting promoted as long as they do their job competently. They stop getting promoted when they don't do so well, or reach their level of incompetence. Therefore, everyone is incompetent in his current job and should be demoted back to highest level of competency. 

The Most Useless Advice      

The most useless advice comes from Kenny Rogers:        

You've got to know when to hold them and know when to fold them. 

Sounds good Kenny, but come on. When do you hold them, and when do you fold them? 

Two Things I Don't Understand 

I don't understand many things, but here are two of them:       

When and why did our Senators and Congressmen decide that bullying the people testifying before them is a cool thing to do?       

Why hasn't mark-to-market accounting not been suspended or modified yet? Don't the authorities like low-hanging fruit? 

The Cause of Our Financial Crisis 

Congress has decided:          

The cause of our financial ills is high executive salaries. Executives must be punished by making them drive to Washington in hybrid cars.

His football record was 87 wins and 27 losses

       

Owner Sonny Seiler permitted me the honor of meeting UGA in his Savannah Office last January.

Sonny was the defense attorney in the trial depicted in Midnight in the Garden of Good and Evil. He played the judge in the movie.  Damn good man!