Finances and fly-fishing
Aug 30, 2012 / 1:30 pm
Every August, the world's financial markets shift their attention from the centres of global commerce; New York, London, Tokyo, to a mountain valley in northwest Wyoming. On Friday, they will hear a speech by Federal Reserve Chairman Ben Bernanke.
So how did Jackson Hole, Wyo., come to wield such outsize importance in global economic affairs?
In a word, trout.
For four years starting in 1978, the Federal Reserve Bank of Kansas City hosted an annual conference at different sites and different times of year. The event drew little attention outside the insular world of economic analysts.
Inspired by a conference the Boston Fed held near a picturesque New Hampshire site where the tearjerker "On Golden Pond" was filmed, the Kansas City Fed held its 1981 conference in scenic Vail, Colo.
Still no luck. The Vail meeting drew the conference's smallest crowd ever.
Officials at the bank pondered how to draw bigger names and more attention to the yearly confab. That's when they set their sights on Paul Volcker, then chairman of the Federal Reserve in Washington.
They decided to pursue Volcker by dangling the prospect of one of his favourite pastimes: fly-fishing. They needed to find a sure-fire trout-catching spot somewhere in the Kansas City Fed district, which covers Colorado, Kansas, Nebraska, Oklahoma and Wyoming, as well as northern New Mexico and western Missouri.
They considered somewhere in Colorado. But a fly-fishing expert said Colorado's waters were too warm for trout in August. Go farther north, he said. Go to Jackson Hole.
"I'd never heard of it," confessed Tom Davis, then the Kansas City Fed's research director and point man on the project, according to the bank's official history of the event.
The shift was made. And what's been known since 1982 as the Jackson Hole Economic Symposium took its place in economic lore.
Jackson Hole isn't even a town. It's a valley. The biggest town, Jackson (population 9,710), lies at the southern end of Jackson Hole. Arches made of elk antlers mark the entrance to the town square. The Fed conference itself occurs farther north, in a lodge in Grand Teton National Park, about 50 miles south of Yellowstone National Park.
The event now draws 140 people every year, including some of the biggest names in economic and finance. They come to enjoy breathtaking views of the Grand Teton mountain range and Jackson Lake, to hike and fish and to engage in intellectual combat in the halls of the Jackson Lake Lodge.
One annual tradition is the Friday night barbecue. There, some of the world's most high-powered economists don cowboy hats, string ties and other Western gear and sometimes join in a line dance.
At each year's Jackson Hole conference, the Fed chairman is a focal point. The head of the European Central Bank normally is, too. (This year is an exception. The current ECB chief, Mario Draghi, who is fighting Europe's debt crisis, cancelled plans to attend.)
In the final days of the Soviet Union in 1990, central bankers and economists from the former Eastern bloc came to Jackson Hole to learn how to manage post-Communist economies.
Not everything went well. The Soviet delegation had mistakenly checked the weather for steamy Jackson, Miss. The Soviet officials "almost froze" in Jackson Hole's brisk mountain air, recalled Roger Guffey, then Kansas City Fed president, according to the bank's history.
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