Bob McTeer

Optimism, swagger have been a big part of a successful reign

By Angela Shah
The Dallas Morning News

During his 13 years leading the Dallas Fed, Robert McTeer became the New Economy prophet who transformed a regional bank into the “Free Enterprise Fed.”

As Texas crawled out of the real estate and energy crash in the early 1990s, Mr. McTeer evangelized on productivity, trade and other tenets that eventually gave birth to the tech boom – and the longest period of prosperity in the U.S. economy.

He is expected to leave his position as Dallas Fed president and chief executive officer in November to become chancellor of the Texas A&M University System.

In a discipline known for being obtuse and, well, boring, Mr. McTeer explained economics “to where anybody could understand it,” said W. Michael Cox, the Fed’s senior vice president and chief economist.

“He put the Dallas Fed on the map.”

He gave speeches all over the world, raising the profile of the Dallas Fed. He has not been your father’s central banker: Often his policy talks were peppered with poetry he’d written himself.

“I think we are a reasonably significant player in the public policy process,” Mr. McTeer said of the bank. “I’m kind of proud of that.”

Economists in his shop give Mr. McTeer credit for making what has been called a dismal science more optimistic.

“Texas was the bank failure capital of the world,” said Harvey Rosenblum, senior vice president and director of research. “He focused on creative destruction and the need for old industries to die sometimes slowly, sometimes quickly to free up resources for the next wave of innovation.”

A star emerges

His star really took off along with roaring 1990s. At the peak of the boom, he was often mentioned as a possible successor to another New Economy champion: Fed Chairman Alan Greenspan.

“He’s a Texas federal banker, you know, with the swagger being ‘walking,’ ” said Mark Zandi, chief economist at Economy.com, referring to President Bush’s convention acceptance speech in which he said that in Texas, swagger is just walking.

“I find it refreshing,” he said. “He’s willing to speak his mind, he’s plain-talking. … I think he’s overly optimistic. I don’t always agree with what he says.”

A member of the Fed’s Open Market Committee, Mr. McTeer found a rapt audience for each of those plain-spoken words, which could move markets around the world.

“I think it’s kind of silly,” he said. “The Fed watchers follow us around hoping we say something we shouldn’t say. Ultimately our policies are based on how the economy is doing.”

As soon as he’s installed in College Station, the Dallas Fed’s board of directors will begin its search for a replacement. That person must then by approved by the Board of Governors in Washington.

No details were available Wednesday as to who might be his successor.

Mr. McTeer became known as the “Lonesome Dove” because he frequently was the sole dissenter on using monetary policy to take a harder line on inflation. Ever the maverick, he said he liked the moniker.

” ‘Dove’ has always been a bad word, but the ‘Lonesome Dove’ has been kind of fun,” he said.

“I’ve enjoyed it actually, being a little different,” he said. “Mainly, I’ve just tried to have fun in the job and not take myself too seriously.”

His own way

When callers complained about the country songs playing on the Fed’s hold music, Mr. McTeer declined to change it, said Mr. Cox. “He’s got a personality, and he’s not afraid of it.”

Indeed, his usual press entourage informally polled each other before speeches: Which comes first, a limerick or a haiku?

“This is great for Bob and great for A&M,” said Bernard Weinstein, director of the Center for Economic Development at the University of North Texas. “He’s a combination of a scholar, a thoughtful, well-spoken individual, and someone with good contacts in the business community.”

Asked whether he would now begin to write Aggie poetry, Mr. McTeer said:

“Well, I’m going to have to give that some thought.”

E-mail ashah@dallasnews.com

Reprinted with permission of The Dallas Morning News.