Jackie Gingrich Cushman

Dr. Carl J. Arnold taught the money and banking class at Presbyterian College when I was a student there. I can still picture him in 1986: dark, crewcut hair; pressed khaki pants; white, short-sleeved, buttoned-down shirt; dark, plastic-framed glasses; and a pocket protector. Ok, maybe he didn't wear a pocket protector. In any event, he should have worn one if he didn't.

Dr. Arnold was known for being tough. Before taking his class, I had thought that multiple-choice questions were easy -- rule out the ones that were wrong, and you were left with the correct answer. But Dr. Arnold raised multiple-choice questions to a fine art form. His answers were long and convoluted, filled with multiple qualifications and possibilities. The answer E seemed to always be "A but not B unless it is Wednesday and it rains, then it's A, B and sometimes C but never D, unless it's cloudy with a chance of rain."

I would read the question and potential answers again and again to make sure that I understood the premise. It was challenging, but I loved it. Dr. Arnold was a great teacher. Hard, but good.

Economics and money and banking were particularly interesting to me because they represented the overlap between money and people. What would drive people and business to act (microeconomics); what would economies do under different circumstances (macroeconomics); what could the Federal Reserve do; and how would it affect the economy, businesses and people (money and banking)?

Memorizing the theories and providing answers on tests was easy. You started at point A and traced the impact from point to point until you came to the company, person or part of the economy in question. It made logical sense to me.

The problem becomes more difficult when you move from theory to reality.

Basic theory assumes that one item moves at a time, and the impact cascades like a waterfall. Real life is much messier. A million things are happening at one time, and its not just policy, but what people say about the policy, write about the policy and believe about the policy that affect what people do in reaction to the policy.

Life's complicated. We've heard that before.

Let's shed a little bit of light on the Federal Reserve. After all, in a bad economy, it's all about the money.

The Federal Reserve is one of the least-understood entities in our government. A seven-member Board of Governors controls it. They are presidential appointees, confirmed by the Senate, each serving 14 years with staggered, even-year starts.

According to the Federal Reserve's "Purposes and Functions" publication, the Fed's duties include:

Jackie Gingrich Cushman

Jackie Gingrich Cushman is a speaker, syndicated columnist, socialpreneur, and author of "The Essential American: 25 Documents and Speeches Every American Should Own," and co-author of “The 5 Principles for a Successful Life: From Our Family to Yours”.