Texas A&M University Commencement

College Station, Texas
December 17, 2004

Well . . . HOWDY!

And congratulations.

To the graduates and your long-supportive Aggie Moms and Dads—and others who’ve been pulling for you. I’m honored to be part of your day.  

Thank you for that, President Gates.  I’ve been McChancellor–as the Battalion put it–for only six weeks, but I’ve been an honorary Aggie for 38 years.  And I’ve got the t-shirt to prove it. As the bumper sticker says, “I wasn’t born in Texas, but I got here as soon as I could.” 

Many of you are starting careers, while others will go on to graduate or professional school first.  Either way, you must be anxious about your passage.  I know how you feel, having just given up 36 years of security and 14 years of CEO pampering, for a great unknown.   It’s hard to know what waits around the corner. For example, I wondered how I might make a good first impression in Aggieland by doing something really different. Like arriving in a pickup instead of a car.  Maybe even a maroon pickup.  As I said, it’s hard to see around the corner.  

There’s so much to learn . . . and my re-education is just commencing, if you will.  As is yours. Robert Earl Keen says the road goes on forever and the party never ends. But, like Robert Earl and Lyle, you’ll go down that road proudly wearing your Aggie ring.   But don’t go too far.   Even if you’re not from Texas, Texas wants you anyway.

Graduations are special everywhere, but especially here, where the traditions are so rich, so rewarding, and so long-lasting.  I first visited this campus in 1991, shortly after I came to Texas.  A member of the Corps gave me a walking tour.  He walked backwards facing me and described what I was seeing behind him.  He made all the right turns, precisely, without looking. I was so impressed that I told Alan Greenspan that, when he left the Fed, an Aggie should replace him. Because Aggies walk and talk just like the Fed makes monetary policy . . . looking backwards.”

I never learned to talk like the Chairman.  He speaks Washington, and I can’t help talking Texan. Someone captured the difference in a cartoon where the pillars of the world economy were cracking and about to fall.  Down below was a chicken with the Chairman’s head on it.  It was obviously Chicken Little.  But instead of saying “The sky is falling.   The sky is falling,” this chicken said, “The sky is measurably weakened.”

While I need your advice as much as you need mine, it’s my turn today. I’ve got lots of good advice saved up because my sons never took any of it. You are already over-achievers, so I won’t give you Ted Turner’s secret for success.  Which is . . . “Early to bed, early to rise, work like hell, and advertise.”  And, for Texas Ladies, moisturize.

I’ll just caution you not to OD on work. Imagine occasionally how you’ll feel near the end of your career rather than the beginning.  People rarely wish they’d spent more time at the office or attended more Rotary club meetings.

They do wish they’d eaten more hotdogs and ice cream at ball games and spent more time with the old folks, and the young folks.

I won’t tell you to stop and smell the roses.  That would be a cliché. But you might remember that clichés become clichés because they are usually true, and thus take your parents’ advice more seriously. For example, if you lose your sweetheart, there really are more fish in the sea. When you have bad luck or good luck in your career, just remember: it’s hard to know which is which.

So don’t get too high on your successes or too low on your setbacks. Kipling calls your triumphs and disasters imposters, and suggests you treat them the same. Waylon Jennings thought he’d lost the coin toss that kept him off Buddy Holly’s airplane—the night the music stopped.  Richie Valens and the Big Bopper thought they’d won.  “That’ll Be the Day” came way too soon, but by age 23 Buddy had revolutionized rock and roll. He focused.

I put my picture at Buddy Holly’s grave in the Dallas Fed’s annual report along side my picture at Adam Smith’s grave.  When Alan Greenspan asked me about it, I told him that the father of rock and roll and the father of economics had a lot in common. I suggested we collaborate on an article about them.  He declined, saying that his taste in music was similar to Adam Smith’s, i.e. he preferred  J. S. Bach. I told him I’d heard of old J. S., but I thought Buddy had had more hits. I never heard back from him on that.

Let me conclude on a more serious note.

You are graduating into a much better economy than you probably realize by watching TV in a political season.  Just by being part of the U.S. economy, you’ll be more productive and thus have a higher standard of living than you would with the same skills in any other country.  I used to be called a cheerleader for the new and improved U.S. economy. I guess I’ll have to change that to yell leader. Either way, the new economy of the late 90s featured faster output and employment growth and lower inflation and unemployment, primarily because of the impact of information and communication technology on productivity growth.

Productivity growth, or the growth in output per hour worked, doubled in the late 1990s from the previous two decades.  The best-kept secret of recent years is that productivity has continued to grow that fast or even faster.  And now include the service sectors as well as manufacturing.

This good news on productivity growth has been obscured by its unfortunate side effect on employment growth.  Businesses have been producing more and more with fewer workers.  Ultimately, the factory of the future may have just two employees: a man and a dog.   The man to feed the dog.  The dog to keep the man from touching the computer.

We’re conditioned to look at the down side of producing more with less work. But that’s how our living standards rise. Because of productivity gains in agriculture, two percent of our citizens produce more food than 80 percent once did.  The same trend has existed in manufacturing for decades—more production with fewer workers.

So far, the dynamic U.S. economy has recycled displaced workers into new higher value-added jobs—or puts their sons and daughters into them. But as the job churn speeds up and includes service sector jobs as well, we worry that we won’t be able to keep up.

Whether we can or not really is a matter of education and training. You shouldn’t think of your education begun at Texas A&M as a job training program. It is that, but it’s much, much more.  It’s a living-training program. We can’t afford to lose our nerve and give in to pleas for protection of the old jobs and the old ways.  If we had done that a few years ago, half our population would now be telephone operators.  Or maybe elevator operators.  That might be okay for them, but who would make our computers, software and cell phones?

You are lucky to be graduating into the dynamic U.S. economy.  You are doubly lucky if you are going into the vibrant Texas economy. We have less ice and snow and better air conditioning than most places. Thankfully, our government is somewhat more limited and less intrusive than most.  Which gives us more freedom.

We’ve recently begun dealing with a former problem area: tort reform. Our favorable business climate attracts employers and employees from around the world.  We were an emerging high-tech leader before overinvestment set us back temporarily.  But we’ll be back.   Moore’s Law has not been repealed. We are still doubling processing power every 18 months.The high-tech recipe books are waiting on the shelf–waiting for the business models to catch up to the technology.  And they are.

We are also poised to be a leader in biotechnology, which holds even more promise than electronic technology because it affects our lives and health.

Texas A&M is in the thick of genetic research that promises to revolutionize our approach to human health and extend the length and quality of human life. I’m reminded of Eubie Blake, who reportedly said if he’d known he was going to live so long he would have taken better care of himself.

Just this week, Governor Perry proposed an exciting new initiative, the Texas Emerging Technology Fund to help keep Texas businesses and universities on the cutting edge of these exciting new frontiers. A&M is well-positioned to take advantage of that. And if I know President Gates, A&M will be on the leading edge of the cutting edge. I think that’s sometimes called the bleeding edge, but we’ll be careful.

Learning is speeding up and knowledge is compounding at a higher and higher rate. Many of you graduates will be here in a couple or three decades astonished at the progress since today and the promise of more to come. And like your parents today, you’ll be feeling pride down to your toes.

Until then, so long.  Good luck.  Gig ’em. See you at the Cotton Bowl.

About the Author

McTeer is chancellor of The Texas A&M University System and former president and CEO of the Federal Reserve Bank of Dallas.