Don Drummond has never met a podium he didn't like. Fortunately, business audiences are always keen to listen to the outspoken Toronto-Dominion Bank chief economist and former federal Department of Finance bigwig. So are politicians and CEOs seeking one-on-one advice. The bank hired Drummond in 2000, and put him in charge of government relations as well in 2001, when lobbying rules allowed him to approach former colleagues in Ottawa. But Drummond, 56, plans to retire this summer, and the two jobs will be split. Working both the pulpit and the corridors of power has left him in need of a rest.
Why not stick around longer? I really do like the job, but the one part that got a bit excessive was the incessant travel. I went out to Vancouver three weeks ago for 48 hours, and I did nine client events, three TV interviews and a phone-in radio interview. I had no idea where I was. It wouldn't have made a difference if it were Calgary or Halifax. That's my fault, I shouldn't have booked that much.
What's the best career advice you received? Do what you like to do. I've encountered an awful lot of people who are obsessive about their career path, and when they should be promoted. Maybe I was lucky, but I've never applied for a job, or asked for a promotion or a raise, yet everything I could have wanted was given to me. If I had a strategy, it was basically to just keep my head down, work hard and have fun doing it.
What's your biggest accomplishment? I am so grateful that I didn't miss the second half of the 1990s in the Finance Department. My colleagues and I should wear a collective amount of guilt, because we presided over the ruin of the nation's fiscal position before that, and not many of us had the opportunity to clean up our mess. The 2000 budget was the highlight, because that was the beginning of the substantial payback, and when we started to reduce the tax burden. In particular, it started the ball rolling on the corporate income tax, which turned into an outright revolution.
Any unfulfilled ambitions? No, I don't think so. I'm feeling in this job almost the way I did from having had to clean up the fiscal mess. I wouldn't have missed the most recent recession for the world. I joke about it: You go into a wealth management meeting and the clients have lost 50% of their wealth, yet you're as happy as you can be. And why not? This has been an absolutely phenomenal period both for an economist and for anyone interested in public policy. Economics textbooks in 2050 will have several chapters devoted to it. People are going to study it as intensely as the Great Depression.
Economics has come under criticism during the crisis. Do you see it changing? It will have to. If you look at the mathematical models we use, we don't have the proper financial linkages. We don't adequately represent the credit flows, and the models don't capture what happened in U.S. financial markets. The world is a very complicated place, and human behaviour came into play. I was shocked at how strong U.S. consumer spending remained, but I don't know how you model that, because it was illogical. Economics assumes that people behave in a rational, logical fashion.
Is it getting hard to forecast anything? We consistently underestimated the momentum in the economy. I felt bad, because we do the volume forecasts for the bank-"Here's what's going to happen to your mortgage volumes and your deposits." The only thing I can say is that, given the risk aversion of this bank, if you're going to make an error, at least we underestimated the strength. If we had consistently overestimated it, there would probably be some empty offices around here now.
Is there anything that the private sector should learn from the federal bureaucracy? One surprise is that the Department of Finance is much less hierarchical than a bank. And TD is probably less hierarchical than other banks. In Finance, even as a relatively junior economist, if you have a file, you wield enormous influence. You get to brief the minister and draft legislation. We're in a knowledge-based era, and any organization needs to exploit people's creativity. If your company wants to, say, cut $50 million from back-office expenses, your best ideas will probably come from people who do the back-office stuff.