Credit Union Exam Solutions Presents With Flying Colors

Speaker: Hey everyone, this
is Mark Kel with another

episode of With Flying Colors.

The motivation for this podcast is a
conversation that I had back at NCA in

2008 or 2009 during the corporate Credit
Union crisis and what something was said

that always stuck with me and it was.

The concept of a billion dollars and
how much it actually was, and I've been

thinking about that a lot with things
that are in the news, whether it's

fraud with a billion dollars, or whether
it's cost overruns at the fed of the.

Of for buildings of $2.5

billion.

And then of course we have the politics
that's going on between the Trump

administration and the Federal Reserve.

Been thinking a lot about that.

I've got some visuals I've created
that I'll be putting out on

LinkedIn and linked to this podcast
and I put my thoughts together.

On the concept of this from a neutral
perspective, because I am quite neutral

on this, I can see both sides of it.

And so with that, I'm gonna
dive right into this podcast

which I've called the 2.5,

which I have am calling $2.5

billion Egos.

And why Big numbers need context, if
you've been following the headlines,

if you've been following the
headlines, you've seen the latest

clash between President Trump and
Federal Reserve Chair Jerome Powell.

This time it's over the Fed's building
renovations and the now famous $2.5

billion price tag, depending
on which side you listen to.

This is either reckless waste or
total normal construction overruns

being turned into a political weapon.

My take, it's probably a little bit
of both or a lot of bit of both,

because here's the truth, nobody
really wants to say out loud.

Big government construction projects
almost always cost more than their

plan to cost, and big political
figures almost always wanna put

their fingerprints on the blueprints.

That combination is not new, it's
not unique to the Fed, and it's

not unique to this administration.

But when the number gets to 2.5

billion, it deserves real
context, not just talking points.

So let's do the math.

Why we lose perspective on billions.

Most of us can picture a million
dollars, a billion dollars, not so much.

So here are three ways to think about $2.5

billion First.

Stacking dollar bills.

This is the reference to what
was said in the corporate crisis

back in oh eight and oh nine.

A single $1 bill is about four thousandths
of an inch thick, not thick at all.

If you stacked 2.5

billion in $1 bills, that
stack would be very high.

How high?

Actually 170 miles high.

I'm gonna repeat that.

$2.5

billion in $1 bills stacked,
assuming they wouldn't get knocked

over and assuming there was no
wind, would be 170 miles high.

That's not just above airplanes.

That is well into space.

So that's your first data point.

A tower of cash reaching into orbit.

Second housing typical.

All-in construction costs for apartments
today are roughly 300,000 to $500,000

per unit, depending on market and
building type at that range, $2.5

billion could build about 5,000 to 8,000
apartments at just two people per unit.

That's housing for
10,000 to 16,000 people.

Yes.

10,000 to 16,000 people could be
housed easily at a cost of $2.5

billion.

That's not one building that
is multiple neighborhoods.

Third, looking at time, if
you spent a thousand dollars

an hour every hour all day.

Every day it would take
about 285 years to spend $2.5

billion longer than the United
States has been a country.

So yes, we're talking
about a lot of money.

Why neither side is
shocking on this topic.

Now, I don't find it shocking that a major
renovation of historic federal buildings

costs far more than originally projected.

Anyone who's ever remodeled a
kitchen knows how that story goes.

Now, multiply that by asbestos security
requirements, historic preservation,

and federal procurement rules, costs
go up, timeline, slip, scope changes,

and that's the reference to everybody
needs to influence the blueprint.

That's part of this story, that
part of this story is not unusual.

What's also not unusual?

Political egos wanting influence
over major projects and political

opponents using big numbers as leverage.

That happens in agencies, that happens
in Congress, that happens in state

houses, and it happens in city halls.

So I'm not shocked by the construction
overruns, and I'm certainly

not shocked by the politics.

So why does the context still matter?

Here's why.

It does.

When numbers get this large, you
can't just say that's how projects go.

Because $2.5

billion is not a rounding error.

It's not just another change order.

It's a level of spending that has
real opportunity costs, even if

the spending itself is justified.

And that's where public institutions owe
the public something more than slogans.

They owe clear explanations of
scope, transparent cost, drivers,

and honest discussions of trade-offs.

Not just it's complicated.

Trust us because of this scale, trust has
to be earned with the math, even if you

are the Uber independent Federal Reserve.

So the real risk is the power struggle.

Where this gets risky is not
in the drywall or the HVAC

systems or the asbestos.

It's the power struggles When construction
spending becomes part of a broader

fight over who controls monetary policy.

Now you're mixing infrastructure
disputes with institutional independence.

That's not healthy for markets.

It's not healthy for regulators, and it's
not healthy for elected officials either.

Once both sides start framing this
as a test of authority instead of

a debate over budgets and policy,
everyone starts digging in and when

egos harden, solutions get harder.

So here's my thoughts and where I land.

I don't assume bad faith by the Fed
just because costs went up and I

don't assume bad faith by politicians
who question massive spending.

Both things can be true at the same time.

Big projects really do cost
more than planned, and $2.5

billion still deserve
serious scrutiny and $2.5

billion still deserves serious scrutiny.

What we don't need is theater.

What we do need is context, because
once we understand the scale of the

money, the conversation gets a lot more
serious and a lot less performative.

And when you're dealing with both
public trust and financial markets,

less performance and more transparency
is usually the better path.

As always, I want to
thank you for listening.

Thank you for watching.

This is Mark TriCal signing
off with flying colors.