Let’s Do The Numbers

John Cleveland spends his days examining troves of data, which he applies to his studied economic principles to make decisions managing his family investments. He knows from firsthand experience that investments in a community and a university pay big dividends.

By David Morrison

A few days before the Federal Reserve Bank would make its long-awaited announcement that the U.S. economy had not recovered sufficiently to justify raising its interest rates, John Cleveland, a former Brenau trustee, rose up from his office desk by the collection of wide-screen computer monitors displaying charts and graphics related to stocks and bonds trading and global financial data that are integral parts of his daily life. With various levels of various governments’ involvement in economies in China, Greece, the European community and certainly the United States causing all sorts of fluctuations and trend-spotting speculation, it had to be an exciting day for him. He pulled a dog-eared, Post-it note-marked, red-covered paperback book from his shelf – The Road to Serfdom by Austrian-born free market economist Friedrich August von Hayek.

These days Hayek is a sort of patron saint for libertarian thinkers in U.S. politics, the counterpoint to the resurgence of the ideas of his contemporary and friend John Maynard Keynes, a Cambridge economist who espoused in the midst of the Great Depression that government has a duty to prop up and expand national and global economies by spending when others cannot – or will not. Hayek’s book, first published in the midst of World War II, argued that attempts for government to intervene are both ineffective and potentially dangerous. Hayek saw clear roles for government, but the danger arises in his view when government’s rules and actions do not apply equally to all and when top-down, heavy-handed governance leads to both economic inefficiency and loss of liberty.

There is no doubt on which side Cleveland stands. He is also a big fan of The Federalist Papers, the collection of essays by Alexander Hamilton, James Madison and John Jay published from 1787 to 1788 urging the ratification of the U.S. Constitution. “The Federalist Papers provides the philosophical and moral argument for how power should be distributed [in U.S. democracy],” Cleveland said. “The Hayek book, the economic counterpart, picks up where The Federalist Papers left off – with Hayek focusing on the relationship of free markets to freedom while The Federalist Papers focused more on the political science side about the requirements for a governing structure designed to protect freedom as well as the moral foundations of freedom.”

Cleveland once practiced law with the current Georgia governor, Republican Nathan Deal. When Deal was first elected to Congress – as a Democrat – Cleveland made sure the congressman got a copy of the Hayek book.

Quiet Passion

The quiet, soft-spoken Cleveland studied business at Emory University, graduating in 1971. He earned a law degree from the University of Georgia. He also took an M.B.A. from the prestigious Wharton School of Business at the University of Pennsylvania, whose graduates include, among many others, both the liberal Warren Buffett and the conservative Donald Trump. Hayek’s ideas clearly ignite Cleveland’s conservative passions. However, his is not the same combustive heat that explodes frequently in the mind-numbing, seemingly never-ending talk show and presidential stump speech rhetoric we hear today; it is a more studied, thoughtful and intellectual approach.

For example, he is well aware – and factors into his deliberativeness – that the community in which he grew up and now lives – Gainesville, Georgia – has benefited enormously from President Franklin Roosevelt’s application of Keynesian economics in its recovery from the devastating tornado of 1936, the development of a new economic base around the wartime exponential growth of the poultry industry and the peacetime development of Lake Lanier. And, although theories are great, he bolsters his studies on the subject with troves of data analysis of economic and financial trends around different milestones in history, which has led him to the conclusion that the region’s prosperity increased more with the more recent Hayekian trend toward free markets and individual freedoms in the economy.

The master teacher for him, however, came from closer to home: his father, Ralph Cleveland, who served as a Brenau trustee from 1958 until 1996 before he died in 1999. Apparently, the elder Cleveland always looked at the numbers, too. He was a successful cotton buyer at the Pacolet-Milliken Mill in New Holland, Georgia. With the fledgling poultry industry spreading its wings broadly from its roost in Hall County, Cleveland saw an opportunity. He went to Cornell University to learn the best processes and techniques for making high-food-value feed, and the mill he developed became the largest independent feed manufacturing operation in the region. That led to development of the multimillion-dollar Cleveland integrated poultry enterprise, which included everything from hatcheries to a processing plant. When the central plant burned down in 1969, Ralph Cleveland looked at the numbers again, as well as global economic and poultry industry trends, and decided not to rebuild. Instead, he applied his resources to another enterprise that was about to take off as the region caught the crest of a wave of prosperity ­– banking.

“Similar to the Internet, I think that the poultry industry development in our area is a supreme testament to the success of freedom of initiative with limited government direction,” John Cleveland said. “Foundations for it were laid even before the war. However, rather than an explosion of wartime growth, much of it occurred as veterans returned home and saw opportunity and were willing to take chances.  Dad started his milling company the year that I was born, 1949.”

Cleveland said the rapid rise of  Gainesville, “The Poultry Capital of the World,” was a direct result of risky actions taken by individuals whose names you now see on street signs in the city – not to mention on the rolls of former trustees at Brenau. People like Jesse Jewell, Joe Hatfield, Jack McKibbon and Ralph Cleveland, now hailed as visionaries, were once regarded as people with risky ideas.

“Many told my Dad that he was going to go bankrupt,” said John Cleveland, “and indeed such predictions caused most of his initial backers to back out. Most of the other pioneers faced similar uncertainty about success. This would be a great example of why Hayek said that economic freedom without central control was so valuable to society. He said that it was not because it made us feel good to have it. It was because great advances came from the fact that maybe one in a million persons would be free to try that idea which everyone else, including central planners, would think as unworkable or foolish, yet which transforms economic activity to the benefit of many. That was the essence of the development of the poultry industry in Northeast Georgia. That is the essence of the Internet today. It is the essence of the American entrepreneurial model that puts us ahead of any other nation.”

In addition to helping drive community growth with his business acumen, Ralph Cleveland, joined by his wife, Mary, also showed philanthropic and community service leadership in the community, particularly in the areas of education and health care. In addition to supporting not-for-profit, private Brenau, they also were key leaders in supporting the development of Gainesville State College in the 1960s. Mary Cleveland has been called one of the “founding mothers” of the two-year college that now has merged into the University of North Georgia. In a 2005 newspaper account, she recalled the work she and her husband had done for a historical community vote for the special educational bond on May 12, 1964, to establish a junior college in the community.

“When I heard the news that the bond had passed, I said to Ralph, ‘We won! We can have the college,'” Mary Cleveland said. “I have been for the college from the beginning, and I always will be.”

Lives of Good Work

From an office in a historic street-front building just off the Gainesville square, John Cleveland now manages finances, investments and philanthropy for one client: the Cleveland family, which comprises John, Ralph and Mary’s only child; his wife, Cathy; their two sons; and two of Ralph and Mary’s great-grandchildren.

Cleveland can now walk around the corner from his office, a quick block on the northeast side of the town square, through Roosevelt Park and into the door of the Brenau Downtown Center, which by unschooled analysis appears to be a great marriage of Keynesian and Hayekian philosophies at work. The city government-owned building houses the private university’s school for doctors in physical therapy. The lobby of that school, thanks to the largesse of John Cleveland and his family, has now been named in honor of John’s mother, Mary, and in memory of his father, Ralph.

Just before Independence Day in 2015 in the Cleveland Lobby of the physical therapy school, Brenau President Ed Schrader unveiled a plaque for the Cleveland Physical Therapy Lobby. He also presented Mary Cleveland – who had celebrated her 101st birthday about two weeks earlier – with the Mary Mildred Sullivan Award, the university’s highest non-academic honor, as a “recognition of a culmination of a life of good work, of civilized and caring service.”

It was about the only time the whole family could get together. John and Cathy’s son Scott traveled from Santa Monica, California, where he is a copywriter for the advertising agency TBWA\Chiat\Day working on campaigns for clients like Gatorade. Son Michael, who is married with two children, came in from Dallas, Texas, where he is a drama teacher at a prestigious magnet school in the Garland suburb.

“Brenau has been honored to have two generations of the Cleveland family involved in the university as trustees in Ralph and John Cleveland,” said Matt Thomas, Brenau vice president for external affairs, who oversees all fundraising activities for the university. “The support the Cleveland family has provided to both Brenau and the downtown area of Gainesville, further cemented through a gift in our Downtown Center, shows the continued dedication to making both institutions strong now and in the future.”

Schrader said the family gift to the physical therapy school was a major factor in the on-time opening of a fully equipped doctoral program that had commenced just a month earlier, with 40 students selected from a pool of 800 applicants from throughout the United States.

Lorry Schrage, a second-generation business leader whose family-owned clothing store is located on the Gainesville square, also attended the low-key ceremony. “Ralph was a very astute businessman, and what he did in this community not only allowed him and his family to make donations like this one over the years but also had a great effect on what happened in Gainesville,” said Schrage, who as a member of the Brenau Board of Trustees serves as co-chair of the ForeverGold campaign.

Schrage said that Ralph Cleveland showed his vision in starting the feed milling business that helped hatch a multibillion-dollar industry and earned the Northeast Georgia area the moniker “Poultry Capital of the World.” Cleveland’s enterprise set a splendid example as a small, entrepreneurial business that developed an innovative, less-expensive, superior product, which competed successfully with the major conglomerates like Purina and ConAgra that poured into the region.

“Without his contributions,” Schrage added, the region’s poultry industry “probably wouldn’t be what it is today.”

Aggressive Approach

In his office a few weeks after the ceremony honoring his parents, John Cleveland talked about another thing that turned him on: he has been an avid skier. He talked about a fall he took several years ago while skiing in Colorado. It was not a very dramatic fall, but he knew before he got up that something was not right. When he final did get up, he went back down, his suspicions confirmed that he had mangled the anterior cruciate ligament around one of his knees. Part of his rehabilitation that got him back on the slopes was timely, aggressive physical therapy right after his injury.

In the years since, he has had other orthopedic issues – including a back problem which he used physical therapy to avoid or delay back surgery.

“I’ve had a lot of physical therapy over the years,” he said. “I hope I don’t need it anymore, but I know what it can do.”

With the family’s contribution to Brenau, if he does need more PT help, it could be literally around the corner. In addition to projections for training scores of new physical therapy doctors, Brenau has partnered with Gainesville Physical Therapy to open in the new school near the Cleveland Lobby clinical services that will give the new doctors valuable experience working with patients in a clinical setting, as well as provide a valuable health care resource for the community.

Although he recognizes the Brenau contribution as part of the family philanthropy tradition, the economist in him did some numbers. He also views it as a sound investment in the community, particularly in the downtown Gainesville area.

“Brenau is an important asset to this community that provides a lot of benefits and resources,” he said in his office a few weeks after the ceremony. “The physical therapy program has the potential to be transformational on downtown. There will be a constant presence of people in the area. They’re young – not just traditional college-age people, but people who already are professionals in a good field. The school will generate a lot of interesting things in the area – new kinds of businesses, new stores and restaurants, more foot traffic and eventually, I think, some downtown residential facilities. The university presence also brings a diversity of population that will be good for the community. I just saw it as a very positive thing for the downtown area. It’s going to make it a much more vibrant place.”

Cleveland likes the entrepreneurial, risk-taking approach the university leadership is employing to addresses growth strategies. “With [President] Ed Schrader’s leadership, it is being appropriately aggressive and forward-thinking,” he said. “It shows a sense that you need to innovate and develop new ideas to be competitive. I think that has sort of saved the school.”

 

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