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A report on the Economic Literacy Symposium

Seeking a Blueprint for Economic Literacy A report on the Economic Literacy Symposium held at the Federal Reserve Bank of Minneapolis on May 13-14, 1999.

June 1, 1999


A report on the Economic Literacy Symposium

The Economic Literacy Project: Seeking a Blueprint for America

The notepads tell the story: erased words, thoughts in the margins, scratched-out sentences and bullet statements that, generally speaking, try to do two things: define economic literacy and—having defined it—determine "action steps" to teach it.

In the end, the more than 60 participants to the Economic Literacy Symposium did establish a series of steps whereby each representative sector could advance the cause of economic literacy. (See list of participants.) But more on those steps later; first, some background. The Symposium was held May 13 and 14, 1999, at the Federal Reserve Bank of Minneapolis, as part of the Economic Literacy Project, a partnership of The Region magazine, the Minnesota Public Radio Civic Journalism Initiative, and Sound Money, a national radio show on personal finance.

More than just a forum for participants to share their views on economic literacy, the purpose of the Symposium was to bring together members of various groups—such as education, the media, business and labor—to develop ideas that would promote economic literacy. The event began on May 13 with a dinner and keynote speech by Alice Rivlin, vice chair of the Board of Governors of the Federal Reserve System, and was followed by a full day of "break-out" sessions, general assembly discussion, an overview by Sound Money Economics Editor Chris Farrell, and a luncheon media panel that focused attention on newspapers and their role in reporting economic news. In addition, a Women's Caucus was held the night of May 13 to discuss the relative absence of women in the field of academic economics.

Finally, the Economic Literacy Project is ongoing, with a presence on the Web that will continue to grow as new material and links become available. Also, the Symposium followed the publication of the December Region, a special issue devoted to economic literacy, which is also available on the Web. (See also MPR's Marketplace Money.)

What is economic literacy?

Symposium participants were first asked to consider that question, among others, when they gathered for their morning sessions, during which the sector groups were mixed. As some participants noted, it is perhaps telling of the complexity of the issue that defining economic literacy proved more troublesome, in some ways, than determining action steps to promote it. As some said, this illustrates that economics is a "value-laden" term for many people, and these values are not easily separated from a discussion about established principles or ideas. One person's economics is another one's manifesto. Chris Farrell recognized this in his Symposium overview, during which he described a gulf between economists and noneconomists: "Like it or not, economics has become the modern language of ethical and political discourse."

That was certainly the case during portions of the morning sessions. In one session, there was heated debate about colonialism and its continuing impact on the developing economies of the formerly occupied countries: one side arguing that trade issues are distorted by the countries' post-colonial status, another side arguing that post-colonial or not, fundamental economic principles regarding trade—like comparative advantage—still apply. This discussion was part of the group's effort to define economic literacy and caused one participant to throw up his hands and say: "If someone from outside heard our discussion, he'd say, 'What the hell are they talking about?'"

One group debated the necessity of even trying to educate the public about economic issues that affect public policy, with some participants suggesting that it didn't matter—constituencies will vote only one way and will not change their point of view based on a better understanding of the economy. Maybe that's true, others countered, but there is still merit in understanding the complexities of a given issue, because ignorance can be exploited by politicians and special interest groups. "If there's no economic literacy, then economics will become the study of the unintended consequences of public policy," one participant said.

Another group discussed the need for educating adults about economic issues, not just children, and suggested the need for some form of "lifelong learning center" on the topic. Easier said than done, said one participant: "Imagine MPR running a program on arithmetic, to people who have never learned it, and taught by people who don't know it."

Despite the debate (or, rather, because of it), by the end of the morning each cross-sector group had completed its assignment and gave a brief report before the assembly; there was some overlap in definitions and goal-setting:

  • economic literacy means that people have an understanding of economics that informs personal finance and public policy;
  • economic literacy is a two-step process that begins with personal finance and leads to broader economic issues that all of society faces;
  • economics ultimately leads to questions about what matters, it's "where the social and ethical rubber hits the road";
  • a better-informed public will allow for fewer mistakes in public policy;
  • economic literacy is not just about teaching people how to react to certain policies or ideas, but how to put them into context and evaluate them.

At the close of the group presentations, some participants rose to share further insights into the morning sessions. Prof. Michael K. Salemi of the University of North Carolina said that he was struck by what he described as the "two-edged sword" that comes with thinking like an economist; that is, people who don't understand economics the way an economist does can feel "forced out" from the discussion. There is a feeling of "I've got it and you don't" when it comes to understanding the economy, and those who "don't" are somehow marginalized. It is up to those interested in economic literacy to engage people in a dialogue that is important to them, Salemi said.

Michael James, co-director of the Center for Ethics and Economic Policy in Berkeley, Calif., said that people have to understand that thinking about economics is more than thinking about commercial activity. Economics should not be separate from other policy debates, but a part of them, because it helps people place their individual situations into a larger context.

Focus on the news

In her keynote speech that kicked off the Symposium, Federal Reserve Board Vice Chair Alice Rivlin suggested that TV viewers are given more contextual reporting about the weather than they are about business and economics news. Newspapers, on the other hand, have more time, or space, for context, but they face other issues, like inflexible editors and writers who don't understand economics, according to the three members of the post-lunch media panel, who were moderated by Farrell. John Berry of the Washington Post, James Flanigan of the Los Angeles Times and Mike Meyers of the Minneapolis Star Tribune took questions from Farrell and the audience, as well as from Dave Beal of the St. Paul Pioneer Press. (Audio transcripts from the media panel are available on the Web.)

In response to a question about the level of economic literacy, Flanigan suggested that Americans have become more cognizant of economics as they have experienced forces at work that affect their pocketbooks. He cited the oil crisis of the 1970s and the emergence—then decline—of the Japanese economy on the world stage as examples where the public, by reading and learning about those issues, have become more informed about how their economy works. "Adversity is the mother of invention," Flanigan said.

The media, including newspapers, are often criticized for making the news too simplistic, and Berry agreed that the issue was a real concern, especially when it comes to reporting on economic issues. "I confront it every day with my editors who, like everybody else, like nice, simple easy things to understand," he said. Berry cited a particular case relating to Social Security and how, if he were to tell the story simply, it would be wrong, but if he told it with all its complexity it would never make it into the paper. In the end, he said, "I am not writing that story. It is too complex to put in the newspaper. I've almost never reached that conclusion before, but in this case I have."

Meyers told stories about newspapers, and he picked on his own, that missed stories not because they didn't get the facts right, but because they didn't put the story into context, or get the additional facts that would tell the complete story. In part, he said, that's because there are all kinds of reporters—especially political reporters—writing about economics, largely because those issues cross over into so many other areas.

"I've seen lots of political reporters do an excellent job covering economics," Meyers said. "I'm not disparaging even this particular reporter. What I'm trying to say is that one of the virtues of economic education, I think, is it will make people pay attention on a daily basis to what is being written. ... We don't need to be pundits in the press; you don't have to be advocates as economists. All you have to do is give them a complete picture; they'll come to a conclusion that at least will be based on information, rather than ideology."

Where do we go from here?

The afternoon sessions brought the participants together within their own sectors, and charged them with determining actions steps that would promulgate economic literacy within their professions and among their constituents. The results of that effort are listed within; here are some comments from within the conference rooms:

  • Educator: "Social Studies teachers need to be decathletes," said Bruce Robb, Social Studies teacher for St. Paul Public Schools, describing the different classes they are expected to teach. Bonnie Meszaros of the University of Delaware agreed, saying that while a chemistry teacher would not be expected to teach biology, a political science teacher is expected to teach economics.

  • Government: Participants representing the government sector discussed how to marshal the resources available within government agencies—both human and otherwise—to get information to the public. Barry Anderson, deputy director of the Congressional Budget Office in Washington, described his office's attempt to become proactive instead of reactive when it came to dealing with members of Congress. He said that most often his staff is so busy reacting to special requests that they don't have time to make special efforts to educate Congress on other matters; also, he said that Congress is usually consumed by the issue du jour, and cannot be persuaded to spend time on other matters.

  • Media: Members of the media group discussed ways to better educate reporters, the impact of the many types of media available to the public—TV, print, radio, the Internet—and how the competitive nature of the business drives the type of reporting that is done. Bonnie London, a freelance writer from Pierre, S.D., suggested that to a certain extent, there may be varying degrees of economic literacy that can be expected from different media outlets. For example, smaller newspapers and radio and TV stations in smaller markets don't have the resources to educate their staffs, she said.

  • Business and Finance: Among other things, this group discussed how businesses can educate their own employees. Peter Bell, a Minneapolis-based consultant, said businesses should ensure that employees fully understand their investment plans; by doing so, a business will go a long way toward teaching their employees about the economy. Jim Hield, vice president of Public Affairs at Cargill, Minneapolis, described a program wherein Cargill employees were educated about the North American Free Trade Agreement through videos, postings on employee Web sites, visits to appropriate government agencies and other means.

  • Academic: High school social studies teachers need to learn economics, and some requirement for coursework in economics is necessary. William Becker, executive editor of the Journal of Economic Education, said the standard Principles course in economics needs to be re-examined, and some budgetary control needs to pass down to those people in charge of those courses.

  • Consumer and Labor: Seth Johnson, economic policy analyst for AFSCME, Washington, D.C., argued for a consistent message over time and worried that any attempt for a one-step "magic wand" will fail. Michael James said that any attempt to teach economics must be placed within the context of people's lives.

By the end of the symposium, when they gathered for their final assembly, the participants were increasingly of one mind—at least when it came to assessing the action steps to promote economic literacy. Using hand-held controls to instantly vote on the proposals of the various sectors, the assembled group rarely disagreed on the needs espoused by the sector representatives. For example, at least 80 percent of the participants think economics should be incorporated into the curriculum of K-12 schools, higher education organizations should become advocates of economic education, practical applications of economics should be emphasized, and dedicated resources should be established for economics courses.

There was some disagreement, though, with 70 percent saying that undergraduate economics courses are inadequate, 35 percent did not advocate high-stakes testing for economics (requiring a mandatory course that must be passed), and 37 percent did not think that placing economics in the "context of the learner" was a good idea. In the end, though, there was general consensus on the action steps, and plenty of ideas for the participants to "take home."

One of the issues that surfaced throughout the Symposium was whether economic literacy meant personal finance or general economics, and whether attention should be focused on either one at the exclusion of the other. In his wrap-up at the end of the day, Arthur Rolnick, senior vice president and director of Research at the Minneapolis Fed, called for an end to that debate, and suggested that personal finance and economics should be considered as part of a "continuum." Personal finance should be the "hook" that gets students to consider broader economic principles, he said. Rolnick, who is also the board chair of the Minnesota Council on Economic Education, used the example of math, which begins with simple arithmetic and builds from a growing base. The same model could be applied to the teaching of economics, he said.