that we should provide greater insulation or protection from competition for selective parts of the u. s. economy. moving in this direction would, i believe, be a fundamental mistake. more than ever before our fortunes are linked to those of the global economy. if anything, we need to become more open, not less ; more open to trade in goods and services, but also to investment, to people and to ideas. global integration is not the solution to all our problems, but acting to restrict it or to insulate us from its consequences would damage our capacity to grow and to adapt to change, and these costs would make it harder, not easier, to deal with our longer - term challenges. to the extent we are reluctant to remove restrictions or subsidies in the united states, we make it easier for the forces in other countries to block reforms from which we would benefit. the world has a lot of experience with the costs and benefits of protection, and the balance of judgment on those questions has not significantly changed even with all the changes that technology and policy have brought to global trade. economies that are more open have generally seen more rapid growth, both in incomes and in employment. economies that are less open have generally grown less rapidly. openness itself, of course, is not enough. our capacity to adapt to change depends in part on the effectiveness of government policy in a range of important areas. education seems the most obvious of these, but policy in health care, in public infrastructure, and many other areas will also play an increasingly important role in determining the relative strength of the u. s. economy in this more integrated world. the u. s. educational system combines the strengths of high completion rates for secondary education, a rich variety of post - secondary school educational options, and exceptionally strong elite universities, with the weaknesses of substantial unevenness in the quality of public education, and large disparities in the educational opportunities available to those of modest income and the relatively rich. by some estimates, students from families in the bottom half of the income distribution account for only 10 percent of all places in our elite universities. an education system should be judged by how it serves the majority of the population, not just the performance of its best institutions. and as technological progress continues and global integration increases, our system will be judged by how good a job it does equipping a broader range of students with the skills commensurate with these challenges. in communities across the country, there are encouraging efforts at

of education is vital to improving the capacity of our citizens to manage the challenges that come from global competition, rapid technological change, and the greater share of the risk they now bear for saving for retirement. the average american with a college degree earns twice as much as his neighbor without a college education, which is about twice the premium that existed 40 years ago. improving access to educational opportunity for all our citizens, regardless of race or the economic fortune of their parents, is critical to the credibility of the american ideal of equality of economic opportunity. as larry summers has noted, in our country today, a student whose parents are among the richest quartile of american is six times more likely than one from the poorest quartile to graduate with a b. a. within five years of leaving high school. and improving the capacity of our present and future tax payers to make informed judgments about economic policy is important to improving the quality of policy decisions by our elected officials, national and locally. this is vital in an era where we face tremendous challenges in bringing our commitments and resources closer to balance. improving educational achievement, access to educational opportunity, and the level of public sophistication on economic issues are critical challenges with high returns to progress. this is why we will continue to invest in educational programs and why we are pleased to work closely with organizations as effective as the naf in this noble cause. 1 / 2 i take some comfort in the fact that, when naf students think of the federal reserve bank of new york, they know we have an important role in monetary policy and financial stability. they know we sit on a large amount of the gold and dollar reserves of the world. but what they think is really cool is the fed challenge, and how they can win a place in the national competition. my wife said to me this morning that the fed challenge sounds considerably more fun and exciting than the real thing. i applaud all of you who contribute to this effort. and i thank the naf for its tribute to the new york fed. 2 / 2