- effective government. on the first point, many lessons can be drawn from the downward swing in the housing industry, ranging from those that individual consumers can learn at the micro level, to those that financial companies can learn about investment and oversight. in that regard, the federal reserve has proposed new rules to strengthen regulatory oversight and to protect consumers in the future, and we continue to assess this episode to determine what more can be done to help homebuyers and homeowners. of course, one of the most effective ways to help consumers is to empower them with information. and this gets to our first case for economic and financial literacy : improving consumers'economic decision making will enhance the effectiveness of new rules and regulations. and while we at the federal reserve are charged with regulatory duties, we certainly see the value of education and the positive impact it can have on the broader economy. while the current troubles in the housing industry stem from a number of causes, a better - informed citizenry would likely have resulted in more - prudent decision making and, consequently, less harm to the economy. in the matter of the national economy, here the call for economic education is based on the idea that a better - informed citizenry makes for better economic policymaking. this is a subtle argument, but its logic is no less clear. as my friend alan blinder, the noted princeton economist and textbook author, as well as the former vice chairman of the federal reserve's board of governors, has said, an uneducated citizenry can lead to simplistic policy solutions, and those solutions are usually suboptimal. " the fact that the basic level of economic literacy in the country, indeed in the world, is so low, " alan has said, " is one of the things that leaves the political process so vulnerable to this malady. " 1 now, even alan would admit that it's difficult to draw a direct line from economic literacy to economic policymaking, but politicians listen to their constituents at home, just as they are supposed to do. and at a time when our elected officials are confronted with a myriad of options to address a slowing economy, or when they consider the increasing fears about a globalizing economy, it's fair to ask whether they are getting good economic counsel from their constituents. this is not to say that there is only one valid answer for these complicated questions, but it does mean that we get a better answer when we are all better informed

that it not only improves the lives of individual consumers, but that it also makes for more - effective policy and a better economy. delivering on that promise is the hard part, of course, but that's where the national council comes in. we at the federal reserve are proud of our relationship with blinder, alan s, ( 1994 ), " interview with alan s. blinder, " the region, federal reserve bank of minneapolis, december, 1994. bernanke, ben ( 2006 ), " a message from chairman bernanke, " federal reserve bank of dallas, july, 2006. the national council and with other educational organizations around the country, and we look forward to continuing this important work. the task at hand is not easy, as all of you know, but the returns are high.