When my former boss retired, I gave him a book of cowboy wisdom entitled “Don't Squat With Yer Spurs On!” One piece of advice the book offers is “No matter who says what, don't believe it if it don't make sense.”
This wise admonition has steeled my resolve to keep asking questions of the economists at the Dallas Fed until I can understand what they're telling me. I want them to translate economic sense into common sense.
I have long believed that a broad public understanding of economic issues is necessary for sound economic policies. The burden of leadership is too great if we ask our leaders to adopt policies that “don't make sense” to their constituents.
A speaker at one of our conferences once said, “If all common sense were right, we wouldn't need economists.” His point was that not all of what economists know about how the economy works is intuitive.
Sometimes, it doesn't make sense without careful thought or study. That is why I believe that economic education should concentrate on that part of accepted professional wisdom that “don't make sense” and won't be believed without a special economic education effort.
Most of us are willing to admit how little we know about quantum physics or biomedical engineering. In those areas, we are willing to accept the judgment of experts.
Not so with economics. Since economics touches our daily lives, most of us regard ourselves as amateur economists and are willing to accept professional opinion only to the extent that it makes sense.
Several years ago when I took the helm of the Federal Reserve Bank of Dallas, one of my key priorities was for the Dallas Fed to become a beacon for free enterprise and to actively promote understanding on how a free enterprise market economy works. We, as Americans, should strive to understand the system that has provided us with the highest standard of living of any nation in the world.
Bob McTeer is president and CEO of the Federal Reserve Bank of Dallas.