BRONXVILLE, N.Y., Aug. 7. — There is no question as to whether the American people can avoid inflation and achieve reasonably stable economic growth. The only question is whether they will be well enough informed to support the measures that will be required to achieve these objectives, Dr. E. Sherman Adams, of the American Bankers Association, told an audience of secondary school teachers here today.
Dr. Adams, deputy manager in charge of the ABA Department of Monetary Policy and Economic Policy Commission and director of the Graduate School of Banking, spoke at a national workshop on economics for science and social studies teachers being held on the campus of Sarah Lawrence College, under the sponsorship of the Joint Council on Economic Education, the National Science Teachers Association, and the National Council for Social Studies. Thirty school systems, representative of the nation, have sent teams of teachers to the workshop.
"What is needed," Dr. Adams told the teachers, "is nothing less than a continuing, all-out crusade against economic illiteracy. I suggest that we dedicate ourselves to that crusade here and how."
Dr. Adams emphasized the problem of achieving reasonable stability for the American economy is by no means insoluble, but he pointed out that a working knowledge of the fundamentals of economics, monetary policy, and fiscal policy on the part of the people is essential in reaching a solution.
"As a nation, the stability of our economy is one of the chief determinants not only of our defense potential and of our standard of living but also of our entire social environment," he declared. "For teachers and educators, this problem has peculiar significance.
"Economic education is essential to economic stability. Today, more than ever before, it is the voter — and average Joe and Josephine — who is the ultimate decision-maker in the realm of public economic policy. Sound measures to strengthen our economy and combat instability cannot be adopted and adhered to without the understanding and the sustained support of the citizenry. Here, clearly, is a major responsibility, for teachers and educators everywhere to contribute to the stability of the American economy by improving the economic literacy of the American people."
Noting the problem of instability is two-fold — one of preventing depressions, the other of preventing inflation — Dr. Adams examined some of the sources of instability.
"The age-old problem of the business cycle is still with us today," he said, "but in recent years something new has been added — the problem of preventing a continuing erosion of the value of the dollar over the years. Even if the business cycle were to disappear, we still would be faced with this threat of inflation. In addition to cycle control, therefore, we must now be concerned with erosion control as well."
The ABA economist observed there is a wide knowledge of information on the business cycle, and that there is a substantial amount of agreement with respect to the basic causes of cyclical swings and factors that aggravate them. It is a complex subject, he said, but one on which every citizen should be informed.
But, he added, the problem of continuing inflation, of inflationary biases now prevalent in the economy, is not discussed very thoroughly in most textbooks.
"These biases contribute to pushing prices up during good times and to preventing prices from ever readjusting downward. Price increases have tended to become irreversible," he said.
Outlines Inflation Biases
Dr. Adams cited the inflation biases as:
