Schools Attempt to Teach Financial Literacy for All the Wrong Reasons



so Rachel in the last segment you were telling us about the the growth of the financial literacy market industry I guess if you will one of the things that strikes me about this and and and I should also add that you you let us know that the data shows that financial education doesn't really seem to work but there's a whole group of people out there who continue to push it let's talk about why people might be pushing the notion of financial literacy so hard obviously look I don't think it's a bad idea for people to learn about everything frankly but problem is this trying to solve so that we can get it though maybe the heart of as to why some people are so adamant about solving this problem through the I guess the demand side as opposed to the supply side of the financial business ya know it's the most important question I mean I think it's obviously a very American ideal we believe we can teach people and education is a is an important sort of mechanism to better our lives and so people say well there are all these problems so let's teach our way out of it let's impart students and people with the skills so that they don't have problems anymore and I and I agree with you I don't think there's anything like inherently wrong with teaching and certain concepts in schools the problem is that it's grown to this point where people say you know and you have you have state legislators and federal lawmakers and state treasurer saying we're going to teach kids so then when they go out into the world they're not going to make the wrong choices and the problem with that is it completely up ends what's going on is it says if people are you know buying predatory loan mortgages and being sold you know voracious loans because they're just you know uneducated and too stupid as opposed to you know being manipulated and defrauded and and so I think like the the leaders of the financial literacy movement are very explosive they're not just trying to teach things they want to teach it to meaningfully change behavior and you know help people lead more financially secure lives which sounds good it's just that there's not a lot of evidence that the way to help people lead financially secure lives is giving them a class in 11th grade on you know credit cards and and we may see much more effective ways through other things that could be more politically difficult than passing a state mandate for a required course in k-12 and before we get to those other things because I have to say that you know the more that we talk about this it sounds like what we're doing is providing teenagers with these shields that they need for this onslaught that's coming towards them and obviously what we're not doing is saying hey wait a second we have the ability to impact the onslaught side of this equation – right so before we get to that who are the people that are like behind this push like the your article talks about how many different outfits are providing free courses like they must be getting something in return in some way let's talk about who these people are and what are they getting in return or what are they for stalling yes I mean so there are a lot of people who are interested in this obviously I mean there are people who are interested in because they truly want to help others and they think education will help and they're not convinced that the research you know contradicts their goals in any way you know if my sister is a econ PhD season and I told her I was working in the store and she was like oh I love that I support that so much and I was a girl then he's noted you know draw you back a little bit like a lot of people are just generally enthusiastic about it because it sounds like it should work one of the people I interviewed for my story who is a critical Anil and is a journalist she said you know when he started critiquing some of the research you know she was like everyone made me feel like I was you know hating on apple pie that's the sort of reaction so there are some people like that you know there's a lot of bipartisan support Democrats and Republicans both you know like how it sounds but my piece also looked really closely at the fact that some of the most active backers of this movement come from the financial industry itself Thanks insurance companies credit unions credit card companies all of these institutions are seeing a lot of opportunity and you know if you talk to them they'll say well yes we just want to help we we think education is good we want to help consumers etc and but at the same time those same groups are often lobbying against regulation over their industries and and so that's something I looked at this in the piece and in terms of what might be in it for them you know there's a lot of advantages to to a bank from a banks perspective if they sponsor if they sponsor curriculum about how to you know buy you know budget safely or or or use credit responsibly they get you know credit they get sort of the good PR that comes with sort of doing something for the community they get to put their brand name inside classrooms for teachers for students for their parents there's great marketing opportunities that come with that and a lot of cash-strapped school districts don't necessarily have the money to afford fancy technology and so banks are like oh well we'll do it and then we'll actually that's also a nice way to get in to your classrooms not all not all not all curriculums are sponsored by banks and there are there are foundations and other groups but one of the things I also looked at is that there are just so many different curriculum providers no one knows who is using what no one really knows which is best nobody's studying which is best so it's just a sort of like explosion of options that is growing bigger every year and it's pretty overwhelming so there's two things that occur to me Rachael as you tell me this one is that these corporations see this as a good bulwark against regulation right if they can frame the conversation like you say about the problem being the failure of the individual to be able to assess when they're getting ripped off or not essentially if that's the problem as opposed to the fact that we have an entire industry that in many respects as a business model is designed around the idea that we're going to rip people off or at the very least we're going to play on their ignorance about these issues that's one thing that they get to frame the argument and they get to forestall a certain amount of regulation but as you're telling me this the other thing that occurs to me is like this sounds like camel Joe right like Bank of America gets to put their financial literacy stuff in the in the classroom when you're a teenager you grow up as an adult you're like Bank of America I can trust them you know they were helping me as I was a kid I mean is there been any research as to like you know does this end up actually hurting people I mean I don't know if there's been research specifically on the that aspect but there has been note there has been real like you know a lot of psychological research on that on that exact phenomenon of like brands that people grow up with our brands that people then trust for life so yeah I think I think it absolutely is a valid concern that you know if you have visa or you know Bank of America in your classroom you know as your third grader you're gonna grow up and say you know they're out for me they're like US Disney you know a brand that I've known since I was a kid for sure well I gotta say that you quote sherrod Brown in your piece I guess during maybe what was a Banking Committee hearing and his point is well-taken I'm paraphrasing here as he basically asked these executives you know would we would we ask when we train people to become you know medical uh medically savvy when they're looking at assessing whether they should get surgery would we we train people to be able to fix their engine when they're looking to buy a car I mean we have a problem where in this country the car salesmen the surgeons are basically selling Americans products that they don't need that are destructive to them and instead of asking Americans to learn how to assess that we should step in with professionals and regulate these people Rachel an amazing piece I hope people check it out thanks so much for your time today

27 thoughts on “Schools Attempt to Teach Financial Literacy for All the Wrong Reasons”

  1. "Don't worry rape victims, all you need is to be taught how to avoid rape." These financial literacy people are delusional.

  2. I think she might be a little short sighted in thinking. Financial literacy is an important thing for kids to learn. Like it or not you have to partake in the financial world, and you have to know how to navigate it if you don't want to outright fail.

  3. “Journalists “ love the idea of regulation for other industries but somehow they are exempt.

    Weird

  4. Here's the plan: "Everyone who's been to highshool has had the opportunity to learn financial literacy. Therefore, if loads of these people get fucked up with debts anyway, it's their own damn fault – so it's unfair to regulate the financial industry. After all, they've done their bit, sponsoring the education program." Am I too cynical?

  5. It's such a minuscule amount of curriculum and is a good thing to learn but even the kids understand afterward that they are SCREWED as adults. Most of my students will say that they will never get married or go to college. It's fun to learn but circumstances make the difference. My father died when I was in college and I knew I didn't want credit cards but had no choice in order to survive.

  6. While learning basic financial literacy is a good thing, the increasing likelihood to find stable entry-level work combined with the rapid erosion of worker's rights will make this policy ineffective for the most part the further down the socioeconomic ladder you go. Seder is right: you're better off going after the predatory financial sector by implementing regulation that offers strong consumer protections.

    Also, this got the approval from the financial sector in part because the math that screws over the most people isn't going to be basic accounting, but the math that siphoned as much money in as little time as possible from the middle class, which led to The Great Recession back in '08.

  7. Do both. Teach financial literacy, and keep people from fraudulent business practices. It's not rocket surgery.

  8. We need the Post Office to do banking again. It is the only institution guaranteed in the Constitution. Those bankrupt bankster whores want to teach Main Street about fiscal prudence? They fucked us in 2008. It is time to let unfeasible banks to be liquidated. The banksters eat the debt the state gets their assets. They do this to small banks all the time.

  9. I wish I had some financial education I wonder if i would of struggled as much when I first went out in the world.

  10. People's ignorance on financial matters cause problems later in life. Try to teach people so they're not financial ignorant is also harmful.
    Did anyone else noticed for all this person's rhetoric their team ignorance.

  11. It's shocking that this guest has kind of a take-it-or-leave-it attitude towards financial education in our high schools. We teach our kids everything BUT how to run their finances when they get out in the real world. Sam has the same attitude…what's the big deal when we can instead fix all our financial problems with legislation, which would make education less imperative. No reason why we can't do both.

  12. I personally am looking forward to low consumption lifestyles fused with a post credit economic environment.

  13. With public/private pensions dealing with potential haircuts in the future, Social Security and Medicare facing issues of solvency in the future, and with consumption incentivized more than savings, financial literacy is MORE important than ever. It's shocking we don't teach our kids this in high school.

  14. This video is really confusing.
    Peolpe get screwed partly because the lack of knowledge and partly the banks sale them on loans they don't need.
    We know that most people are keeping up with the Jones's.
    I don't have any debts because I went and read books and watch videos about financial literacy, and it did improved my life. Now, I have enough money to donate to Bernie Sanders and Andrew Yang xD
    I don't see anything wrong with this, but the banks being involved. Let's take them out of it and keep teaching.

  15. When are we gonna say enough is enough and end capitalism and promote workers controlling the means of production socialism?

  16. If you taught people about how money is created and they understood the psychological and physical impacts of a system based on self interest, differential advantage, social stratification and scarcity, there probably wouldn't be a thing called money. It's a religion.

  17. I would argue the problem isn't the Financial Literacy class itself, so much as it is like she said: an mandatory part of curriculum. We need to show students why they should care, why they should participate, why they should take their education seriously. It's multi-faceted. Schools need help sorting these problems out and they're not getting any. You could add a specific class that could teach them every lesson they need as adults, but it wouldn't matter if it isn't taken seriously. We need parents to help, the Federal Govt needs to help the schools thus promoting the parents to care. Throwing financial security into a 16 year old's curriculum on top of other classes they think are useless isn't going to do much. Needs to be reformed.

  18. Teaching kids about white privilege, toxic masculinity, and gender fluidity? No prob. Teaching kids about how to be financially responsible? Get the f*ck outta here!

  19. They really should be teaching civics at an early age. Im teaching my son how a healthy government works and how to participate. The problem is the politicians no longer work for us and its only going to get worse as corporations and the elites consolidate even more power. Just look st the fact the kochs have so much influence. This is why im teaching him early about what it will take to fix this.

  20. We are all just wage slaves. We have to go into debt to the same robber barons that we work for. Many of us will never be out of debt for our whole life. Is it like this in every other western country?

  21. Too much emphasis on money and not on character, it was the cheating financial institutions that put America through the last recession…..

  22. 12 year olds about mutual funds? When I was 12 I was drawing dragons and ninjas. These people have no idea what children will care about. As if a 12 year old is going to retain any education they receive on that in a useful way. Maybe when they are 15.

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