by Jeanne Allen
response to “What Is Financial Literacy?”, National Journal
April 22, 2013
I don’t remember anyone explicitly teaching me financial literacy, but ever since I was a working teenager, I’ve known how to manage my money and what it means to have debt, to pay interest, and the basics. Part of that was because my parents were small business people (I guess) but also part of it was because my peers were similarly inclined. I remember one high school math teacher talking about saving and I certainly remember when I had to get student loans and read the info that I was given. Later, I just knew I had to pay my bills.
Yet no one in high school ever really touched the subject of the economy, and the idea of capitalism was simply a footnote in the textbooks. Most people today don’t understand how business works, which is the primary reason that everyone assumes when enterprises fail it must be because of greed. There is more written about the evils of business than discussing what commerce really is, so if we’re not actually being factual and honest about how money flows and why it’s important, I’m not sure we can expect anything other than financial illiteracy. This isn’t a job, however, for a dedicated course, but should be part of the fabric of what we teach and how we teach everything from history to government to economics to basic math! Consider that even when we talk about businesses managing schools today, the entire education establishment protests, as if doing such a thing were not a natural or important part of the general fabric of our basic economic foundation.
Ironically, the same president who has been highly critical of American business and whose administration is working hard to banish for-profit education companies has declared April to be Financial Literacy Month. We should perhaps begin with first things — teaching our young people from their earliest years with content that recognizes the important of American commerce, business models, currency and how people’s monetary habits —- or dependence on it — can either aid or harm the economy.
The student loan crisis isn’t about financial illiteracy. It’s about the corresponding values we as a society place on debt, and right now, our leaders aren’t exactly role models on that score. Solve the education problem, teach students about their nation’s founding, its economic model and what we should and shouldn’t expect government to do for us, and you achieve financial literacy. And maybe you get people who start voting for people who don’t expect debt to manage the economy, too.