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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy 'financial literacy' is a bunch of hooey – and why the banks promote it
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Oh, and another thing none of these outfits thinks it worth mentioning financial literacy, even at the most basic level, doesn't work.
Survey after survey shows that high-school students who take mandated seminars in financial literacy know no more about basic financial concepts than students who didn't study the concept at all. As a recent study on the topic put it, these classes have "no impact on credit management outcomes, including: credit scores, credit card delinquencies, or the probability of declaring bankruptcy or experiencing foreclosure."
http://www.guardian.co.uk/money/us-money-blog/2013/apr/16/personal-financial-literacy-capability
Egalitarian Thug
(12,448 posts)These parasites truly are the greatest source of evil on earth.
& R
unrepentant progress
(611 posts)Instead they were just propaganda for supply side economics?
Egalitarian Thug
(12,448 posts)"American Dream" fantasies, vague implications and outright lies that will somehow cause your own dreams to materialize.
It's been 30 years and you can still find idiots and con-men talking about Laffer curves and the Chicago School as if the intervening decades of failure and economic disasters didn't exist. You've got the whole "investment" sales industry sucking billions of dollars out of sucker's pockets, from Tony Robbins to Suze Orman and at least two dedicated cable stations pushing the fantasy.
HughBeaumont
(24,461 posts)The Personal Finance Industry is a victim-blaming SCAM designed to cover their own asses, sell their crappy products, and in turn, distract from their crimes.
Clean your OWN houses before lecturing and blaming US, piglets. We cannot save/invest what you continually STEAL from us via real-dollar wage stagnation versus a never-decreasing cost of living. Investment requires disposable income, something the wealthy have and we do not. All the "literacy" in the world can't extract blood from an overworked and underpaid stone.
el_bryanto
(11,804 posts)I agree that the financial meltdown wasn't caused by individual home owners / mortgage holders. And the sight of people who created this mess lecturing the working class and middle class is a bit nauseating.
That said, I think people should know a bit more and make better decisions. While some people were scammed into buying houses they couldn't afford, some people could have avoided those situations if they had been a bit more careful or knowledgeable about what their options were. It's dispiriting to think that financial literacy has no effect on the decisions people make.
Bryant
Phentex
(16,334 posts)I am also shocked by how many people *I* know who live in the dark about the terms of their financial situation. No budgeting. No idea what interest rates they pay. Haven't set up online access to SEE their information.
I absolutely am not blaming individuals for this mess. But I do wish more people would ask questions about the terms and the ramifications.
nessa
(317 posts)How to budget, how to avoid credit. If you have a bank account how to choose a good one. If you MUST have a credit card or other loan, how to choose the best one and fully understand the consequences.
Teach them how to limit their student loans by making use of community colleges for as many courses as will transfer.
Most importantly understanding your rights and feeling confident to stand up to financial institutions. How to use the necessary services without buying their products.
Teaching people to protect their finances is not hooey.
nessa
(317 posts)It is about how to prepare a budget, how to not fall into instant gratification, save up for a beater car rather than take a loan on a new one.
They are taught how to balance an account to make sure a bank isn't ripping them off. How to choose a checking account that's suitable.
They are taught to avoid credit altogether. The biggest scam, financial institutions have going. How is teaching someone how to avoid the shenanigans blaming the victim? If you teach someone how to secure their home and avoid break in, is that blaming the victims of previous break ins.
It also teaches them about the credit card law from 2009 and what their rights are if they have a dispute with a financial institution
HughBeaumont
(24,461 posts)THAT'S her point. Many Americans don't even have disposable income required to be financially literate.
We're not getting killed on lattes, appliances and other assorted tchotchkes; we're getting killed on necessities. Education, housing, health care, transportation, insurance, groceries, etc. All of these things have gone up in cost and our wages have not met these cost increases in 33 years. This is a fact that's beyond dispute and it IS victim-blaming to gloss over this very real problem and simply accuse Americans of not being able to save or budget because they have no "financial literacy". When your poor or required to spend every penny you make, "budgeting" is not really going to solve that greater problem; it's just putting a band-aid on an open wound.
On this topic a bit back, one DUer dumbfoundingly, and with all seriousness, suggested "dumpster diving".
One financial landmine (let alone several) can set you back weeks, months, even years. Undeserved setbacks are more costly than ever. But it's our fault we're in the mess we're in? Corporate America's completely innocent?
Oh, and try securing a large loan (auto or mortgage) with a weak or no credit score. Short of having tons of liquid cash at your disposal (in which case you're already rich and wouldn't need a loan), any reputable financial institution would laugh you out of the place. Notice I said reputable.
nessa
(317 posts)Don't you think that kids should be taught ways to avoid financial landmines, before they are caught in the bind.
What sounds like a common sense platitude to you, is not necessarily common sense or common knowledge to a teenager.
People who are just becoming adults and only have to take care of themselves can be taught the most efficient way to do that. Primarily by staying away from debt. This not a bank sponsored teaching. The banks want kids to think debt is no big deal.
Corporate America selling crap to kids is like a drug dealer selling drugs to kids.
Weak or no credit won't get you a mortgage but it will get a credit card with usurious interest rates. It will get you "$5000 in your bank account tomorrow! (sure the money's expensive but...)". It will get you "you can have this computer, flat screen TV and washing machine delivered to your home for the low cost of $100 a week!". Kids need to be taught the true cost of this stuff and they need to be taught to avoid it.
No one is saying Corporate America is innocent. Just the opposite, it's about teaching kids just how dangerous they are.
You can go to college without going into debt, if you are willing to take it slow. If you're willing to live at home, work full time and take classes part time. Banks don't want people to know that. Big universities don't want kids to know that.
still_one
(92,116 posts)heads on cnbs, to a lesser extent Bloomberg, and other so called business outlets, are mostly hooey. Even reading WSJ rumors/stories ares just someone pushing something. However, financial literacy is not in my view that. It is understanding how to diversify and save so for the long term.
People saving for retirement in this country is pathetic.
For instance if people are looking for a very little risk place to save their money, they could put some of that saving into I-Bonds. It is directly through treasury direct, and is currently paying 1.79% interest rate through April. No, it is a lot of interest, but compared to a savings account or treasuries, it is far superior. In addition, if the inflation rate goes up, that interest rate will go up.
A diversified saving strategy that includes blue chips, fixed income, cash, and real estate is important, and for people not to rely on a "talking" head that is pushing his companies nonsense, but think long term.
Egalitarian Thug
(12,448 posts)less a confidence scheme. The fact that you have (apparently) internalized the "requirement" of saving for retirement just shows how effective the scam really is.
Humans are social creatures, uniquely ill-suited to individual survival. We create community in order to survive and that community must be a pact in both directions, or it falls apart and everybody loses.
unrepentant progress
(611 posts)AnotherMcIntosh
(11,064 posts)is at work. Sometimes more than one.
http://pickpocket.blog.ca/2011/06/27/three-card-monte-11384930/
Egalitarian Thug
(12,448 posts)el_bryanto
(11,804 posts)The financial system has some enormous ethical and moral problems, and needs some serious reform. That said, we as individuals need to do the best we can to support ourselves and contribute to the system.
Bryant
Egalitarian Thug
(12,448 posts)The banking and financial system has become purely extractive and usurious. and now it has destroyed this nation and brought down the global economy.
Please explain.
el_bryanto
(11,804 posts)Destroyed the nation might be a bit much don't you think? I mean yes, they caused some bad times, and they should be seriously reformed. But I don't think the nation is actually destroyed.
Secondly - Individuals need to take as much responsibility as they can for their lives. That means trying to stay employed, paying your bills, taking care of your responsibilities and if possible giving something back to society. Obviously there are financial setbacks that can happen to anybody, that aren't anybodies fault. But there are also self-created emergencies.
Bryant
HughBeaumont
(24,461 posts). . . see how much of it directly or indirectly relates to
* Bailing out Capitalism when it crashes
* Bailing out corporations
* The MIC and its wars of folly
* Sending a lifeyacht to the wealthy in the form of tax breaks, who toss a relative chip of wood back.
Ask yourself if we're realistically going to be able pay it back without a serious influx of revenue from the top of the heap.
If "Destroyed" seems harsh, I think "Long-term Crippled" isn't too far off.
el_bryanto
(11,804 posts)Obviously we have large debt due to bad decisions made - but we are plotting austerity measures which are going to make things worse rather than better.
Bryant
Egalitarian Thug
(12,448 posts)is the common player in all of the factors that have destroyed a way of life. If you never lived in pre-reagan America it is hard to understand just how shitty life here has become since then, but one can look at the steady and increasing drain this particular sector has prompted going back well into the 19th century. It is really difficult, if not impossible, to conceive of how much better things would be without this constant drain. The last few decades have only been another shearing in an ongoing cycle driven by this entity.
As for individuals taking responsibility for their lives, what does that even mean? Who is it that you imagine is not taking responsibility and what do you propose we do about it? We have a rigged game that all are forced to play and typically "taking responsibility" is simply code for those that lose the game. Am I misunderstanding what you're writing?
el_bryanto
(11,804 posts)we find ourselves in America. People aren't just helpless victims. They can choose to do things that ameliorate their situation - and they should and they should be encouraged to do so. That's not to blame them or attack them. It's just saying that all things being equal you should try and work at the best job you can get, set a little money aside, don't take risks with your money, live within your means. All that kind of obvious stuff.
As for the first part of your e-mail I don't know how I can say this any clearer - I am a capitalist, but I favor a well regulated capitalism particularly when you are talking about the Money Grid that banks and investment houses provide - that needs to be much more strongly regulated than it is now and protections need to be put in place to protect against predatory banking practices.
Bryant
Egalitarian Thug
(12,448 posts)personal/internal definition, but that statement alone does not define what that may be. Capitalism as Adam Smith conceived it, couldn't be much further away from what is practiced in America today, and bare capitalism is nothing more than a system for a more efficient creation and circulation of currency. All of the rest of the dreck that has been dumped around and on it constitutes nothing but rationalizations for anti-social behavior.
The point of my initial reply, and I believe the OP, is that many people are in fact helpless victims. I can give you hundreds of examples of how this system has victimized millions of people here in America alone that did nothing wrong, that did as they were told, followed the rules and are ruined. You still haven't answered the question in the previous reply. What do you propose we, society, do for them?
Perhaps what you don't get is that when the system works exactly as it is supposed to, it fails an unacceptably high percentage of its participants, leaving them with nothing to show for a lifetime, and that brings us back to the social contract. Unless you are advocating some Dickensian nightmare (something we are getting closer to every day) of the young, the old, the sick, and those that simply are not equipped to participate begging and dying in the streets, we need a much better system. The one we have extravagantly rewards the worst of human behavior and works primarily for the owners of that system, not for the society that allows it to exist.
petronius
(26,602 posts)from some sort of financial firm in Economics class - I specifically remember that one of his key points was how rational and correct it is for young people to spend above their means, because later on in life they'll make more money and it will even out. Fortunately I developed a more nuanced view before I ever got a credit card...
YoungDemCA
(5,714 posts)Corporations are sitting on trillions of dollars of cash, much of it stowed away in offshore tax-free accounts, and many of the wealthiest individuals in America pay a pittance, relatively speaking, in taxes. Meanwhile, Wall Street continues to post record profits.
Yet wages continue to be repressed for the vast majority of Americans, while the cost of living is higher in so many ways in America-but no, it's our fault that the Wall Street/corporate criminals deceived us, crashed the economy, and made out like bandits while the rest of us suffered?!
The fucking nerve of these Wall Street assholes.