April was national financial literacy month, promoted heavily by major banks and other debt-producing institutions who want you to believe that poverty, the financial crisis, and mounting student debt are the result of ordinary people’s ignorant refusal to discipline themselves and budget properly. Via the Guardian, Helaine Olen writes:
Companies and colleges say that if we all understand our finances, financial crises won’t happen. This is simply untrue.
April is National Financial Capability Month. Federal Reserve chairman Ben Bernanke says: “Among the lessons of the recent financial crisis is the need for virtually everyone – both young and old – to acquire a basic knowledge of finance and economics.” Sounds great.
But it promotes the false equivalence that the victims of the financial shenanigans of the past several years are as responsible for the financial crisis as the financial services sector, the ultimate creator of all those financial products of mass destruction. Think about it this way: did you take on a collateralized debt obligation? Did your neighbor?
So you get outfits like Bank of America, which debuted a financial literacy series created with the Khan Academy. From the press release announcing the effort: “Bank of America recognize[s] that no matter where you are starting from, the best way to improve long-term financial success is by changing habits slowly, step by step.”
This is the same Bank of America where a few years ago an executive named Ric Struthers blamed the housing crisis not on the organizations like Countrywide Financial, which BoA bought in 2008 despite the fact that it was at the epicenter of such mortgage practices as liar loans and deceptive marketing to consumers, but on the people who fell victim to the housing crisis.
Colleges [such as] Penn State, one of the most expensive public four-year colleges in the country, are also getting in on the financial literacy movement because, after all, one needs to do something about all that student debt, all $1 trillion of it.
You set up a new office devoted to financial literacy, where students can learn how to “make better decisions about budgeting, borrowing and loan repayment”. When I emailed Penn State to ask about how financial literacy could compensate for such things as the fact that college tuition nationwide has more than doubled since 1980, this is the response I got from Daad Rizk, the head of the program:
“Financial literacy helps students to treat education as an investment in their future. The real problem is not the rising cost of education, it is in the lack of financial planning and lack of financial literacy skills.”
No mention at Bank of America or the National Financial Educators Council that median income in the United States fell by more than 12% between 2000 and 2012, according to the Center for Budget and Policy Priorities. If there is a class in how to fix this one, sign me up.