Just As We Need More Economics Education, Why Is California Looking To Limit It?
from the bad-news dept
At a time when our economy has gone through one of the biggest upheavals most of us have lived through, you would think that people would be realizing that perhaps it would be helpful to have more people have at least a basic economics education. Not in California, apparently. Economist Greg Mankiw notes that the state of California is considering half of the current economics class requirement to cover personal finance issues, rather than actual economics. Personal finance — while related to economics — is not economics. Already, the economics requirement is a single semester, rather than two semesters like many other required classes. As Mankiw notes:
The legislation is akin to requiring high school biology teachers to spend half their class time on issues of personal health and nutrition. Personal finance is a useful life skill, but students need a more thorough grounding in other basic economic principles than what can be learned in the other half of a single semester course. They need a framework to think about such as topics as market outcomes, price controls, taxes, international trade, environmental regulation, monetary and fiscal policy, and so on. The goal of high school economics should be to produce not just smarter decision makers at a personal level but better informed voters on election day.
Many of the bad decisions we talk about on a regular basis would be a lot less serious if people had a grounding in basic economics — so it’s quite sad to see educational goals heading the wrong way.
Filed Under: california, economics, education
Comments on “Just As We Need More Economics Education, Why Is California Looking To Limit It?”
Actually, ALL economics in HS should be personal finance.
I can’t count the number of people who can’t even balance their own checkbook, don’t understand credit card interest rates, or hell, even read their own credit report.
In this world of “$20/month”, many kids just don’t understand personal finance. Many don’t have a budget, and countless spend on a “week to week” schedule, saving nothing.
Most high school kids don’t give a damn about economics in industry. Why should they care? Most of it is out of their control and educating them as “better” voters is laughable.
They need a framework to think about such as topics as market outcomes, price controls, taxes, international trade, environmental regulation, monetary and fiscal policy, and so on.
*Zzzzzzz*
That’s what teenagers will do when given these topics.
Teach them skills to be used after high school. Let them learn on their own later.
That’s what Google’s for.
I’ve yet to use my learning about foreign economics in any aspect of my life.
It’s wasted money, time, and loss of education for more useful skills.
Re: Actually, ALL economics in HS should be personal finance.
In other words, ‘I don’t give a damn about politics or helping my friends and family make more informed voting decisions.’
right way to go
I agree I had one semester of economics in high school and half was personal finance I agree that it is more important for people to get a rasp on personal finances. this might have caused less problems.
Yea, I think implementing personal finance into the HS cirriculum is a very good idea. Countless students in college didn’t know how to balance checkbooks, why having 8 credit cards maxed out, etc, is a bad idea.
On some levels, it may be up to the parents to educate their kids about personal issues- I was lucky enough to have parents who did so. But what about those whose parents who don’t care or have crappy personal financial skills? Does that mean those kids just get the shaft because their parents dropped the ball?
And I agree with the other comment about forgetting high school traditional economics ideas. Hell, the college I went to, econ was a required course for all college students, leaving the door open for HS to gear economics more towards personal finance.
Misfortunately...
I actually *gasp* agree with California on this one.
Half the semester can teach the fundamentals of economy in a way a high school student can absorb. Most high school students don’t care about high level economics, so their eyes glaze over as soon as they enter the classroom. They learn little. Enter something that relates to them personally, like personal finance. With the right curriculum, and teachers that care, (and perhaps software companies handing them free software to learn on) they can learn how to maintain their own personal economy. The students that want/need to learn more about economics can take a second advanced class that will help them to learn the higher end details. Make it an elective past the basics for world economy. Make the requirement personal and relevant.
The national and world economies are so directly related to personal economy that it’s painful to imagine so many consumers knowing nothing about how to manage their own finances. That is why the world economy is in the state it is now. People can’t balance their freaking checkbooks any more and things went belly up. Teach them how to manage themselves and you have a great start on keeping things on a more even keel. Maybe even demonstrate *another gasp* personal financial responsibility so they don’t screw themselves and need bailouts from mom and dad.
More places need to do this. I also think Intuit or *gasp* Microsoft needs to give away free software to students in this class. It will help them manage themselves and keep them buying the same software. Microsoft does this with Office, why does no one do this with Money or Quicken or anything else?
They need to learn how to start and grow a business.
We need more economics education???
I’m pretty sure the Wall Street brokers, bankers and politicians who created the current mess had a lot more than two semesters of high school economics and it didn’t help them one bit. On the other hand, if more people had some basic personal finance skills that might keep them from taking on unnecessary debt, they (and the rest of us) would be a lot better off than if they wasted that time arguing Keynesian versus Supply-side economic theory.
Re: We need more economics education???
Agreed, the truth is most of the worlds current financial troubles are directly caused by the theories and teachings of the best educated experts in economics. Maybe some basic math and simple logic classes would serve the public much better.
Mmhmm
“I don’t want a nation of thinkers. I want a nation of workers.” – J.D. Rockefeller
This legislation seems in keeping with the “Take care of your individual selves and leave the big picture to us awesome, trustworthy, global corporate types.
Re: Mmhmm
If you can’t even take care of yourself, you sure as hell can’t be informed enough to take care of others. This isn’t the government preaching to people, and misinforming them. This is a case of people not being taught at home how to take care of themselves, and the schools trying to step in and make it better. Most of this issue was caused by people taking mortgages they couldn’t afford. I had the opportunity to, and I never did, because I realized there was no way in hell I could afford a half-million dollar home on my salary. But I also understood personal economics.
@Tgeigs
Nice Rockefeller quote, and it perfectly captures gov’t thinking on this issue: they want voters with LESS understanding of macroeconomics. (though it seems like overkill-no amount of idiocy, irresponsibility or outright theft gets any of them UNelected…)
And the “current economic crisis” was NOT caused by a failure of understanding, it was a moral failure-the conscious choices of people at the top to “get mine before it falls apart”. The moral component is the “*shrug* so what?” attitude towards the decline in value of 401Ks and retirement funds, layoffs and bankruptcies that resulted from the precipitating money grab.
Re: @Tgeigs
It wouldn’t say it was a moral failure–the players did not suddenly just decide to be assholes after decades of economic activity. It was a systemic failure as a result of political interference into the market; things like the CRA, Fannie Mae/Freddie Mac, artificially low interest rates, pressure on credit ratings, etc. When Congress decides to continually butt in and create terrible incentives and moral hazards, this is predictably what happens. Rewarding those who created this mess and punishing those who succeeded on their own under the guise of “protecting the economy” isn’t a very good response, either.
In any case, this debate here seems to me an excellent reason why we should have a hell of a lot more school choice than we do. Private entities forced to get results for a living will make these decisions much better than we or the state of California can, and we’d have schools that went both ways anyways–those that emphasized personal finance, those that emphasize macroeconomics, and a mix of the two. I think a little bit of additional knowledge in the field of economics would be incredibly helpful, but frankly I think much of the electorate is too dumb, ignorant, selfish, and/or short-sighted to make this any less than a very formidable endeavor.
Re: Re: @Tgeigs
Corporate involvement in education was already explored in the early 1900s and it was roundly rejected for all the right reasons. Corporations dictating curriculum is a HORRID idea. Corporations are ultimately responsible to the shareholders, not to the children that would be under their charge. It doesn’t take much imagination to see where this would go. A McDonald’s High School gym class? Please.
Re: Re: Re: @Tgeigs
Why are you continually bringing up “corporations” in a derogatory sense as if private schooling suddenly means all these evil CEOs at the head of massive empires are going to exploit the kids to make a few bucks?
Private schooling is happening right now…extensively. Where do you think most of Congress has their kids? Obama himself? Read this CATO post here regarding private schooling vs. public:
http://www.cato-at-liberty.org/2009/03/17/american-prospect-strikes-mother-lode-of-falsehood/
Re: Re: Re:2 @Tgeigs
Okay, fair enough, so who were the Private Entities you referred to? Are they people NOT influenced by corporations? I don’t have a problem with MOST corps., just the globalist entities.
BTW, a majority of private schools are religion based. 49% of them are Catholic (another plutocracy):
http://www.catholicleague.org/catalyst.php?year=2006&month=September&read=2094
Religion is fine, but actively expanding its control over education? No thanks. So other than mega-corporations and religions (which are pretty much the same thing these days), what virtous entity is going to be running these private schools?
Re: Re: Re:3 @Tgeigs
Why must a private school be run by mega-corporations or some other “virtuous entity”? Is there some massive overhead I don’t know about? A large number of private schools are religious partly because highly religious families are more likely to pay extra to put their children in private schools.
And what about that 51% not in religious schools? Obviously, there is no reason why a parent is forced to put their children into a religious school if not desired. In fact, this is why school choice is so great. If you let people keep the money they would have spent in taxes allocated to inefficient and underperforming public schools, they can use it for whatever educational institute they feel is best for their children. And there is no inherent reason why the administrators of these schools have to be large corporations–those in the status quo provide plenty of evidence to this.
Re: Re: Re:4 @Tgeigs
I get what your saying, except for two things:
1. If schools don’t have to be run by religious groups or mega-corps., why aren’t they?
2. It’s not 49% religios private schools, 51% not. It’s 49% CATHOLIC schools, something like 75% religious (I have to go find the reference, I just had it), 23% corporate driven schools, 2% other.
Plus, per the original Rockefeller quote, those CEOs probably WOULD harm the overall education of children in favor of education more conducive to the corporation. Otherwise, why get involved at all? Corporations exist to make profit, schools exist to expand knowledge. The two goals are NOT conducive to one another.
Re: Re: Re:5 @Tgeigs
1. Because there is not enough demand for these schools in the general public given the “free” education provided by public schools(which is just paid for via taxes, which are not a choice), and as a result of the market private schools are more expensive and much less extensive. However, among less wealthy families that have been included in school choice programs such as vouchers and business tax credits, their satisfaction is enormous(check out my earlier link and I think the one you pointed to as well, although that one may be biased).
But this is not to say that there aren’t existing non-religious private schools not run by mega-corporations (I don’t actually know of any of the latter):
http://en.wikipedia.org/wiki/Phillips_Exeter_Academy
http://en.wikipedia.org/wiki/Deerfield_Academy
They look pretty good to me. And these schools are expensive and perhaps somewhat white-collar because of the current market–I think I read something about how poor families in Africa that did not have affordable, competent public schools created their own sustainable private schools that charged incredibly low rates and gave their kids an education. I’ll see if I can find a reference.
2. I caught that after I submitted, but again, this is a result of the market with government interference that subsidizes and incentivizes public schools. There is no reason why a kid has to go to the wrong private school for them, or why the market composition wouldn’t change with large school schoice programs.
The existing schools are doing great, better than public schools. In the long run, the schools that will continue to be successful and draw students are the ones that produce the greatest academic achievement, not those that sell out their gyms to McDonald’s. I wouldn’t send my kids to that school, and neither would most others.
Re: Re: Re:6 @Tgeigs
African schools study:
http://www.ifc.org/ifcext/economics.nsf/AttachmentsByTitle/educating_amaretch_gold_essay.pdf/$FILE/educating_amaretch_gold_essay.pdf
Re: Re: Re:7 @Tgeigs
That one’s blocked at work, but I’ll check it out at home. I should clarify, I’m all for choice. I’m just VERY weary of who is controlling the education process, since they have significant power to control future population and policy. Good and bad people have understood that fact, including both Montesori AND Hitler.
And I think that the sample size and makeup for judging private school performance over public schools is disingenous. Your simply not talking about the same quality of student, due to a variety of factors.
Re: Re: Re:8 @Tgeigs
Heh, the International Finance Corporation(“Reducing Poverty, Improving Lives”) is blocked at work? Interesting filter 😉
I’m just VERY weary of who is controlling the education process, since they have significant power to control future population and policy.
I agree, which along with financial efficiency is why I support school choice. In public schools, the kids are all basically taught the same thing, at the behest of the politics of the school boards. By choosing the school I want, I can look at their policies and results and avoid a school that is not showing academic improvement or is, say, teaching alternatives to evolution in a science class. I think this makes it harder for any one devious entity to sway public opinion and development.
As for the comparison, the African study claims that it factored in other metrics (and they were all poor, uneducated kids to begin with), and the CATO post I believe is an aggregation of all school choice studies in the U.S. The whole thing with school choice, though, is that these kids do not have any advantage in wealth or intelligence; those kids are already in private schools if so desired. These kids are poor, and were stuck in public schools until they received government vouchers or donations from businesses that got tax credits in return. They are then able to attend a private school of choice, and they display improved performance metrics compared to the peers not in the study, and at a fraction of the cost.
I see why you are tentative about it, but I think school choice is the best way to counter your fears if the policies and results of these schools are transparent so that parents can pick the best school for their kids’ future.
Re: Re: Re:2 @Tgeigs
Why are you continually bringing up “corporations” in a derogatory sense as if private schooling suddenly means all these evil CEOs at the head of massive empires are going to exploit the kids to make a few bucks?
What? A large corporation would exploit someone for profit? Tell me it isn’t so!
Re: Re: @Tgeigs
It wouldn’t say it was a moral failure–the players did not suddenly just decide to be assholes after decades of economic activity.
No, they decided that a long time ago. It just took them a while to get the laws rigged around enough to get away with it.
Re: @Tgeigs
“it was a moral failure-the conscious choices of people at the top to “get mine before it falls apart””
Possibly. Some of us think it wasn’t a failure at all, but rather purposeful and planned. Afterall, the true measure of fascism is a disappearance of nationalities and borders, with control resting with internaional corporations. Can you say EU, OPEC, NAFTA, United Nations (built on Rockefeller donated land), etc.?
Re: @Tgeigs
I don’t think that’s accurate for the most part. Sure, there were some clear scams going on, but much of the problem was caused by faulty models.
The basis of the majority of the problem though was millions of individuals making extremely bad choices. Sure, we can slam the traders selling mortgage derivatives, but what about the guy buying a house that he clearly can’t afford? Sure, Madoff was a jerk, but so were the people who put the majority of their investments with him. Asset allocation is the most important factor in personal investing, if they had known that they would have recognized that putting all of their money into the highest rewarding (and thus highest risking) investment available to them was a BAD IDEA.
Economics doesn't matter when you're deciding what car to buy
But personal finance does.
A huge part of the problems that we have now are caused by people who have no understanding of how to manage their finances and what they can reasonably afford.
Good to see California is taking the right steps.
I mean come on, in an ideal world everyone would never skip school, would get straight A’s and would be taking 3 full years of economics training because that is going to fix the bad decisions? Most decisions are made on lack of information. But that lack of information isn’t the only problem, greed and denial keep people from making good decisions too, regardless of the information on the deal.
At least personal finance will help these people in their personal lives on a more immediate basis, which in turn might keep them out of the working trap enough to realize they should continue their financial education outside of school.
I mean seriously, a full semester of economics (two in other states) sure didn’t prevent our current state from happening. Why would people think more of the same would make a difference. At least personal finance is directly applicable by the students, instead of just random facts and ideas that will be forgotten after the test.
But in the end, I can’t agree more with the Rockefeller quote. People need to realize their real place in the world/country and then think about what they need to be learning to change it.
Mankiw is thinking too highly
I have taught into to Econ. It can be a very useful tool to getting young people to think about matters in ways they have never considered before. Most high school level classes focus primarily on micro, not macro, economics. The subjects that are brought up are mainly in the macro realm and while they are important, simply aren’t covered in depth until the college level. As it is, covering micro in a single semester requires a very fast pace to be set, which doesn’t help matters and can make it more difficult to explain things to the best extent so that the students can learn.
Personal finance is also important and should be taught as it is a skill that is obviously lacking in today’s youth, not to mention the adults as well. The “wall street brokers, bankers and politicians” probably weren’t taught at the highest levels of economics, they were taught at the highest levels of business, which is different. Economics classes generally are required at these levels, but only the most basic courses. We need our youth to be able to think critically. Even if it is in a field that they have no formal training, if they have that skill set, they will be able to make more informed decisions by being able to think through problems from multiple aspects. Economics is one of the fields that lends itself very well to this goal, and shouldn’t be skimped on for skills that while important, can be taught elsewhere, such as the home, or in a whole other class.
Missing the Bigger Picture
Sadly, both sides of the issue miss a more important point: Most of us learned very little from the programs that were given in high school.
High school economics is a joke: very little is covered and examples frequently have little to do with the real world. Furthermore, the direct association between Economics and Politics is completely ignored.
Shifting the focus from economics to personal finance isn’t going to hurt the problem because the current approach doesn’t actually help.
It strikes me that the right answer is to teach both … much more of both. Oh, and take a hint from college programs around the country: Use real world case studies to help students see the real picture.
Which bad decisions that we talk about on a regular basis?
As I keep hearing it, the biggest part of the current economic crisis comes down to people who took out mortgages they couldn’t afford. Personal finance sounds like just the thing!
I sympathize about wanting to share the fun and the insight of one’s own discipline with everyone, and the difficulty of accepting that it’s not so crucial for everyday existence that kids need to be forced to learn all about it. As a programmer, I’d love for everyone to understand at least something about the stuff that goes on inside their computer case, but I will grudgingly admit that when you’re talking essential life skills, it’s more important that the average person just know about doing backups and running antivirus software.
Its quite simple
If the general public had more knowledge of how the economy works, then it would actually cease to work in its current form. It is mostly based on speculation and smoke and mirrors, and if we were all educated in its intricacies, then we would be less likely to give up our money as quickly and thus they would make less money. The government does not want a highly educated society, they want an easily controlled one.
I have been using http://DesktopBudget.com to manage my personal finances for a few months now. Its the easiest to use free, offline personal finance manager I have seen so far.
Economics education
Anything that does not further “Welfare for the Wealthy”,
especially if it helps show that is what the Governator and the GOP are all about, will continue to be cut.