I wish it were from The Onion, but unfortunately, it's not:
While Americans from Wall Street to Main Street focus on much-needed financial reforms that will set and enforce clear rules across the financial marketplace, we also need to recognize that most Americans don't have the knowledge and skills they need to make the right financial decisions for themselves and their families.
--"Using Education to Cope With a Complex Economy"; The Huffington Post (4/27/10)
Imagine just witnessing -- OK, living through -- the biggest (financial) freeway crack-up in almost 80 years.
The proximate causes (in order)?
No speed limits; defective cars; and no highway patrol (although if they're no speed limits, exactly what are they enforcing?).
The solution(s) to the foregoing would obviously be: going 55 mph (vs. 200 mph-plus); well-designed cars; and cops.
So, is that what Timothy Geithner (Treasury Secretary), Arne Duncan (Education Secretary), and Valerie Jarrett (Senior Obama Advisor) -- co-authors of the piece quoted above -- are calling for?
Not exactly.
They think the solution is for average Americans to become more financially literate.
In other words, prevent another financial crash by focusing on . . . better driver ed.
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Actually I think "better driver's ed." is part of the answer. Knowledge is the best defense against con games and the herd mentality.
Don't get me wrong: as the plaque beneath the statue of Emil Faber ("Animal House") says, "knowledge is good."
So is financial knowledge.
But that ignores Wall Street's m.o. the last, say, 20 years or so.
With ever-more bizarre, complex products ("synthetic collateralized mortgage obligations," anyone?) it has increasingly used complexity to obfuscate and confuse.
When the economics ph.D's and MBA's don't even get it -- or get it exactly wrong (remember the Nobel laureates behind Long Term Capital Management), blaming the financial crisis on people's financial ignorance is a red herring.
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