I think it is very important to teach teenagers financial literacy. Maybe you can talk to middle and high schools and/or talk to some organizations like Boys and Girls Clubs, United Way groups, Women's Funds about starting programs to help teens learn what budgeting means, what credit cards are, what compound interest is, how banks work, what interest rates are, etc. etc. So important people learn about finances before they are adults.
Good column, and you have hit some of the main factors on the head including the use of jargon when giving interviews to the media, and few economists writing for the general public (you, Paul Krugman are exceptions).
Another factor that you should consider: at times economists seem to dismiss concerns that are legitimate about economic change. Yes, new technology generally does improve most people's lives - eventually. However, saying that while ignoring the fact that for some people their lives just got much harder really does not help endear economists to people. The perception is that economics and economists are used to justify harsh policies: "that's just the economics of it". End of discussion, move on, nothing to see here.
My understanding of economics has been greatly improved by reading the great Paul Krugman over the years and, more recently, your pieces. There is so much to learn during school and university years. However, economics (and perhaps civics) should be part of the core requirements for graduation. Some basic knowledge of both fields would further a functioning society.
Certainly economists can and should do better. But the media works against us -- a reporter's instinct is to make everything covered a controversy, which often requires them to find a nutty economist who everyone else in the profession knows is dead wrong, or to take a sound bite out of context. Tough enough to encourage traditional media to change this bias, and I despair of changing social media approaches.
Excellent post. I have taught a financial literacy course for a department of economics, but it got cancelled due to low enrollment (which was not due to my teaching, I believe, as enrollments fell very generally across courses.
Two comments: My cat is smarter than yours.
Perhaps we shouldn't teach antitrust. Kind of self-defeating.
Public trust in economists is generally low to moderate, sitting well below professions like medical or hard sciences but usually above politicians and journalists. Polls indicate that roughly half of the public believes economists express views based more on personal and political opinions than on objective, verifiable data. Major macroeconomic misses—such as failing to collectively predict the 2008 financial crisis or misjudging inflation spikes—severely damaged the profession's credibility. Unlike doctors, who focus on individual care, economists design macro policies that intentionally accept "trade-offs". For example, raising interest rates to fight inflation might purposely trigger unemployment, leading the public to view the discipline as unfeeling or paternalistic.Modern economics relies heavily on complex mathematical formalism. Because humans do not behave like perfectly predictable equations, the public often feels these abstract models lack real-world utility.
To repair its tarnished public image and build meaningful public trust, the economics profession must shift from acting like pure "hard scientists" who sit in ivory towers and instead embrace the role of accessible public educators. Policy changes and economic concepts must be translated into plain language that directly relates to everyday life. Instead of discussing abstract "macroeconomic volatility," economists should frame discussions around food affordability, electricity costs, wages, and local business The profession must prioritize active listening and two-way dialogue. By organizing public town halls, surveys, and stakeholder consultations involving labor unions, small business owners, and youth groups, economists can actively incorporate public values into their frameworks. High school and undergraduate curricula need to be redesigned to highlight the social relevance of the field. Educational frameworks should showcase how economic tools are vital for solving massive societal challenges, such as healthcare distribution, climate change, and global poverty relief.
I appreciate your talk, and the fact that you wound up living in a trailer, because that experience might help you with the core identified problem: Poverty is the lack of money in a monetized society, not a lack of morality, intelligence, work ethic, or desire to do all the things economists say we should do.
Economists saying we don't pay attention to their wisdom are like doctors chiding us for not washing our hands when our real problem is a lack of water.
Having been both poor and not poor I did not see how the economy was rigged against me until it was suddenly rigged for me. That month I wondered where all the extra money came from. Then I realized I had hit the FICA cap. Suddenly I was taxed less, and I could safely save that money. At the same time I was earning more, and could shelter income from taxes with a SEP. Win/win/win, one of which was my work, two of which were policy.
Economists rarely talk in public about how tax policy now rewards the winners with greater gains, and punishes most people with both higher tax burdens and fewer services to pay for the gains amassed well above the median income/wealth levels.
Instead economists promulgate one size fits all academic advice to everyone, regardless of its practicability in real lives. We cannot wash our hands without water, we cannot increase our economic health without money. Medical professionals worked long and hard to make adequate potable water supplies a thing. Economists worked long and hard to ensure investors get wealthier and markets boom without real practical concern for the economic health of essential workers, who are told their hand-to-mouth existence is due to their laziness or gluttony, but never to how policy was formed to keep them on the edge of poverty and thus working (as the economist Peter Navarro advocates) into their 70s.
Today's "populist" revolt is due to the fact economists helped rig the economy such that its benefits created billionaires, while "essential workers" are told to be satisfied with their smartphones with gambling apps.
I just listened to an unnerving report about diesel fuel. It painted a grim view of what's ahead for inflation given trucking, agriculture, and home heating oil reliance on it and how given the Russia/Ukraine and Iran wars, we're running out of it and can't produce more of it than we're already doing. Just look up "Diesel Supply Squeeze".
I find many people do not understand taxes. They think tax refunds are the government giving them money, not their own excess payments to the government. Many people have no idea what their taxes pay for. They don’t connect law enforcement, the legal system, road construction and maintenance, etc. to the taxes they pay.
I think "Economics & Finance for Average Americans" is a splendid idea, and you ought to publish a high school course book on just that subject to be used in both high schools and by families around the kitchen-table. Also, inclusion of how macro-economic theories and the laws coming out of DC affect the average person - connecting the dots - would be helpful, as for many Americans, legislation is a mystery and they have no idea how legislation will affect them. The biggest difficulty will be overcoming what the ideologues in both parties opine about economics - but mainly the false "alternative facts" and opinions issued by the Right and their media, which now has a multi-decade record of "adjusting" economic theory to suit their desired ideological end-game (e.g., supply-side economic theory). Which, I suppose these days, puts economists right up there with historians when it comes to "tail wagging the dog" presentations of reality or the past. I mean if the average American "opposes" labor unions and blames union-negotiated wages for causing the loss of large numbers of jobs around the country - as the Right has claimed - how on earth can one hope the average American will grasp such things as risk pooling in insurance theory and the ACA? It's a much-needed and very good idea to teach economics and finance for and to the average family - i.e., the American family that has enough income to do things like save for a vacation and the kids' college education - but I dread how the Right will screw it up like they always do and then how many people will believe them rather than reality-based economics lessons taught by trustworthy economists who just want people to understand how American capitalism is supposed to work vs how it's actually working (or rather, not working).
I listened to ric Edelman on the radio for 2 hrs every Sunday for free.
My dad was great with finances. I was lucky enough to watch how he handled hard times. He passed and my mom isn’t into finance I didn’t know. Morgan Stanley had her in Lehman she was 72 then. She lost 400,000 gone in one statement.
I took the rest out put it in Edelman financial engines.
11 years withdraw 15,000 a yr. Started with 315,000 she has 283,000.
I learned a hard lesson. Morgan Stanley never had a meeting with my mom when my dad died suddenly.
Thanks for helping more people understand where their dollars work. Maddy
Very interesting, Maddy. Your mom’s financial experience during the Great Recession was just tragic. The losses my wife and I suffered were similar to hers. If I did the math correctly, either Edelman or you set up withdrawals of about 4.7% per year. I think many financial advisors recommend withdrawals from retirement accounts of around 4%/year so, the plan you or Edelman or your mom or all three of you together arranged sounds good to me (though I’m no expert). I’m sure you and your mom know, as do we, that her financial loss in the Great Recession did mean she has had to make do with less income and a lower standard of living from a financial point of view, but there’s more to life than money and it seems to me she has a wonderful daughter helping to make her life better.
I would love to see you and Stacey write a high school-level economics textbook that’s readable and relatable with both the concepts, like why you should take your employer’s match on your 401K and pay down your credit cards, and how personal finance works, especially the concept (that I didn’t hear about until I was much older) about paying yourself first, i.e., savings. And compound interest, all of that. No one taught me. I figured it out as time went on because while I suck at actual math, I am good at understanding the concepts. Too many people aren’t even offered the concepts and certainly not in a way the average person can understand. On a separate note, until I started following you, I never gave economists much thought vis-a-vis trust. Although I would have always rated you much higher than the polls showed. Thanks, as always, for what you do.
I agree with Ms Shuster. I am on the board of a nonprofit that helps folks when they experience financial difficulties. It is clear they have never been taught financial literacy. Some of this is generational ignorance, but students would certainly benefit from classes on the subject.
I think it is very important to teach teenagers financial literacy. Maybe you can talk to middle and high schools and/or talk to some organizations like Boys and Girls Clubs, United Way groups, Women's Funds about starting programs to help teens learn what budgeting means, what credit cards are, what compound interest is, how banks work, what interest rates are, etc. etc. So important people learn about finances before they are adults.
I think teaching more personal finance is a really good idea. This article was a good read.
Good column, and you have hit some of the main factors on the head including the use of jargon when giving interviews to the media, and few economists writing for the general public (you, Paul Krugman are exceptions).
Another factor that you should consider: at times economists seem to dismiss concerns that are legitimate about economic change. Yes, new technology generally does improve most people's lives - eventually. However, saying that while ignoring the fact that for some people their lives just got much harder really does not help endear economists to people. The perception is that economics and economists are used to justify harsh policies: "that's just the economics of it". End of discussion, move on, nothing to see here.
My understanding of economics has been greatly improved by reading the great Paul Krugman over the years and, more recently, your pieces. There is so much to learn during school and university years. However, economics (and perhaps civics) should be part of the core requirements for graduation. Some basic knowledge of both fields would further a functioning society.
Certainly economists can and should do better. But the media works against us -- a reporter's instinct is to make everything covered a controversy, which often requires them to find a nutty economist who everyone else in the profession knows is dead wrong, or to take a sound bite out of context. Tough enough to encourage traditional media to change this bias, and I despair of changing social media approaches.
How to teach teenagers about finance would be a good start.
I would like to go out on a limb and suggest that this is THE most pressing problem. "My poor Krell, they never k
understood what was killing them."
Excellent post. I have taught a financial literacy course for a department of economics, but it got cancelled due to low enrollment (which was not due to my teaching, I believe, as enrollments fell very generally across courses.
Two comments: My cat is smarter than yours.
Perhaps we shouldn't teach antitrust. Kind of self-defeating.
Public trust in economists is generally low to moderate, sitting well below professions like medical or hard sciences but usually above politicians and journalists. Polls indicate that roughly half of the public believes economists express views based more on personal and political opinions than on objective, verifiable data. Major macroeconomic misses—such as failing to collectively predict the 2008 financial crisis or misjudging inflation spikes—severely damaged the profession's credibility. Unlike doctors, who focus on individual care, economists design macro policies that intentionally accept "trade-offs". For example, raising interest rates to fight inflation might purposely trigger unemployment, leading the public to view the discipline as unfeeling or paternalistic.Modern economics relies heavily on complex mathematical formalism. Because humans do not behave like perfectly predictable equations, the public often feels these abstract models lack real-world utility.
To repair its tarnished public image and build meaningful public trust, the economics profession must shift from acting like pure "hard scientists" who sit in ivory towers and instead embrace the role of accessible public educators. Policy changes and economic concepts must be translated into plain language that directly relates to everyday life. Instead of discussing abstract "macroeconomic volatility," economists should frame discussions around food affordability, electricity costs, wages, and local business The profession must prioritize active listening and two-way dialogue. By organizing public town halls, surveys, and stakeholder consultations involving labor unions, small business owners, and youth groups, economists can actively incorporate public values into their frameworks. High school and undergraduate curricula need to be redesigned to highlight the social relevance of the field. Educational frameworks should showcase how economic tools are vital for solving massive societal challenges, such as healthcare distribution, climate change, and global poverty relief.
I appreciate your talk, and the fact that you wound up living in a trailer, because that experience might help you with the core identified problem: Poverty is the lack of money in a monetized society, not a lack of morality, intelligence, work ethic, or desire to do all the things economists say we should do.
Economists saying we don't pay attention to their wisdom are like doctors chiding us for not washing our hands when our real problem is a lack of water.
Having been both poor and not poor I did not see how the economy was rigged against me until it was suddenly rigged for me. That month I wondered where all the extra money came from. Then I realized I had hit the FICA cap. Suddenly I was taxed less, and I could safely save that money. At the same time I was earning more, and could shelter income from taxes with a SEP. Win/win/win, one of which was my work, two of which were policy.
Economists rarely talk in public about how tax policy now rewards the winners with greater gains, and punishes most people with both higher tax burdens and fewer services to pay for the gains amassed well above the median income/wealth levels.
Instead economists promulgate one size fits all academic advice to everyone, regardless of its practicability in real lives. We cannot wash our hands without water, we cannot increase our economic health without money. Medical professionals worked long and hard to make adequate potable water supplies a thing. Economists worked long and hard to ensure investors get wealthier and markets boom without real practical concern for the economic health of essential workers, who are told their hand-to-mouth existence is due to their laziness or gluttony, but never to how policy was formed to keep them on the edge of poverty and thus working (as the economist Peter Navarro advocates) into their 70s.
Today's "populist" revolt is due to the fact economists helped rig the economy such that its benefits created billionaires, while "essential workers" are told to be satisfied with their smartphones with gambling apps.
Good outline.
I just listened to an unnerving report about diesel fuel. It painted a grim view of what's ahead for inflation given trucking, agriculture, and home heating oil reliance on it and how given the Russia/Ukraine and Iran wars, we're running out of it and can't produce more of it than we're already doing. Just look up "Diesel Supply Squeeze".
I find many people do not understand taxes. They think tax refunds are the government giving them money, not their own excess payments to the government. Many people have no idea what their taxes pay for. They don’t connect law enforcement, the legal system, road construction and maintenance, etc. to the taxes they pay.
I think "Economics & Finance for Average Americans" is a splendid idea, and you ought to publish a high school course book on just that subject to be used in both high schools and by families around the kitchen-table. Also, inclusion of how macro-economic theories and the laws coming out of DC affect the average person - connecting the dots - would be helpful, as for many Americans, legislation is a mystery and they have no idea how legislation will affect them. The biggest difficulty will be overcoming what the ideologues in both parties opine about economics - but mainly the false "alternative facts" and opinions issued by the Right and their media, which now has a multi-decade record of "adjusting" economic theory to suit their desired ideological end-game (e.g., supply-side economic theory). Which, I suppose these days, puts economists right up there with historians when it comes to "tail wagging the dog" presentations of reality or the past. I mean if the average American "opposes" labor unions and blames union-negotiated wages for causing the loss of large numbers of jobs around the country - as the Right has claimed - how on earth can one hope the average American will grasp such things as risk pooling in insurance theory and the ACA? It's a much-needed and very good idea to teach economics and finance for and to the average family - i.e., the American family that has enough income to do things like save for a vacation and the kids' college education - but I dread how the Right will screw it up like they always do and then how many people will believe them rather than reality-based economics lessons taught by trustworthy economists who just want people to understand how American capitalism is supposed to work vs how it's actually working (or rather, not working).
I listened to ric Edelman on the radio for 2 hrs every Sunday for free.
My dad was great with finances. I was lucky enough to watch how he handled hard times. He passed and my mom isn’t into finance I didn’t know. Morgan Stanley had her in Lehman she was 72 then. She lost 400,000 gone in one statement.
I took the rest out put it in Edelman financial engines.
11 years withdraw 15,000 a yr. Started with 315,000 she has 283,000.
I learned a hard lesson. Morgan Stanley never had a meeting with my mom when my dad died suddenly.
Thanks for helping more people understand where their dollars work. Maddy
Very interesting, Maddy. Your mom’s financial experience during the Great Recession was just tragic. The losses my wife and I suffered were similar to hers. If I did the math correctly, either Edelman or you set up withdrawals of about 4.7% per year. I think many financial advisors recommend withdrawals from retirement accounts of around 4%/year so, the plan you or Edelman or your mom or all three of you together arranged sounds good to me (though I’m no expert). I’m sure you and your mom know, as do we, that her financial loss in the Great Recession did mean she has had to make do with less income and a lower standard of living from a financial point of view, but there’s more to life than money and it seems to me she has a wonderful daughter helping to make her life better.
Thanks.
I would love to see you and Stacey write a high school-level economics textbook that’s readable and relatable with both the concepts, like why you should take your employer’s match on your 401K and pay down your credit cards, and how personal finance works, especially the concept (that I didn’t hear about until I was much older) about paying yourself first, i.e., savings. And compound interest, all of that. No one taught me. I figured it out as time went on because while I suck at actual math, I am good at understanding the concepts. Too many people aren’t even offered the concepts and certainly not in a way the average person can understand. On a separate note, until I started following you, I never gave economists much thought vis-a-vis trust. Although I would have always rated you much higher than the polls showed. Thanks, as always, for what you do.
I agree with Ms Shuster. I am on the board of a nonprofit that helps folks when they experience financial difficulties. It is clear they have never been taught financial literacy. Some of this is generational ignorance, but students would certainly benefit from classes on the subject.