GONSALVES: Investment Education

Thanks to my mother's sacrifice, I was blessed to have a privileged pre-college education. Unfortunately, like most American school kids, I came out on the other end as a financial ignoramus.

But I'm happy to report that I was able to develop certain critical faculties, which should please social commentator Neil Postman, who has written that most American students enter the education system as question marks and come out as periods, meaning the art of question-posing and exploration has fallen by the wayside in favor of cramming kids' heads with "the right answers."

And although conservative school critics lament the "dumbing down" of education and think standardized tests and higher SAT scores will somehow "raise the bar" and provide equal opportunity for all, the reality is this: Only a relatively small segment of the population can realistically expect to enjoy the status of higher paying professions like that experienced by accountants, engineers, lawyers and doctors.

That means, without major structural change, the majority of American students will eventually become wage earners dependent on an employer's paycheck and the whims of the labor market. And a relatively small portion of future high school graduates will take the considerable risk of becoming entrepreneurs or small business owners.

So there doesn't seem to be any end in sight to the life-sapping work-spend-debt cycle that millions of Americans are trapped in right now, more commonly called "The Rat Race."

So, I can't understand, for the life of me, why financial literacy isn't part of the core curriculum in public school education.

Given the debt-slavery millions of Americans are shackled by, I would think financial education would be of far more practical importance than arguing over whether or not the Ten Commandments should be posted in schools or if "multiculturalism" is just code for destroying the mythical legacies of America's founders.

I propose that all high school students be required to take basic financial management and accounting courses, which would do more for future graduates than a library full of William Bennet books.

I also propose economic history be a mandatory course so that people can understand the difference between economic theory and economic reality -- a distinction often blurred by snooty economists like Thomas Sowell, who seems never to miss a chance to point out how everyone who doesn't agree with him is simply in need of a Sowell-led Econ 101 class.

Mandatory high school courses in economic history would not only provide context for understanding financial management; it would also help clear up a long-running racial debate in this country; namely, why is it that there's been a consistent black-white wealth gap.

Is it that most blacks are either too lazy or too dumb to pull themselves up by their own bootstraps, or are there some other forces at work?

A new book called "The Hidden Cost of Being African American," written by Brandies sociology professor Thomas Shapiro, might be a good textbook for the economic history course I'm proposing.

In it, you'll learn the difference between income and wealth, which would help voters stop getting distracted by politicians and pundits who promote the idea that jobs and income are what matters most. (By the way, there was full employment for blacks during slavery. So political promises of jobs have never turned me on much).

Shapiro's work unearths something that many personal responsibility conservatives simply ignore. He found that most American families who enjoy a comfortable middle-class existence do so, largely, because of inheritances.

He's not talking trust-fund babies. He's talking about less spectacular gifts such as having your parents pay for your college, saving you the expense of paying off college loans, or helping you to pay the down payment on a first home.

The average African-American family has 10 cents of wealth for every dollar of wealth that the average white family has. And wealth, as Shapiro points out in an interview with Commonwealth magazine, "is a special form of money."

"We usually don't think of income as getting-ahead money. Income doesn't feed dreams. Income doesn't launch social mobility. That's what most families use wealth for, wealth being a stored-up reserve of financial assets that families consciously use for either safety-net purposes or getting-ahead purposes."

These kinds of assets, Shapiro explains, are "something outside the process of merit and achievement. And other than a parent's death, in America there's no larger trigger for the transfer of wealth between generations than the buying a first home.

He also points out how common it is for white youngsters to get financial help from their parents and how impossible it is for many black youngsters to do the same because, unlike white immigrants who faced discrimination when they came to America, blacks were barred from programs like Federal Housing Administration loans and the GI bill that helped create a large white middle class.

In fact, because the parents and grandparents of most black Americans were economically segregated for centuries, those in my generation who have "made it" are more likely to be taking care of their parents, financially, which is the exact opposite of the experience of most white families, according to Shapiro (who is white).

So let's be honest. Blacks need to better educate themselves financially, as do millions of white working class brothers and sisters. And white America needs to acknowledge that the legacy of white supremacy is still with us and to say that blacks are getting a fair shake in all this is a just plain ridiculous, paltry affirmative action programs notwithstanding.

If we don't push for financial and economic history education in school, which would set the groundwork for meaningful policy changes grounded in reality as opposed to theory, then we'll be having this debate among debt-slaves for another hundred years.

Sean Gonsalves writes for Cape Cod Times.

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