Martin Luther King Jr. had a dream and so does Professor Robert Shiller. Civil rights trump financial freedom, of course, in the grand scheme of priorities and so I don’t presume to equate one with the other. That said, it’s a lot tougher to maintain civil rights in the long run without some progress in building and maintaining financial freedom and so on some level we all have a vested interest in advancing both.
Certainly we can all agree that prudent, sound advice on matters financial helps everyone as well as the economy generally. Assisting the masses in the cause of building, growing and preserving wealth won’t solve all the world’s problems, but it helps. With that in mind, Shiller’s piece in the Times yesterday raises the idea that promoting financial literacy is productive as public policy. It’s also timely, given the huge losses suffered recently by so many investors, large and small. “Many errors in personal finance can be prevented,” he writes. “But first, people need to understand what they ought to do.”
Alas, financial literacy seems to be the exception rather than the rule in the world of dispensing investment advice. We can debate how to go about changing that, but there’s no doubt that clear thinking on managing money is in short supply. Given the current economic and financial climate, a solution is needed post haste. Letting the masses fumble what is increasingly a central decision for securing their retirement security is the equivalent of fiddling while Rome burns.