Missed this earlier this week, but Durbin is backing a Financial Products Safety Commission modeled on the Consumer Products Safety Commission.
The New Republic has more about the origins of the idea with Elizabeth Warren.
The details of such a plan always matter, but in general, I think this is a great idea. Over the last three decades, conservatives have pushed average Americans to take ever greater direct responsibility for their financial lives. Bush’s “ownership society” is an example of this. Okay, fine. There’s something to people bearing individual responsibility for their economic future.
However, all of this came without a similar push to get people the education necessary to make those decisions well – in other words, financial literacy.
Look, I have an MBA. My wife has an MBA. I read a fair bit about the best ways to handle our money, like how to invest our401k. But even we struggle at times to understand everything that we’ve been asked by society to take on. And if you’ve ever tried to look through a prospectus, I think you can relate. Never mind the complexity of mortgage documents and credit card rules, etc. Again, we have advanced training. In general, financial literacy is even worse.
Sure, I and anyone else could hire a financial adviser. But it can be very tricky to find a good one. And that’s also a very regressive answer. How exactly is a family that’s struggling to put food on the table or pay off their mortgage supposed to justify spending the money to get someone to help them figure out their finances?
I believe it would be incredibly helpful to have an agency committed to making financial decision-making easier for the average American. Maybe, with a little more education, we wouldn’t have the incredible mortgage debt that’s now dragging down U.S. homeowners. We don’t need more conservative moralizing about how people should just learn to live in their means or just suck it up. We, as a society, owe it to ourselves and others to help find the best ways to navigate financial decisions.
Remember, the jokers on Wall Street apparently didn’t even understand what they were buying and look where it got them. Of course, they can spend their idle time counting their millions. Average Americans aren’t so lucky.