How Did We Get Into this Mess?

In the spirit of the political season, I'm going to get up on my soapbox today and do a bit of lecturing. There has been an awful lot of finger pointing, rationalizing, and denial going around lately with regard to all of the economic turbulence we are experiencing. Even many experts seem genuinely at a loss to explain exactly what went wrong and how we have come to this. Lots of musicians and other ordinary folks are feeling like helpless victims of those who "control the system".

Well, this may not be a popular thing to say, but I personally feel that we all bear responsibility, collectively and individually, for the financial condition we find ourselves in at any given time. Most people reading this blog are living in capitalist democracies, with a great deal of freedom to engage in free enterprise as they please. But with such freedom comes the responsibility to educate oneself and stay informed on financial matters. If you don't basically understand how a capitalist economy works, how can you expect the system to work to your advantage?

The good news is that anybody with a junior high school education can easily learn the essential principles of responsible personal finance. It's really not as complicated as most people think. Yes, professional investors do use fancy statistical analysis tools to evaluate markets and investments, but the average investor can generally get by pretty well using just basic arithmetic. I've long felt that a basic personal finance course should be a required part of every high school curriculum. I have no idea why this is considered a taboo subject for public education, and I'm convinced that with such training, the average citizen would wind up in far better financial shape. And if each of us individually kept our financial house in order, the overall economy would function a lot better.

I'm also convinced that if ordinary citizens had a better grasp of responsible money management, we would be more likely to hold our elected leaders accountable to maintaining responsible government budgets, instead of the rampant deficit spending we currently see in governments around the world. Let's face it folks, we've been resistant to learning about money for too long, and that ignorance is now coming home to roost. Things will only get better when we all start getting smarter about personal finance.