On June 19, 2009, when. Treasury Secretary Geithner sat before the Senate’s Appropriations Committee, Sen.Inouye (D-HI) asked the following question:
The American people, Mr. Secretary, lack basic financial literacy. Without a sufficient understanding of economics and personal finance, individuals cannot appropriately manage their finances, evaluate credit opportunities, successfully invest for long-term financial goals, or even cope with difficult financial situations. One of the root causes of the current economic crisis was that people were steered into mortgage products which caused risks that they could not afford. Mr. Secretary, the proposal indicates that the Consumer Financial Protection Agency will add important financial educational responsibilities…. How will the CFPA interact with the Financial Literacy and Education Commission and the President’s Advisory Council on Financial Literacy?
Senator Inouye asked this detailed question of Secretary Geithner because he is strongly concerned about the (extremely poor) economic literacy of the American people – so concerned that he wants to make sure the newly proposed Consumer Financial Protection Agency properly coordinates with the President’s Advisory Council on Financial Literacy and the already extant (though apparently not yet hugely successful) Financial Literacy and Education Commission.
Sen. Inouye, however, has no interest in the extremely poor political literacy of the American people. This is why he did not ask Secretary Geithner the following question: “The American people, Mr. Secretary, lack basic political literacy. Without a sufficient understanding of politics and public choice, individuals cannot appropriately manage their government, evaluate politicians, successfully distinguish statesmen from demagogues, or even begin to stop us from mortgaging our descendants’ futures by massively expanding our borrowing against future earnings. Mr. Secretary, the proposal indicates that no Taxpayer Financial Protection Agency is being created to provide important political educational information. How can we ensure that American voters remain in the dark about the nature of what we do here?”