Over the course of the past month Professor Lauren Willis from Loyola-Los Angeles (who will be visiting at Harvard 2013-2014) has been blogging up a storm at Credit Slips about consumer financial education--not much value in it, she concludes. Mediocre financial education may make folks overconfident and even good financial education can quickly become dated in the fast-moving world consumer financial products and their savvy marketers. Nor do "nudges" have the welfare enhancing impact their designers had hoped to see.
I had the opportunity to interview Lauren as part of my ABI Resident Scholar gig. You can listen to the podcast here. It's rather long even after editing but I think it's worth the time to listen to an insightful run-down on the problems of consumer financial education and non-regulatory actions that can help folks from getting into a never-ending cycle of debt. A bit of a surprise to me--social investments in pre-natal care and early childhood education help develop "executive function" may have more long-term bang for the buck than regulation. These sorts of programs can do more than a perfunctory high school class and better disclosures to develop the ability to defer gratification in the face of financial need and incessent (and misleading) advertising for expensive financial products.
And given the recent VAP discussions, I'd also like to point folks to an earlier interview I did with Pamela Foohey, a VAP at the University of Illinois College of Law. Pamela and I discussed her soon-to-be-published piece on Chapter 11's of religious organizations. Turns out that such organizations have effectively used used Chapter 11 both to preseve equity in their real estate and continue to provide a community-center(ed)(ing) place of worship. Foohey concludes that the "placedness" of some entities makes a purely economic analysis of the application of bankruptcy law incomplete.