OhioNews Bureau: Ohio Treasurer Richard Cordray, a Democrat approaching his first year in office, has acknowledged in a published report what others, especially new Gov. Ted Strickland, may be unwilling to say so forcefully in pubic these days, namely, that many Buckeye families are now in a financial crisis.
Cordray, a candidate who surfed into office last year with new governor Strickland and other Democratic candidates atop a wave of dissatisfaction with 16 years of Republican rule, is using the tools of his office, which generally pale in power or popularity with those of governor or attorney general, to set up a first-of-its kind, interactive financial-literacy Website called Your Money Now.
Depending on whether you are hind-sighted or fore-sited will determine whether Cordray's cool, informative and playful plan is defensive or proactive.
Ohio, the nation’s 7th most populous state whose rich history of being home to numerous muscle-bound industrial giants is the worse for wear due to years of powerful body blows delivered to it in the new era of globalization and job out-sourcing, now finds itself listed among leaders in various categories of economic ignominy it would rather not be a leader in.
IS OHIO’S FINANCIAL EDUCATION PLAN TOO LATE OR JUST IN TIME?
Cordray and new Republican State Auditor Mary Taylor share two important things in common: they both were elected to their offices last year, and both have avoided the political potholes that have already sent their elected-office classmates, like Gov. Strickland, Attorney General Marc Dann and Secretary of State Jennifer Brunner, off roading, inflicting some serious dings and dents to their pubic vehicles and muddying their reputations along the way.
In a sheer contest of gray matter, Cordray, who first gained fame years ago as an undefeated 5-time champion on the Jeopardy TV show, is the odds on favorite to produce the right answer in the fastest time. But if the maelstrom of ill economic winds blowing across Ohio’s landscape could be abated by a brainiac like Cordray, the state’s future would be clear and sunny. But economic forecasters call for fewer cumulus clouds and more nimbus clouds.
"Ohioans are suffering through some tough economic times right now. Foreclosures are at their highest point since the Depression, saving rates are at their lowest level, and credit card debt and bankruptcies are breaking records. Ohioans are facing increasing personal financial challenges and risks from predatory practices. Financial resources are pulled about as tight as they can go for many Ohio families, and things are starting to give." [Cordray, Timesreporter]
But help may be on the way. The key question remains, is it too late or just in time? A bill passed by Ohio lawmakers last year requires all high school students, starting in 2010, receive personal finance education before they graduate. Working with educators and school and community librarians, Cordray said:
"What we’re trying to do is to get started, to push school districts to get a framework established. We want to put something in place now so that we do not miss the next crop of students before the requirement becomes mandatory." [Cordray, Timesreporter]
Describing his free, interactive site as neutral, not trying to sell anything or coming from a special commercial point of view, Cordray says the new site – which dresses up financial education in uniforms of professional football teams and calls questions like they were plays in a game – maybe the only formal learning opportunity on the subject of personal finance Ohio students receive in their K-12 curriculum. Your Money Now says it’s a "fun way to teach the importance of effective money management, budgeting, borrowing, and sensible use of credit."
How sad and misguided is it that an education in Ohio does not adequately prepare a kid from being a responsible adult, especially in areas of money and its management? This should make everyone wonder what kids are being taught in Ohio schools, and what taxpayer dollars are being spent on if they’re not being taught how to analyze, evaluate, and then combat, by thinking critically and understanding when an a deal is too good to be true, the commercial predators who await them when they step onto the real playing field of life.
Maybe reading ought to be taught by plowing through an insurance, credit card or mortgage-lending contract in 1st grade, so by the time the kids who do stay in school long enough to graduate and are turned out into the world as young adults won’t be left as naïve bumpkins ready to be led to the slaughter by ruthless salespeople working for devious financial product sellers whose complex contracts overwhelm and bamboozle financially illiterate buyers whose emotion easily dominate their reason.
IS OHIO, AMERICA THE WORLD’S CASH COW?
The answer to that question is revealed in the call to commercial arms that goes out from every village and hamlet this time of year. With the holiday season upon us again, every message, every news story, every cultural cue is for Americans, young, old, rich, poor, to sally forth and spend, spend, spend.
Black Friday, so named because it represents the day when many a retailer crosses over into commercial profitability for the year, has turned into a yearly commercial D-Day. It’s a time when everyone is to take their paychecks, their check books and their credit cards and run not walk to a retailer and buy, buy, buy. Buying is encouraged throughout the culture as a show to the world that Americans value buying over saving at all costs, even if their future retirement plans are sacrificed in the trade out between today and the future.
Not spending, like not supporting the troops wherever they may be, is translated into not being a good, patriotic American. Your personal bottom line should be sacrificed to expand the top line of world retail behemoths like Wal-Mart and others who turned each of us into cash cows, sending the cream of our crops to China and elsewhere where their profits are maximized. Even in the face of record-high fuel prices, which are likely to continue rising, and a plummeting dollar, whose purchasing power is dwindling by the day, Americans are told to squeal for a deal then peel their car to the local shopping mall and rush the doors as if their life depending on snatching what lies inside.
Aptly noted in the Times’ article on whether the wolf of recession at the door will wait a while longer to pounce or just bust it in now is the lemming-like instinct, bread into Americans from the earliest of ages, to buy for buying sake. As Cordray sadly noted about Ohio, personal bankruptcies are at an all time high, savings rates are at an all time low, and the easy availability of credit is aiding and betting the drive to buy.
For a contrarian perspective about why the American model of credit is not finding easy traction in Europe, this article form International Herald Tribune gives voice to why many EU have far tough regulations when it comes to personal access to credit and deficit spending by countries than here in the States. As with health care, social diversity and democracy, maybe we can learn something from them.
Market watchers say that a fateful day of financial reckoning is coming and that consumeroids must either "grow thrifty" or be swallowed up by the sea of debt they’ve created for themselves. As the world’s cash cow, Americans have been buying staggering quantities of goods from overseas using money lent by foreigners, who bank on American consumers keeping them in business. The Times’ article on looming recession says Asian central banks have taken these winnings and "parked them back in the United States, buying up Treasury bills, stocks and property. In so doing, they have kept American interest rates low and the dollar stronger, ensuring that consumers have the wherewithal to keep buying."
It said cheap credit has "unleashed a wave of mortgages with exotically lenient terms, such as interest-only payments and no money down...That allowed buyers to take on more expensive homes than they could have otherwise afforded," adding that "home values rose much the way dot-com stocks had a decade earlier, banks offered loans and no-fuss refinancing that allowed homeowners to turn increased value into money. From 2004 to 2006, Americans took more than $800 billion a year out of their homes, according to most estimates."
The Times’ Op-Ed economic columnist Paul Krugman, pointing to a recent Gallup Company Poll titled "Americans’ Economic Pessimism Reaches Record High" observes that whatever good economic news there is, and Ohio hasn’t had much to say in this area recently, hasn’t translated into gains for most working Americans. The author of The Conscience of a Liberal, Krugman says of our current economic demons:
"Today, by contrast, wage gains for most workers are being swallowed by inflation. In fact, the reality for lower- and middle-income workers may be worse than the official statistics say, because the prices of necessities like food, transportation and medical care are rising considerably faster than the Consumer Price Index as a whole. One striking statistic: the cost of a traditional Thanksgiving turkey dinner was 11 percent higher this year than last year."
So while Cordray is doing what he can as State Treasurer to give the gift of learning to Ohioans of all ages who want to arm themselves with information that can keep their money in their own pocket, the party going forward may not be as inviting and fun filled as the parties of days gone by when jobs were plentiful, education was everyone birthright and the future would be brighter than the past.
John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist.
He now serves as the OhioNews Bureau Chief for ePluribus Media Journal.