Today, NPR News visited Garret Capping’s US government class to hear how the financial crisis is being addressed in the government’s schools.
Capping asked his students, “In a nutshell, what would you say caused the financial crisis that we have today?”
Three students parroted the party line:
Spencer: “Corporate greed.”
Alison: “Adjustable rate mortgages and the housing crisis.”
Sam: “Subprime mortgages.”
Capping: “Subprime mortgages. Good. Alright, so those are pretty good answers”
The discussion then turned to the role of securities, specifically credit default swaps.
Capping: “But these investors got nervous. So what they do to cover their bets is something called a credit default swap. But they didn’t take enough money — they didn’t reserve enough money to actually cover if those things failed. Now, why did they not have to do that?”
Kate (a student): “Ok. It was because that they, uh … Oh, it’s because it wasn’t technically an insurance policy. It was called, you know, a credit default swap. And so it wasn’t, you know, part of, like, the government’s job to make sure that it was regulated.”
Capping: “Excellent. Good answer. Right. What happens is — because we’re not calling it insurance, we’re calling it a credit default swap — it’s not regulated by the government. So these companies don’t actually need to set aside this money to sure they can cover their bet.”
Hmmm. Teacher, You’re leading the witness.
No mention of the FED. And the correct answer is always the feds and more regulations.
By the way, these students are seniors and will soon be voters. Scary.



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Smart people like to point out that the root of the current crisis is the Federal Reserve. However, I think the root of the problem is actually several steps further back — namely, government schools. They really are *that* bad.
Brent,
they are really that good from the viewpoint of the state. In fact this is the one area where I can say without hesitation that the state has achieved and surpassed its own expectations. What better place is there to inculcate the new American Values of consumption, debt and docility than America’s classrooms? Throw in some mindless entertainment in the evening hours which often reinforces subservience to the state and it is amazing that there is any dissent in this country at all. America, freedom hardly knew you.
And what have you guys been doing to spread the TRUTH behind this debacle?
This is the crucial battle of ideas. Have you done your part?
For some further information, both John Taylor Gatto (The Underground History of American Education, et al.) and Alfie Kohn (The Homework Myth, et al.) have some interesting things to say on public education as an overall topic. Finally, Bryan Caplan (The Myth of the Rational Voter) presents an interesting perspective on the interaction between uninformed economic superstition and increasingly democratic (versus representative) public choice.
If you think it can’t get worse. Don’t despair our politicians will just outcast the worst expectations. For those able to read german:
http://www.n-tv.de/Koehler_zur_Finanzkrise_Bretton_Woods_II_noetig/111020085412/1036380.html
and
http://www.n-tv.de/Merkel_und_Sarkozy_einig_Umgestaltung_der_Maerkte/111020084514/1036432.html
Now it’s Germany and France, well one would expect them to do that kind of suicide before the British and Americans, but just wait and see. We can outdoe any madness thown at us…..
NO! It’s GREAT! I frankly think there’s hope. I find it on the contrary pretty good. Excuse me but I’m less severe perhaps because in old Europe I’m afraid you would have had only one answer: “it’s America’s fault.” And that doesn’t leave much hope at all.
I mean… There’s not much intelligence missing before seniors start to calculate that mortgage backed securities can only fail so much and that the LEVERAGE is the problem that makes that fault so vicious… less the fault itself.
Because alos there’s not much research needed to know where the leverage comes from: FRB, FED!
I’m a teacher and this year I’m subbing in public schools. (I think I was blacklisted after I pointed out to my school’s administration last year that a rule requiring students to stand for the Pledge of Allegiance is unconstitutional.) I’ve read Alfie Kohn (who believes in Democratic–I think he means “egalitarian”–schools) , but Kohn’s major problem is that he supports the National Education Association (which even Jon Stewart calls a “voracious, insatiable money pit”) and doesn’t realize the NEA–the nation’s largest union–will block piecemeal attempts to reform the system. Kohn also doesn’t want public schools to compete with private schools.
And that’s the crux of the problem: no competition. Public schools are “enclaves of totalitarianism” and state machines of propaganda.
I’m not surprised to the bias in this article. The majority of teachers in my area are marxists, socialists, even communists. (The teacher pay grid is decidedly socialist as it pays everyone the same, even those with science degrees and PE degrees.) Most are registered Democrats. I see the bias everyday as a sub. One of my colleagues stated that after the Palin pick (she’s an Obama supporter) that she just needed to “teacher harder”. And those who are not liberal still believe in the union (and its socialistic tendencies) and do not want competition in education.
When I was in school, there was no real discussion or coverage about the Federal Reserve or fiat money or of our empire. The same remains true today. The liberal elite blame everything on “greed” and private enterprise without even stopping to examine their assumptions or the role played by corporatism, the Federal Reserve, our monetary system, and government dysfunction.
Today’s public school students have difficulty doing basic math, reading, thinking critically. They’ve been trained to submit, not to question authority, and they will someday make the perfect “citizens”. And this will continue as long as government has a monopoly on education.
I’m a teacher and this year I’m subbing in public schools. (I think I was blacklisted after I pointed out to my school’s administration last year that a rule requiring students to stand for the Pledge of Allegiance is unconstitutional.) I’ve read Alfie Kohn (who believes in Democratic–I think he means “egalitarian”–schools) , but Kohn’s major problem is that he supports the National Education Association (which even Jon Stewart calls a “voracious, insatiable money pit”) and doesn’t realize the NEA–the nation’s largest union–will block piecemeal attempts to reform the system. Kohn also doesn’t want public schools to compete with private schools.
And that’s the crux of the problem: no competition. Public schools are “enclaves of totalitarianism” and state machines of propaganda.
I’m not surprised to the bias in this article. The majority of teachers in my area are marxists, socialists, even communists. (The teacher pay grid is decidedly socialist as it pays everyone the same, even those with science degrees and PE degrees.) Most are registered Democrats. I see the bias everyday as a sub. One of my colleagues stated that after the Palin pick (she’s an Obama supporter) that she just needed to “teacher harder”. And those who are not liberal still believe in the union (and its socialistic tendencies) and do not want competition in education.
When I was in school, there was no real discussion or coverage about the Federal Reserve or fiat money or of our empire. The same remains true today. The liberal elite blame everything on “greed” and private enterprise without even stopping to examine their assumptions or the role played by corporatism, the Federal Reserve, our monetary system, and government dysfunction.
Today’s public school students have difficulty doing basic math, reading, thinking critically. They’ve been trained to submit, not to question authority, and they will someday make the perfect “citizens”. And this will continue as long as government has a monopoly on education.
Amen, Frank.
To anon: Yes, I teach and I research and write. Unfortunately, the government schools “teach harder” as Frank pointed out.
Think how arbitrary state, federal and other government standards are concerning well, testing and just about everything else public school. The economic questions of who, what, where, when and how are so distorted that opportunity costs cannot be known- even to the government’s top academics and money crunchers. This is where a priori reasoning in the Austrian tradition has to come into play. Public schools aid the destruction of econ calculation and cause social disconnect. The latter has to do with, for example, the fallacy of educational dictates. It is impossible to know which kid, at what time, and in what way, will benefit himself and society the most by reading the arbitrarily chosen text. The benefits the government states they want to derive from this learning control are arbitrary and unknowable as a posteriori values.
Austrian theory makes sense out of the chaos.
i am one year out of high school, and i was lucky enough to have a somewhat free market economics and government teacher. although he still taught out of the book a bit, he was still a whole lot better than the other teacher at our school, and 100 times better than this teacher as he told us that fiat money is a bad thing, which was one of the first lesson he taught.
all i can say is that public schooling sucks.
John Taylor Gatto, “The Underground History of American Education” is available for download here:
mhkeehn.tripod.com/ughoae.pdf
Fascinating reading!
Following up on useful references mentioned by Dave above, the other books are also accessible electronically (I look forward to reading them, as well):
The Homework Myth can be read at:
http://books.google.com/books?hl=en&id=tDr1oqtRD9oC&dq=%22+Homework+Myth+%22&printsec=frontcover&source=web&ots=gGWg1L8MhM&sig=K9Ac1NBwOS3LKVXdeRRcqCb57LU&sa=X&oi=book_result&resnum=6&ct=result#PPP1,M1
The Myth of the Rational Voter can be downloaded here:
http://www.cato.org/pubs/pas/pa594.pdf
Thanks, Dave
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