Tuesday, 21 May 2013

Let's Not Forget Voluntarism

The Minneapolis Star Ledger passed on this, which is submitted BEFORE the IRS scandal broke. A  substantially different version appeared on Bloomberg Echoes last week.

Washington's budget impasse could be ameliorated if the
government would allow the ancient 
American tradition of voluntarism to again thrive.

Voluntarism means relying on voluntary action to achieve
goals. It can be evoked and coordinated by non-profit organizations, mutual
businesses, or for-profit stock corporations. When early Americans faced a
problem requiring coordinated action they did not automatically run to Washington
for aid. Instead, they studied the problem and attempted to solve it rationally.

Early Americans occasionally concluded that some level of
government (rarely federal, sometimes state, usually local) was best suited to
combat the problem. Typically, however, they believed that voluntarism was a
better option. That sometimes meant forming a for-profit corporation but in
specific areas of concern, especially insurance and banking, they sometimes
found mutualism more conducive to solving their problems. Surprisingly often,
they formed non-profit organizations (NGOs) ranging from charities to fraternal
orders to health clinics to “encouragement” associations.

The overwhelming preference for voluntary over government
problem solving is why early America has been called a corporation nation and a
nation of joiners. By relying heavily on non-profit voluntarism, Americans
essentially taxed themselves to combat social problems. They did so at a
relatively high level because they closely controlled their own efforts and could
focus on outcomes rather than inputs. If an initiative fell short of its goal,
they had strong incentives to discern why and respond accordingly.

Beginning with the New Deal, however, voluntarism began to
wane, shrinking to the point that Americans even started to bowl alone. It
survives in pockets, of course, but today many Americans confronting challenges
automatically turn to Washington for solutions.

I didn't understand why Americans today largely neglect
voluntarism until I joined an innovative start up NGO called Historians Against
Slavery (HAS). The organization exists to help the public to understand that
although the Civil War and Thirteenth Amendment ended chattel slavery, they did
not end labor coercion, which persists to this day in the form of trafficked
sex workers, under or even unpaid immigrant domestic and farm workers and
prison laborers, and other forms.

Given the importance of its cause, HAS found it easy to
attract pledges sufficient to revamp its website, establish a scholarly book
series, hold board meetings, and even plan a large conference for K-12
teachers, antislavery activists, and slavery scholars in Cincinnati this fall.
But all that effort may go for naught because the Internal Revenue Service
could take up to a year to grant it non-profit tax status and it has proven
difficult to turn pledges into actual donations without assurances of tax

An attorney we contacted about the matter said that such
delays are commonplace. Such a long delay is of course unjustifiable
technologically: a competent graduate student could create a program that would
be sufficiently astute to grant immediate non-profit status for simple
organizations like HAS. It is also unjustifiable on policy grounds: the
government should encourage voluntarism, not squelch start up NGOs by denying
them tax exempt status in their first, crucial year.

Whether the delay is a function of general government
incompetence, a la the Veterans Affairs 
disability claims backlog, or a sinister attempt to prevent a revival of
voluntarism I cannot pretend to know. I do know, however, that the nation's
budget situation would look much better if the government would allow voluntary
efforts to crowd it out instead of the other way around.

Solving the Gun Control and Budget Impasses

Washington today faces two major domestic policy issues, gun
control and the federal budget. Interestingly, reforming the former could help to
ameliorate the latter.

Early in the twenty-first century, the text of the Second
Amendment can seem inscrutable: “A well regulated Militia, being necessary to
the security of a free State, the right of the people to keep and bear Arms,
shall not be infringed.” The Founders were intelligent people. The parts about
the militia and security were intentional, not make weight or window dressing.
What in the world could the Founders have meant?

After years of studying the issue, I’ve concluded that the
Founders believed that America would always have state militias. State
governments, they believed, would always require males of military age to own a
serviceable military firearm and to train with it on muster days. They would always
modestly fine those who did not, would not, or could not train at specified

In addition to raising revenues from those fines, militia
muster provided an opportunity to monitor men on an ongoing basis. Those who
neither mustered nor paid their fines were outlaws with no Constitutional right
to own military grade weapons: muskets, bayonets, and cannons then, and
presumably assault weapons today. (They retained, however, the natural right to
bear less lethal firearms for sport and self-defense.)

The notion of a civilian militia is neither silly nor antiquated:
several nations, including Switzerland and Israel, maintain one to this day. To
the Founders, state militias were the last awful way to check tyrannical
government, hence the phrase about the security of a free state.

The notion that individual citizens acting in small,
uncoordinated units could thwart a tyrannical federal government is of course
preposterous. A well-regulated state militia, by contrast, would prove a
formidable foe, especially if the Army was disbanded, as the Founders advised.
There was no greater threat to Americans’ liberties, they believed, than a
standing army (i.e., one that remained large in peacetime, like we have had
since World War II).

Militias are not free but they cost far less than a standing
army and would not appear on the federal budget. Spending on the Marines, Air
Force, and Navy would still be substantial but the overall military budget
would be far less than projected and the American people would arguably be
safer, even from foreign invasions, remote as that threat appears. And a
particularly well-regulated militia would also allow cuts to FEMA and other
parts of the Department of Homeland Security. (It might even cut down on the
obesity problem too!)

But aye, there is the problem. Few have incentives to switch
back to a militia system and many interests would be threatened by it. So
instead of rationally debating a policy change that could scotch two snakes
with a single stick, the status quo will prevail once again … until it can’t

Tuesday, 7 May 2013

Rock Stars of Personal Finance


Now some fun stuff for the end of the school year. Rock 'n’ Roll comes to Personal Finance. Check out this cool video published by Period 5 Personal Finance Class on Dec 17, 2012. I don’t know the name of the school that published this video. If you have more information please pass it on to me.  I smile every time I watch it. This teacher really knows how to make class fun. I give her and her students 5 stars on their enthusiasm and performance. If you have a fun personal finance video that your students created and you would like to see it on this blog - drop me a line.

Thanks for Stopping By.

Thursday, 2 May 2013

Ohhh, My First Car Assignment

A Great Personal Finance Lesson Plan
for the Spring!
Ohhh My First Car is a great assignment for keeping kids interested, especially at the end of the school year when the weather warms and their thoughts drift off to summer break.  They may even be thinking about tooling around in their dream car with their best friend or girlfriend.  If you need a lesson to keep your students focused check out Ohhh My First Car.  It’s the kind of lesson that grabs kids’ attention and holds it all the way through.

It is a great lesson for any Personal Finance class, but if you happen to have a class full of rambunctious boys in the Spring this lesson will keep them engaged.

One of the more memorable moments of my teaching career was when a student of mine stopped by after school one Spring day. He had taken my Personal Finance class two years prior, and was now ready to buy his first car!  He remembered learning how to calculate car payments in the Ohhh My First Car lesson.  And now all he needed was a little help finding the on-line payment calculator.

Boy was I beaming – my students were using what I taught them in class to make informed decisions.

As we talked I got the definite feeling that someone at home was trying really hard to talk him out of buying this particular car.  I also got the feeling that he was dead set on buying his dream car.  He was going to prove to himself and his parents that he could afford that car by calculating the monthly car payments. 

He sat down at my computer.  I gave him the web address he needed to find the calculator.  He pulled it right up, entered all the necessary information, and calculated his monthly payments without a bit of help from me. Then there was a long silence while he stared at the computer screen.

In this shining moment, I did not say a thing, and after a long, silent pause he looked at me and softly said, “I guess I can’t afford that car.”  How empowering for him! He calculated the car payments, and he made an informed decision that now was not the time to buy that car.  I never felt more proud of a student in my life.  I am sure he has gone on to be very successful in life.


Ohhh My First Car is a bundle of 4 lessons designed to teach students everything they need to know about purchasing a new or used car. It is loaded with hands-on lessons that teach students the ins and outs of selecting a vehicle, finding the best interest rates, and calculating car payments.
This unit contains 4 lessons on 64 pages in 13 PDF files all for $12
Lesson 1 – Buying a New Car
In lesson 1 students will research a new car using the Internet.  They will learn how to select car style, color, and options. They will learn how to find information on: customer ratings and reviews, safety and reliability, mileage and warranty.  They will review the vehicle summary and learn the difference between MSRP Price, Invoice Price, and Smart Target Price. 

Lesson 2-Buying a Used Car
In Lesson 2 students will use the Internet to research a used car.  They will learn what certified pre-owned means. They will learn how to find information on seller’s notes, as well as consumer ratings and reviews, safety and reliability, mileage and warranty.  They will learn to research the car’s history including, accidents, recalls and service records. To help determine if they are paying a fair price for the vehicle they will learn to use Kelly Blue Book.

Lesson 3 – Finding the Best Interest Rates
In lesson 3 students will use the Internet to research interest rates.  They will learn how to find a loan from a local bank or credit union that offers the lowest interest rate with the least amount of fees and conditions for the car they selected.
Lesson 4 – Calculating Car Payments
In lesson 4 students use the Internet to learn how to calculate monthly car payments based on the price of the car they chose, and the best interest rates they found in lesson 3. They also learn how to gather additional information by reading the amortization table. By completing this lesson students will learn that the price of the car, the interest rate, and the number of years taken to pay off the car loan all come into play in determining their monthly car payment, as well as the amount of interest paid on the loan.  They will quickly see that loans are not free.
*This unit is aligned with National Core standards for Personal Finance.
*It offers options to make the lessons within it easier or more challenging.
*Discussion questions for each lesson are included in the teacher notes.
*Each lesson is packed with great questions, as well as sample answers.
*Detailed student directions and teacher notes are included.
Thanks for Stopping By!