26 March 2013

Breastfeeding and Payday Loans

Who'd a thunk it? That breastfeeding, among other examples of prenatal and early childhood actions, would help develop "executive function," which, in turn, keeps folks from needlessly entering into onerous cycles of indebtedness. At least that's one of the contentions of Professor Lauren Willis whom I interviewed here. Professor Willis has written extensively about the efficacy (or lack thereof) of consumer financial education. Rather than presuming that more information will lead to better financial decisions by consumers, she has looked at the facts and found that it ain't necessarily so.

Well, if more information isn't the answer, what is? Many among the elites are pushing for regulatory restrictions on consumer financial products. That's one of the avenues that the Consumer Financial Protection Bureau (posts here and here) is pursuing, which is getting pushback from Senate Republicans at the behest of their corporate and financial paymasters.

But Professor Willis is less sanguine, reasoning that purveyors of permanent indebtedness are smarter than Congress (duh) and even the best of regulators, and will find work-arounds for even the best of regulatory reforms. Suggesting a surprisingly communitarian approach she believes that providing the physical and financial resources for opportunities to grow in virtue will do more to help folks than a top-down approach. The needed virtues in consumer finance are patience and self-denial, the ability to chose for one's long-term good over short-term desire. And virtues are inculcated, it turns out, even before birth and certainly within the first few years of life. Smarts can come later but wisdom can die young.

Perhaps I shouldn't have been surprised by Professor Willis's conclusions. They're consistent with what my Regent faculty colleague Lynne Kohm and others have written in the Family Restoration blog. No more than any other aspect of life can financial decision-making be considered apart from the context of human security and stability. And no more than any other institution is the family the basis of personal security and stability. Standing alone, neither maximizing economic welfare nor increasing personal autonomy are sufficient to justify the law of consumer financial indebtedness. What civil government should do about prenatal and early childhood needs may not be clear but the importance ofa addressing those needs is fundamental.

No comments:

Post a Comment