Document Type

Article

Publication Date

1-2011

Abstract

This year, the Canadians- through their government-convened Task Force on Financial Literacy - have proudly produced, "Canadians and their Money: Building a Brighter Financial Future." Armed with 30 recommendations, its most dramatic innovation is to recommend the creation of a Financial Literacy Leader. I have been asked to provide an American perspective on this report specifically and the broader agenda of "financial literacy" more generally as a consumer welfare intervention. Let me start by acknowledging the critiques of the Canadian Task Force. For example, my Canadian colleague, Saul Schwartz, has already drafted a compelling analysis of the political economy behind the report and presented a devastating juxtaposition of the testimony made available to the task force with the summary and syntheses in the report itself. It is not flattering. I also recognize the dizzying array of Canadian government and community institutions already in existence, including the Financial Education Institute of Canada, the Financial Consumer Agency of Canada, the Financial Planning Standards Council, the Investor Education Fund, and the National Advisory Council. That said, I come to praise the report, not to bury it. For it is only in contrast to the demoralizing state of affairs in the United States that one can appreciate just how far ahead the Canadians actually are. Thus, the comparative analysis is that the Canadians' glass is half full. To be sure, there are still glaring deficiencies on both sides of the border that warrant further comment. I propose addressing those deficiencies in part through a call to arms for greater financial castigation rather than financial literacy education.

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