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Florida Governor Signs Financial Literacy Bill

Here is a summary of the recent Florida Financial Literacy announcement as I understand it,

‘On March 22, 2022, Florida Gov. Ron DeSantis signed Senate Bill 1054, titled the Dorothy L. Hukill Financial Literacy Act, which will require high school students to take a financial literacy course to receive a standard high school diploma.

The legislation will officially become a graduation requirement for students who enter high school in the 2023-24 school year, and will not affect students currently enrolled in high school.

“Financial literacy is an important life skill for a student to have,” said DeSantis. “Ensuring our students have the skills to manage their finances – and perhaps one day own a business – will pay dividends for our state. I am proud to sign this bill to support the future of Florida’s students and ultimately their families and communities.”

Students will be required to earn one-half credit in personal financial literacy and money management, including instruction on types of bank accounts, credit scores, taxes and managing debt.’

During my career in banking and financial services, I spent over 2 decades seeking solutions to our national intellectual deficit in the area of personal economic and financial literacy.

Much of what I learned relates to relevancy. Young people who grew up in a household where Amscot was the financial provider of choice won’t relate to traditional banks.  And, a young person with no job and no viable prospects for a future career which will generate a reliable income stream isn’t a good candidate for learning about bank accounts, credit scores, etc.

What I found in my practical research was that the very best solution to engaging students – probably beginning at middle school, and certainly at the high school level – involves thoughtful inclusion of economic concepts into the social studies curriculum.

Virtually everything in the history of mankind involves an economic component which can be carefully woven into the history itself.

The feudal system, which flourished in Europe until about 1500, continues to exist in the U.S. and other nations, disguised by new labels and promoted by clever marketing schemes.

Then, there was slavery. The underlying reason for the extraordinary prosperity of plantation owners in the southern U.S. states producing cotton, tobacco, rice, and sugar wasn’t due to their intelligence: it was completely due to slave labor.

Today, we have the overarching issue of student debt. Those who have been educated and informed about ‘opportunity costs’ are (at least) inoculated against the commissioned charlatans who offer promises of obscene salaries for completion of certain certificate or degree programs — with no real supporting facts – “just sign on the dotted line and you will never regret it”.

Today, we have a financial sector (“Wall Street”) which extracts tremendous costs out of each and every financial transaction. For virtually no value-added, an investment bank transaction takes at least 25% off the top, providing immediate (and arguably excessive) financial rewards to certain economic pirates — analysts, associates and managing directors — while adding zero benefit to our overall economy.

The recent ‘Great Recession’ (2007 – 2009) was enabled by a broad contingent of economically illiterate consumers who were duped by an equally inept cohort of financially and economically illiterate brokers. The common theme:  A relatively small group of mathematical practitioners – economic pirates — who created theoretical models which proved to be defective in practice.

The current frenzy centered on Cryptocurrency is likely another economic trap conjured up by economic pirates.  The underground economy has been somewhat stifled by a 1969 decision of the U.S. Treasury to discontinue $500 and $1,000 bills. Can you just imagine an illicit $500,000 cash transaction conducted using $100 bills?  Laundered money, converted into cryptocurrency, is the perfect medium through which to consummate the transaction.  Drugs? Weapons? Real Estate? The sky is the limit.

Best I can tell, nothing in the Florida bill addresses the basic issues which American adults need to be aware of.  A good understanding of fundamental economic principles is the foundation of a comprehensive financial and economic education, and I don’t think those concepts are imbedded anywhere in this Florida legislation.