Fixed: How Personal Finance Is Broken and How to Make It Work for Everyone, by John Y. Campbell and Tarun Ramadorai, is an argument for better regulation and education around personal finance. The authors explain how interest rates, credit cycles, and monetary policy shape the lives of households, but increasing complexity makes decision making for individuals more difficult, sometimes with major ramifications for retirement and their savings.
Fixed offers a prescription of government regulation crossed with better consumer advocacy to help individuals start saving, investing, and insuring themselves in case of major emergencies. One of the authors’ strongest arguments centers around financial education in schools, integrated in the math curriculum. While a number of states have already installed mandates for personal finance in the classroom, many more have not, and some of the mandates are rather weak and ineffective.
Another strong argument centers around language clarity in contracts and agreements, particularly around borrowing and saving. Oftentimes, the consumer is unaware of just what the fine print really means and in some instances it can have significant ramifications. Simpler, clearer contract language that is more consumer friendly will help.
While I disagree with some of the authors’ specific regulatory reforms and desires for increased government regulation in general, the ideas of improved clarity and increased personal finance (and dare I say, better teaching of math) in classrooms make for sensible reforms to help individuals better understand how cash, and everything that goes with it, rules everything around us whether we want it to or not.
MY RATING: 4
