It has long been said that the financial and economic education in the public school system is far from perfect. I, as a current high school student, can vouch for that claim. From promoting crazed statist ideologies to nonsensical Keynesian beliefs, the public school system is nothing short of a tool for the state to harness power.
In school, I was taught that the Federal Reserve was created in 1913 to manage prices and employment. Never once were we taught that the Fed’s mandate did not include anything about prices and employment until the Federal Reserve Act of 1977. It is likely that this was left out of the curriculum so that it would seem that the Federal Reserve has over one hundred years of experience in these matters, thus making them the so-called experts. However, the Federal Reserve’s mandate change was nowhere close to one hundred years ago and its experience has been far from perfect. Of course, its negative track record was left out of the teaching. Never once were we shown the drastic increase in prices and inequality since the mandate change.
In fact, we were told that the free market is the cause of inequality and that government intervention is the only way to fix it. Of course, we never learned about how perverse incentives, quantitative easing, and a fiat system are the forces that cause artificial inequality. It was for the promotion of the same idea—that government is the only answer—that we never learned about the vast inequality that blossomed after the dissolution of the Bretton Woods system.
The reality is that much inequality is the result of artificially high stock market prices due to easy money policies. Speaking of the stock market, I was taught in school that a stock market on the rise depicts a strong economy. Of course, this is not necessarily true. The stock markets of the Weimar Republic and Zimbabwe skyrocketed in their respective currencies as a result of their reckless counterfeiting policies, but surely you could not argue that hyperinflation is a sign of a strong economy. In fact, you do not even need to leave the United States for evidence. Recently, the stock market was at record highs before plunging into a recession and a sovereign debt crisis. COVID-19 was merely the catalyst, for the recession was coming anyway. It is hard to argue that a grossly overextended economy is somehow a strong economy simply because stocks were going up. But it was this type of thinking that made my fellow classmates think that since stocks had started to go back up after the mid-March sell-off that everything would be fine and there would be no recession. Sure, stocks may go up in nominal terms, but certainly not in real terms for the foreseeable future. This, of course, was never mentioned by any of my economics teachers. And it is this type of thinking that keeps the state in control. If the younger generation thinks that bailouts and intervention worked, why would they not vote for it in the future?
We were told that quantitative easing was a successful policy. But how is that we then needed multiple QEs after the one following the 2008 recession? If QE1 worked so well, why are we now on QE4? Surely, the dogmatic love of quantitative easing is a sign of insanity in its very essence. In addition to quantitative easing, we also learned about tightening policies and how the government attempts to limit its debt during economic booms. However, that is simply not true. The artificial market boom that took place during the Obama presidency and the first term of the Trump administration happened as the national debt ballooned up to catastrophic heights. Where exactly was the policy of quantitative tightening? Nonexistent. These unfortunate facts for the statists and their failed doctrines were completely left out of the curriculum.
It should be clear by now that the state-run schools cannot be trusted with teaching economics. To be sure, many of the teachers are simply teaching the curriculum mandated by the state and do not want to risk losing their jobs by teaching true economics. But the reality is that the only way to fix the problem is to abolish public schooling and state-mandated standards in exchange for private education—a cheaper and more efficient solution that eliminates the monopoly on schooling. Only then will the ideals of Ludwig von Mises and Rothbard be well understood and manifest into actual policies.
