Exposing the Dark Side of the Personal Finance Industry
Helaine Olen is a freelance journalist who has been interviewed on countless talk shows and radio stations on the topic of this book, which apparently caused quite a furor. The book is a call to action more than anything, because while it debunks the advice offered by most personal finance gurus of recent years, it certainly does not provide any answers to our problems. Olen highlights that the most important aspects of the financial services industry go on behind the scenes and thus don’t make the headlines.
The book’s main point is that none of our nation’s economic problems are going to be solved on an individual level, but must be addressed on a national level, something I believe most of us were already aware of. In arriving at that point, Olen accuses personal finance gurus of talking out both sides of their mouths as they played into our sense of personal guilt and shame over going bankrupt, losing our houses, running up credit card debt, and offered us false reassurances and empty empowerment as they personally benefitted from our desperate need to believe in those promises.
Olen takes on many famous and popular gurus such as Suze Orman, David Bach, Robert Kiyosaki, devoting entire chapters in the book to each, while supporting a few more traditional personal finance experts such as Sylvia Porter, Liz Weston, and Jane Bryant Quinn. Olen points out that while the gurus’ fame grew to cultish heights, many of the more prescient financial experts’ warnings were ignored, such as Notre Dame Professor Teresa Ghilarducci, who defended traditional pensions against the onslaught of 401K plans and whose name is hardly a household word. Olen’s evaluations are fair (and often hilarious!), presenting both the positive and negative aspects of each person’s approach. Olen’s main beef with the gurus is that they tried to demonize debt, make it seem like a personal failure, when it is actually due to a failure of the system, which needs to change.
The author devotes a chapter to the financial literacy movement, which many have held up as a solution but which she attacks as an unscrupulous attempt to skirt the main problem. On pg 217, she states “If the financial services industry were truly interested in promoting financial literacy, they would offer up products that are easy to understand…” In fact, Olen states, “an educated consumer is, for many firms, their worst customer” (p 216). Olen goes on to describe how many companies refer to their customers as goldfish or deadbeats based on the potential profits to be made from them.
Olen doesn’t mince words when it comes to the mess we’re in, and even worse, what is coming. She very baldly states that as individuals there is absolutely nothing we can do to fix our financial situation because the systems we are depending on are unpredictable, unregulated and unfair. Our only hope, according to Olen, is to unite, protest, and demand that the government provide us with a saner solution. If we belong to the lucky few who don’t have any problems, we cannot turn our heads and walk away—it is all our problem. As George Costanza said in a Seinfeld episode “You know, we’re living in a society!” and if we go down, we’re all going down together.
ISBN 13: 978-159184-489-1 (cloth)
292 pages; $27.95