Would Better Math Education Have Prevented Our Financial Crisis?
Someone recently asked me whether better math education would have prevented or mitigated our current financial crisis. My immediate response was, “Unfortunately, no!” Our current financial woes are due to so many complex, interacting factors, including (just to name a few) lack of regulatory oversight and regulations that only applied to part of the financial ecosystem, corporations’ insatiable need to maximize quarterly earnings, the very human tendencies of some people to get ahead by taking advantage of others, and the very human tendencies of many people to believe in things that are “too good to be true” (such as housing prices that can’t go down, and mortgages that people can’t pay for).
Ignoring the Math of the Financial Crisis
Certainly we can now all say “they just didn’t do the math”, and include in that sweeping condemnation the lenders who made loans to people who couldn’t possibly pay them back, as well as the borrowers who signed up for payments that overwhelmed their income. But in this case, I’m afraid it was more a problem of them CHOOSING not to “do the math” than of them not being ABLE to do it.
Being able to do the math can lead to success though, just ask Warren Buffet.