Summary of "Why this former banking regulator is writing kids books" The Indicator from Planet Money
Release Date: November 12, 2024
Host/Author: NPR

Introduction

In the November 12, 2024 episode of The Indicator from Planet Money, NPR delves into an intriguing crossover between financial regulation and children's literature. The episode, titled "Why this former banking regulator is writing kids books," explores how Sheila Baer, the 19th chair of the Federal Deposit Insurance Corporation (FDIC), leverages storytelling to enhance financial literacy among young generations.

Sheila Baer: From Financial Regulator to Children's Author

Sheila Baer is renowned for her pivotal role during the 2008 financial crisis, where she worked tirelessly to stabilize the financial system. However, beyond her regulatory accomplishments, Baer embarked on a unique mission: writing children's books aimed at instilling financial wisdom from an early age.

Quote:
Sheila Baer (00:39): "Sheila Baer, yes. The towering figure who was working to keep the financial system running during the great financial crisis around 2008."

Early Lessons in Finances

Baer's journey into financial literacy began in her childhood. A formative experience at a bank visit with her father left a lasting impression.

Quote:
Sheila Baer (01:42): "There's no money in the bank."

This early revelation taught her that banks do not physically hold all deposited funds, sparking a lifelong interest in understanding and educating others about the intricacies of money management.

Identifying the Gap in Financial Education

During her tenure at the Treasury and later at the FDIC, Baer observed a significant gap in financial education for children. She noted that existing resources were either geared towards older students or were insufficiently comprehensive for younger audiences. Additionally, she recognized that many adults themselves lacked a solid understanding of financial principles, hindering their ability to teach their children effectively.

Quote:
Sheila Baer (02:23): "There isn't that much information for elementary school children... and also a big problem was the adults didn't understand it."

The Power of Storytelling in Financial Education

Motivated by her own experiences as a parent, Baer turned to picture books as an effective medium to convey financial concepts. She believed that engaging stories could impart essential lessons not only to children but also to their parents who read alongside them.

Quote:
Sheila Baer (02:50): "And I thought what a wonderful medium to impart financial information to the children, but the parents as well, because the parents read those books with the kids."

"Rock, Brock and the Savings Shock": A Case Study

Baer's first book, "Rock, Brock and the Savings Shock," serves as an exemplary model of her educational approach. The narrative follows twin brothers, Rock and Brock, who receive a savings matching program from their grandfather. While Rock opts to spend his money, Brock chooses to save, ultimately amassing $512. This story highlights the benefits of saving and the power of compound interest.

Quote:
Waylon (03:31): "It can be brutal. And that's the kind of lesson Sheila was trying to teach people, both through these kids books, but also in her day job."

Addressing Predatory Lending Practices

Baer's regulatory work at the FDIC involved confronting predatory lending practices that disproportionately affected low-income and minority communities. She exposed how certain loan products were designed to trap borrowers into cycles of refinancing with escalating payments, contributing to the subprime mortgage crisis.

Quote:
Sheila Baer (04:55): "We helped a lot of people keep their homes. We did. So I don't want to say it was all for naught, but there were millions more who lost their home, who I think with a more concerted effort could have been saved."

The Ineffectiveness of Traditional Financial Literacy Programs

Baer acknowledges the challenges faced by conventional financial literacy initiatives, which often fail to leave a lasting impact. Studies indicate that such programs do not significantly improve financial behaviors, primarily because the information is not retained effectively.

Quote:
Darian (05:46): "Like, people don't retain the information. Right."

Baer's Approach to Sustainable Financial Education

To overcome the shortcomings of traditional methods, Baer emphasizes the importance of repetitive and engaging content that children can revisit multiple times. She argues that well-crafted picture books can reinforce fundamental financial principles, such as the benefits of saving and the dangers of impulsive spending.

Quote:
Sheila Baer (06:03): "I think one of the reasons I like picture books is because my experience with my own children... a child, when they're young, will read it over and over and over again."

"Princess Persephone Loses the Castle": Teaching Skepticism

Another of Baer's notable works, "Princess Persephone Loses the Castle," exemplifies her focus on cultivating a healthy sense of skepticism. The story narrates how Princess Persephone is deceived by a door-to-door salesman, Aluminum Jim, who offers a loan with deceptive terms. Through this narrative, Baer teaches children to critically evaluate financial offers and recognize red flags associated with predatory practices.

Quote:
Waylon (07:30): "Knowing when to have a healthy sense of skepticism is the theme of another one of Sheila's kids books, Princess Persephone Loses the Castle."

Engaging the Next Generation

Baer's innovative approach combines her regulatory expertise with creative storytelling to empower children with the knowledge to navigate complex financial landscapes. By embedding essential financial lessons within engaging narratives, she ensures that these crucial concepts resonate with young minds and are retained over time.

Quote:
Sheila Baer (06:42): "Students should be learning about how just saving $10 a month... that's the kinds of lessons they should be learning."

Conclusion: A Multifaceted Impact

Sheila Baer's transition from a high-ranking financial regulator to a children's author underscores the multifaceted strategies required to address financial illiteracy. Through her books, she not only imparts critical financial knowledge to children but also indirectly educates parents, fostering a more financially savvy future generation.

Produced by Angel Carreras with engineering by Gilly Moon. Fact-checked by Sarah Juarez. Edited by Paddy Hirsch and Kate Concaden. The Indicator is a production of NPR.