Nonprofit Says Members of Congress Lack Basic Finance, Economics Knowledge
In times when the debt crisis requires better economic understanding than ever, nearly eight in every 10 members of Congress lack education in economics or business and may not have housing market knowledge, according to findings from the Employment Policies Institute.
EPI’s “Defeat the Debt” project found that only 8.4% of the members of Congress have a degree in economics, while another 13.7% have a degree in business or accounting. Most elected officials—up to 34.8%—studied government and law, 20.9% graduated in the humanities, 11.5% in science and technology, and 4.9% in human services. (It excludes non-voting representatives, members without a college degree and 24 members who do not have “well defined” majors such as religion.)
In July the debate over the country’s $14 trillion debt “reached a fever pitch amid competing claims” about what consists of economic wisdom, EPI said. Yet these data indicate many members of Congress “might have difficulty answering” one-on-one economic questions.
And that matters, argues Michael Saltsman, research fellow at the nonprofit, which studies how government policies affect employment growth and economic development, because the debate over best solutions to the national debt, the high unemployment rate and the housing crisis still are in full swing.
Currently “competing claims about how a particular piece of legislation will impact our economy” are debated in Congress, he said, so expertise is “more important than ever.” Representatives from both parties are expected to familiarize themselves with the basics of finance and economics and to draw on the expertise of experienced professionals.
Saltsman told this publication EPI is not in the business of making recommendations as much as it is dedicated to raising awareness. The issue is imperative as Congress returns to Washington in the coming weeks. “We just wanted to point this out.”
College degrees, however, may not tell an individual’s life experience. Many corporate lawyers who specialize in finance and economics can offer qualified input on the national debate over how to use limited resources.
While history has shown examples of elected representatives “who have performed admirably” based on experience running their personal business without a formal academic background in business or economics, EPI said, by general consensus the current economic crisis, especially the unprecedented foreclosure and mortgage delinquency crisis, has shown that current developments vary significantly from historical norms.
Ways members of Congress can learn about the nation’s economic reality of the past few years may include books that focus on the current housing crisis and selecting staff that has both academic training and life experience in business and housing finance, says Saltsman. “Some of these congressmen may have that staff already, but they’re still saying things that may sound good but are not realistic financially and fiscally.”
It is important to understand the value of tradeoffs when dealing with the federal budget and even the mortgage market since unfortunately, he said, when thinking tradeoffs “everyone things in terms of getting something,” not giving something away.