When people hear the term economics they often think of graphs and a very confusing course they took in high school or college. But is that really what it is? We sit down with Dr. Jim Charkins, who likely cares more about economics and economics instruction than anyone we've met. He is the Economics Professor Emeritus and Director for Economics Education, California State University, San Bernardino, serves on many boards including the California Jump$tart Coalition, CCEE and California Association of School Economics Teachers. He is thoughtful and funny and will give you a whole new appreciation of (and possibly even love for) economics - and why it is so vital to start teaching it as early as kindergarten.
When people hear the term economics they often think of graphs and a very confusing course they took in high school or college. But is that really what it is? We sit down with Dr. Jim Charkins, who likely cares more about economics and economics instruction than anyone we've met. He is the Economics Professor Emeritus and Director for Economics Education, California State University, San Bernardino, serves on many boards including the California Jump$tart Coalition, CCEE and California Association of School Economics Teachers. He is thoughtful and funny and will give you a whole new appreciation of (and possibly even love for) economics - and why it is so vital to start teaching it as early as kindergarten.
[inaudible] Welcome to Talk Wealth To Me, a safe space podcast, where we chat about anything and everything related to personal finance. The information contained in this podcast is for educational and entertainment purposes only. It does not constitute as accounting, legal tax or other professional advice.
Chase Peckham:Hello, and welcome To another edition of Talk Wealth to Me today, we sit down with Dr. Jim Charkins. He is the executive director of the California council on economic education and professor of economics emeritus at the California State university, San Bernardino. His bio is vast, but his passion for teaching kids, basic economics, real life economics and personal financial Skills is really unmatched.
Felipe Arevalo:Yeah, we're definitely not talking GDP and not doing charts during this episode so if that's the part of economics like myself. You struggled with the stay tuned. This is a different take on Econ.
Chase Peckham:Dr. Jim check-ins. It's so exciting to be here. with you today. I've had the privilege of meeting you a few times. Only through zoom. I am a new member of the California jumpstart coalition. Philippe was just talking before we hit the record button that when I took economics in college, I was scared to death of it. Um, and I was always scared to death of it because I wasn't very good. I didn't think at math. Um, and I think I was just scared of the academia part of it, the, the, the academic terms, what, for whatever reason, I didn't feel like I understood it very well, but you have made the case in all the different things that I've read about you, that economics can be so simplified. Uh, and so understandable. Give us a idea of what got you interested in, in economics and your background and how you are leading the charge, uh, in giving these principles and educating our youth, that if they use the economic principles, as simple as they can be, uh, they, they're going to be very successful human beings.
Dr. Jim Charkins:Well, thanks, chase. It's great to be here and I'm actually very excited about this discussion. I think it's going to be a lot of fun. Um, I have to tell you a couple of things about me and economics. First of all, I was, uh, I was an English major in college and the English department. Wasn't recognizing my obvious literary skills. In other words, I wasn't getting great grades. So, uh, so I thought, all right, I've got to change my major. Um, and, uh, I was thinking about it and I was thinking, well, uh, I want a major, um, where the teachers are really outstanding. That was, that was my major criteria. And it turns out that people said, Oh, the econ department is great. Uh, so I said, all right, I want something with no math. So I'll go into economics. And that tells you how much I knew about economics. And it turned out, it just turned out to be something. And about 10 years after I got my PhD in economics, I kind of figured out what it was and why it's so essential that we all have it and that, uh, we start teaching it. In the first grade, the major thing to recognize is that while economics is an academic discipline and can be incredibly theoretical, uh, it's so much more than that. It's, it's, it's a reasoning skill. It's, it's a gift that we can give our students. If we can get our students to start asking the right questions, to start thinking about their lives in terms of their goals, uh, and the resources which they control, which is them, you know, let's get the basic message across. When we talk about, uh, economics, reading resource management. Well, what resource do every one of our kids manage every minute of every day, it's them. And so economics in the K-12 curriculum should be convincing kids that they are the most important resource they have. And they're the most important resource this nation has. Uh, and that school where they'll develop the human capital skills, knowledge, personal qualities, and experiences that are going to help them reach their goals. Uh, school is the ticket to that. So in a lot of ways, economics is a, uh, a dropout prevention program, particularly if, uh, if we started in kindergarten by helping kids recognize that they make choices. First grade, we help them recognize the choices have costs. Second grade, we help them recognize that they have alternatives by third grade, they're doing full blown benefit, cost analysis with toys and aprons and children's stories. The three little pigs is an economic story, two of the little pigs weren't willing to pay the opportunity cost to build a safe house. And in the real version they got ate up. I know that we've kind of pasted over that, but that wasn't the case.
Felipe Arevalo:I love it. Uh, and you mentioned I have a second grader. My oldest is in second grade and I don't teach him economics.
Chase Peckham:You probably do though you just don't know.
Felipe Arevalo:I'd like to say that I do. I probably do. My favorite term. And I use it all the time. All over the place is opportunity cost.
Dr. Jim Charkins:Oh look at you!
Felipe Arevalo:It's the one term in econ that has just stuck and, and, and I, and I explain it to him and he'll say, you know, Oh, I didn't get to play that video game. Well, look, buddy. Here's what happened is you decided that the time that you had, you had a certain amount of time, you decided to spend that time on a different video game, a TV, whatever it is. So that was your opportunity cost is you have this option or this option, and you took option a, so don't complain about not having time option B.
Dr. Jim Charkins:Okay. I, I think this interview is going to, uh, I'm going to, I'm going to leave and Felipe takeover,
Felipe Arevalo:That's the one economics principle that I, that I feel comfortable with.
Dr. Jim Charkins:Yes and you know what. It's such a simple term because it's the opportunity you gave up. I mean, people go through life saying opportunity cost and not knowing why the word opportunity is in there. Um, but, but I want to, I'm going to add a little nuance to talking to your second grader. It's not time they didn't spend any time they spent them.
Felipe Arevalo:Okay.
Dr. Jim Charkins:They spent their human capital doing one thing and they couldn't time is a unit of measure. You know, if, if, if you rent a, if you rent a rototiller for five hours, you don't rent five hours. You rent the rototiller. If you spend five hours of your human capital doing something, um, it's your human capital that you used not time.
Felipe Arevalo:I like it.
Dr. Jim Charkins:Well, the reason for that is we want kids to focus on themselves. We don't want to make them selfish. We don't, that's not the point. The point is that the most valuable resource they have is themselves. And so what are you doing with it?
Felipe Arevalo:I like it. I'm going to, I'm going to. I'll make that adjustment.
Chase Peckham:Well, that's, it's interesting. You say that because I think the word economics, again, being an academic word and being associated is that people just kind of cringe when they think about it. Cause they're like, Oh my God, I gotta learn all these principles. I don't understand any of it. When in reality, economics is all around us all day long. And when, when we're teaching to youth and we're talking about, we talk about the fact that finances is decision making, period, uh, and, what are you talking about? You're going to, there's a budget, your structure. There's, you know, when they think about the word budget, they get, they cringe because they're being told they can't do something. And our argument is no, no, you're actually creating something that you can do, something that you want to do. You're, you're thinking of it backwards. Um, so in reality, I didn't realize it until just now, but we're teaching economics every day to just in a much more practical, sensible sense to make sense of it all. So to speak
Felipe Arevalo:So much more micro, if I'm, if I'm then macro or because it's the individual choices and individual decision-making?
Dr. Jim Charkins:Yeah. That's the foundation. You when people, uh, when people talk about economic choices, what they really mean are financial choices, because all choices are economic choices, uh, you know, trying to decide, are you going to, uh, you're you're, you're a kid in high school. What kind of life do you want? Um, what kind of car do you want? How many kids do you want? Are you going to get married? Are you going to get married? That's that's a decision. Now, some people would say it's a financial decision and I don't disagree with that. But if you say choice, you're saying economics end of story, you know, so we have to get rid of the term economic decisions. That's a redundancy, all choices are economic choices, all choices are not financial choice.
Chase Peckham:So let me ask you maybe a dumb question, but why teach economics as a principle? I mean, why teach it, why do kids need to have it?
Dr. Jim Charkins:Well, let, let's talk about not teaching it.
Chase Peckham:Okay.
Dr. Jim Charkins:If you don't want, if you don't want your students to make informed decisions, if you don't want your students to take responsibility for their decisions, if you don't want students to think about the consequences of their decisions, then by all means don't teach economics. If on the other hand you think that those are things that it might be helpful for your kids to learn. Then by all means, do teach economics and start in kindergarten.
Chase Peckham:So why then, is it the way the, is it the principles? Is it, why do people feel like they struggle with economics? And they'll say, I don't really understand it, is it because it's, it has been in the past taught, uh, in, in a manner that is just so I guess people think complicated versus making it more practical.
Dr. Jim Charkins:The way it is taught is complicated.
Chase Peckham:Okay.
Dr. Jim Charkins:But I, when I was taking my micro principles for us in college, um, I had to learn that the marginal cost curve intersects the average variable costs at the minimal point of the average variable cost curve. That was life-changing.
Felipe Arevalo:That's the economics I remember not liking.
Dr. Jim Charkins:Yeah. I mean, we have economists as a group have so mystified it, uh, so complicated it that, uh, I, I'm not surprised people throw up, you know, that, that, uh, um, John Corbett in my intermediate macro micro course through the textbook, in the trash, in front of the, uh, instructor, I don't blame him. I wanted to I just didn't have the guts to do it.
Felipe Arevalo:textbooks are expensive.
Dr. Jim Charkins:That's right. I said to him, you know, that, uh, um, that textbook represents about four pitchers. What are you doing? But he Threw it away anyway.
Chase Peckham:So let me ask you then if, cause there's, there's a big fight all over the country, but especially in California, uh, to get personal finance in, into schools. And there are many organizations such as herself that teach personal finance and the word economics is not really, it's not used. And a lot of people believe that they're separate that they're not the same thing, but can you make the argument that they are the same thing and that they can just be, is it just a different different philosophy or a different type, of course in economics,
Dr. Jim Charkins:No. They're not the same.
Chase Peckham:Okay.
Dr. Jim Charkins:Economics is kind of the foundation. It's, it's a method of reasoning and you can't possibly teach personal finance without a basic reasoning foundation. Otherwise it's just a bunch of disconnected, uh, you know, what our credit cards and, uh, then how do you get money out of an ATM? And how do you balance your checkbook? That's just not the personal finance we ought to be teaching, but we have to start with, what are your goals? Once, once you begin to think about your goals, then you have to figure out what, uh, what kind of life, what kind of profession, uh, are going to help you achieve those goals, then what kind of skills are you going to have to have to get those kinds of jobs? And then where are you going to get those schools, uh, have those skills and that's school. So, um, th they're not the same. They compliment each other. Um, you know, if, and I've struggled with this forever, the thing that frustrates me is that some States have said, well, throw out your econ course and put in a personal finance course, because that econ course, uh, is just a bunch of graphs. Well, if the econ course is taught that way, then yes, throw it out. But if in fact we teach kids economic reasoning, um, which we teach kids the rules of the game. Um, it's hard to play a game and impossible to win if you don't know the rules. So they really need to understand how a market economy works. And the, the, the bottom line for them is you have to have skills to sell in a labor market. If you're going to survive. Um, in terms of, uh, personal finance, you don't have to worry about balancing a budget if you don't have any money, or you're not going to have any money, if you don't have any skills. So th the, the high school econ course, and, and I work with a group that's trying very hard to make this happen. Um, we want that course to be relevant to these kids. If it's not relevant to the kids, we shouldn't be teaching it. So that's why the relationship between the marginal cost curve and the average variable cost curve isn't in our course, uh, but the, uh, the importance of economic reasoning, the power of human capital, uh, and the power that improving strengthening that human capital can give you to earn an income to manage is where we start. Uh, and when we talk about budgets, a budget is probably the best example of marginal thinking. I mean, we learned, uh, that firms will optimize profits when the marginal cost curve, uh, I mean, when the, uh, uh, marginal cost curve intersects the marginal revenue curve, we want kids to understand that, uh, if you're trying to balance your finances, you're gonna have to give a little, to get a little, and that's what a budget is. Uh, and so all of the concepts that are involved in economic reasoning, particularly opportunity cost, Felipe are all in budgeting as an example of economic reasoning. And then we want them to budget their human capital. So we've taught them how to, we've taught them about budgeting money. Now, what are you going to do with you today? What are you going to do with you this week? What are you going to do with you this year? How are you going to use your human capital to achieve the goals that you have decided upon? And, you know, a lot of our kids don't know they have the right to have goals. Um, we want them to know that from kindergarten
Chase Peckham:Well, and so much of that, and this could go down a path that I didn't intend, but so much of that is from background. Uh, so much of that is, is from, you know, where they grow up, the environment that they're in. Um, how do we get it through to our students that they have opportunity regardless of where they come from. Uh, and so much of the mindset is I am where I am. My family has been where I am forever, and that's where I'm going to be. Uh, how do we get through to those kids when they're in the classroom with you for four or five hours a day, and they're at home the rest of the time.
Dr. Jim Charkins:Yeah, it's a challenge. Uh, we, we're calling, we're calling our course economics for empowerment and equity, and those could mean so many things to so many different groups, but what we mean by that is that that course, and again, you know, they're senior year in high school, it's really tough, uh, and the heroes of our society. And I know we all know this are the teachers. Um, but when we talk about human capital, um, we, I, I'm trying to convince teachers to be in, to begin every, every one of their classes with the question, how you doing? And they, the only appropriate answer to that is we're incredible hunks and hunks of human capital. Uh, and the purpose of that is to help them focus on the power that they do have, if they choose to use that proper, uh, that, that power to improve their human capital to achieve their goals. So, you know, Chase, I mean, you're right. Um, when they come from backgrounds where school is not a priority, and, you know, I've had, I've had a tremendous number of students, particularly female students who tell, uh, tell me that, um, their family is really against their going to college. Um, their family thinks they should be doing other things. And so, um, you know, the good news is that those students who are in my class or in my office have made the decision, they've recognized that education, uh, is the tool to success.
Chase Peckham:It absolutely is. And we run into that quite a bit, uh, from, from different, uh, differently not necessarily don't want them to go to college, but it's almost as if you don't know what you don't know, and you're afraid most humans, it's natural to be afraid of the unknown, uh, just as it is. It's, uh, it's, they're afraid to change, uh, change frightens people because of what it's unknown. Um, and so that's why I think it's so powerful that school, that, uh, that, that being an intern, going to summer jobs, learning different skill sets and learning about life as a whole knowledge, the whole cliche of knowledge is power is so incredibly true because it gives you more understanding of what is available to you, if you so choose to go after it. And, and that goes for not just students in school that goes for families that goes for where you want to live, that what you want to do with your life. If you want to change something, it is possible. It might be difficult. It might be painful. You know, sometimes you got to go backwards to go forwards, as you mentioned. So how, give me an example of, as you talk about the way you guys would teach economics, give me an example of how you would explain one small part in a course.
Dr. Jim Charkins:The first thing we start with is you and your human capital. And so we take out a mirror and walk around the room and ask them, what's the most important resource you have? What's the most important resources economy has and, how you doing today? Um, to get them to focus on not, not some kind of, in fact, we've discouraged testing of graphs in the course.
Felipe Arevalo:I would have loved your econ class because that was tough.
Chase Peckham:Yeah.
Dr. Jim Charkins:Yeah. The point is we, we think graphs should be taught because for some kids, they just make it all makes sense to.
Chase Peckham:Yeah.
Dr. Jim Charkins:Uh, but for some kids also, they know those graphs, but they don't understand economics. They don't understand the intuition behind it. Um, but you know, that that's, that's the simplest example. Another one though, the principle of exchange, you know, we've been hearing a lot about, uh, trade being a zero sum game. So, um, we, uh, w we, I asked my, I have three bags and I put different candies in each bag, and I asked the kids, okay, who wants to Hershey with, uh, uh, with almonds? I do. So they come up and they get a candy bar out of the bag, but it's not a Hershey with almonds. And they don't know that until they sit down. And then another one is a dark chocolate who wants dark chocolate they come up, the bag, doesn't have dark chocolate, in it has milk chocolate. And then they're all disgruntled and unhappy and ticked off. And then I say, well, what can you do about it? Well, you can trade. And suddenly everybody's better off. It's just, it's simple stuff like that, that, that, that can make this stuff make sense. Um,
Chase Peckham:Interesting. You say that we did, um, we don't get asked to do young presentations very often, but we did work with, uh, uh, I think it was a fifth grade class.
Felipe Arevalo:It was a third grade.
Chase Peckham:Third grade class. Sorry. And we did a principle of how do you teach decision-making and money? And our goal was at the beginning of the class, we offered a lollipop to every student and we were just talking about, you know, what do they want to do with their life? What we just made it very interactive. I mean, it really wasn't about personal finance until the end. And what it was is we told them, if you want to eat the lollipop, now you can, you don't have to save it. And they could, but in about halfway through the class, we asked, all right, so who, everybody who ate your lollipop. And then they raised their hand. And then we say, okay, who saved their lollipop? And then they raised their hands. So we go, all right, well, those who saved it, you get another lollipop. So for those of you who did it here, you know, we handed out the other lollipops and the other kids were like, what, why do they get another one? Just because we ate it. And we're like, no, let's see. That's the way money works. It can work for yourself is if you save it, it can work for itself. It can build upon itself and you can create something longterm. And so now those people that didn't need it, they have two lollipops to eat later. Right? So that was, that was the principle that we set. And those kids, it was incredibly funny, but it was, it wasn't just the kids that learned that lesson, the teachers and the parents who were there that were, that were they, they came up to us afterwards and said, Oh my gosh, I feel like I taught something today, Just because of a lollipop.
Dr. Jim Charkins:Well, and see the beauty of that is you made it real. You didn't give the kids they're candy, they're candy, they're a lollipop, another lollipop. And when you're doing it, that's you got to do that. So let me show you, you asked a simple way of teaching the concept.
Chase Peckham:Yes.
Dr. Jim Charkins:So this, um, I'll try and describe this. This is the decision-making apron. Um, the top pocket in this decision-making apron is goal and resource. So if you're trying to make a decision, you're going to have to figure out what's your goal, and what resource do you have to apply that goal? And when we're teaching this in elementary schools, the goal is very simple. Uh, the resource I have is me, my human capital, uh, and my goal is to have a good time this weekend. Then the next to the next row is two pockets. They say alternatives. So in the third grade, you, uh, you want to have the best birthday party you can, and your parents have told you that you can, uh, you can go to the dinosaur museum. You're a dino, you're a dinosaur nut, uh, or you can have a party at home. So those are your two alternatives. Now, what are the advantages and disadvantages of both alternatives, and I'm not going to go into them, but kids do a bang up job on, uh, the advantages disadvantages of the dinosaur museum or of the, um, or the party at home. What are the biggest things they say about the party at home? This, uh, my friends are going to mess with my stuff.
Chase Peckham:That's a disadvantage.
Dr. Jim Charkins:Yeah. All right. So now you take those two alternative in the next row, and there are two pockets. One is choice, and the is opportunity costs. So, uh, what's your choice. We're going to go to the, we're going to go to the dinosaur museum. So dinosaurs go in that pocket and what'd you give up? I gave up the party at home. Uh, those little things, you blow that, roll out, those go in that pocket. Uh, and so now you've taught third graders benefit, cost analysis. Um, you can do the same thing in middle school or high school with, uh, the Twilight series. I don't know how familiar you are with those, but, uh, kids know a lot about them. And so, uh, the question is, uh, you know, who, who am I going to decide to live with the rest of my life? Uh, Bella has to decide between Jacob or Edward, uh, what are the advantages and disadvantages? Seventh graders gave me a great list of advantages and disadvantages of both of them. Um, what do you choose? Well, uh, uh, I'm not going to be a spoiler alert, but let's assume that you choose a Jacob. What was the cost of that choice? Um, Edward now you've taught benefit cost analysis to middle school kids high. Um, what are you going to do with you after high school? And then we can talk about tariffs. Uh, we can talk about minimum wage. We can talk about things that these kids are going to be voting on. Um, and the, um, the California council for the social studies, as well as the national council for the social studies is trying to get kids to use. What's called an inquiry arc, um, where they look at different policies and they investigate who is affected by those policies who gains, who loses, uh, is there a way that the winners can compensate the losers and then engage in civil discourse? Now, I want to emphasize those two words, civil and discourse, instead of screaming at each other, uh, instead of saying, well, my brothers, uncles, sisters, mother, uh, they're th they must go and do the research and evaluate their sources, uh, to, uh, to, to discover the issues behind these policies. Not I'm right, you're wrong, but what are the issues? Does the minimum wage cause unemployment does the minimum wage take some people out of poverty and who, uh, and now we're laying it all out. We can use the apron, we can use the inquiry or, uh, to use economic reasoning, to see why people take different issues.
Chase Peckham:Yeah. And that's, that's interesting. You, you say that because when you read the news or you, you know, depending on what channel you turn on, you'll have different economists with different opinions of the way things are going or should go those types of things. And it's so hard to understand. I mean, which one is real because art we've been taught to believe that math is real, right. Obviously there is a, there is a final answer to it. It's either right or wrong. So how can so many economists have different viewpoints on how things should go?
Dr. Jim Charkins:Are you asking that question?
Chase Peckham:I'm asking that question. I'm putting you on the spot.
Dr. Jim Charkins:First, it's important to recognize that, um, uh, valid researchers should not want to support a conclusion before they've done the research. And, you know, I mean, who are we talking about? We're talking about Republicans, economists' Democrats economists.
Chase Peckham:There you go.
Dr. Jim Charkins:Uh, and so, you know, that's the other thing
Chase Peckham:That's what I really wanted to hear. I mean, you said it that simply, that's what it is. You can turn any number of the way you want to, you can skew.
Dr. Jim Charkins:Yeah. Liars figures don't lie, but liars figure.
Chase Peckham:Something like that.
Dr. Jim Charkins:But the main thing is that, uh, we, if we could get students to, to ask the right questions and that's really our goal in terms of using economic reasoning to analyze public policy, what are the questions you should be asking as opposed to what's the right answer? Uh, if we talk about minimum wage, I've mentioned a few of them. If you talk about immigration, there's not an immigration issue. There are three, four or five immigration issues. Uh, are you going to keep that mother with her kids whose lives are threatened out of this country? And are you going to keep criminals out of this country? Those have two different issues.
Chase Peckham:That's correct that's not A blanket.
Dr. Jim Charkins:No. What, what impact do immigrants legal or illegal have on the U S economy? Uh, you know, what, what did they pay taxes? Now we're starting to look at questions and now we can do some research to see what the data says, recognizing, and this is one of the most important parts of this inquiry. Our thing recognize that the probable probable biases of the sources. So the American heritage Institute says something and has some data. Okay. Well, we know that that's a conservative, uh, bias and that's okay. That doesn't mean you should throw the data out, but you should recognize where it's coming from the Brookings Institute on the other hand of has some other data, okay, well, now we know the Brookings Institute tends to be a Senator left organization. And so we won't throw their data out, but we'll recognize that there's, they're coming to it from a certain perspective. Okay. Now I'm a confused citizen. I want confuses.
Chase Peckham:Yes.
Dr. Jim Charkins:I don't want citizens who have truth. Truth gets in. Truth, gets in the way of democracy,
Chase Peckham:A hundred percent. We try to simplify it and you can tell me, I'd love to know if you think that we're on the right track. But we try to explain to people that the reason that personal finance and understanding these principles when we're talking to young people is the fact that if we all learn these common skills and we apply them to a way that works for us individually, you know, a company's goal is to what have make a profit every month. Their goal is to annually make profits. And if they don't, they go away, right? So why wouldn't we do that with our own lives? And if we all did that, and we all took that approach as a re you know, take all the social issues out of it. But if we all did that on a, on a financial level where we're all common, right? Wouldn't our economy be a better place? Wouldn't we be a better place? We want people to say, you need to, if you know these principles yourself, and then as you get married, you work when these principles with your, your, your loved one, the one that you're gonna make your life with right? Now, you're discussing these principles because what, you've got two different ideas, two different minds coming together, and now you've got to make a household work. It's hard enough to decide where you're going to spend Christmas Eve and Christmas morning, let alone your, your finances 365 days a year. Right? So discussion being honest and truthful, looking in the mirror, those kinds of things. If you can do that at an early age, you get those principles before you have acquired all these things. You're going to be your stress levels are going to be much lower than most people, by the time they're in their mid to late twenties. And I am a example of that. And I, and we give, we give people, I mean, Felipe and I both, I mean, I do what I do now because I made horrific choices as a young person, because I wanted to have fun and fit in. And, and, and I was brought up from a middle upper middle class family. I just didn't associate what my costs were ultimately going to be with the decisions I made early on. And I just didn't worry about it. And that came back to bite me so that those are the examples that we try to use with our youth that look, take whatever, take whatever you want out of this course. But the idea is, if you get these basic principles, if you understand the way these mechanics work and you make it, and you can make informed decisions, you're going to, chances are you're going to be in a much better place.
Dr. Jim Charkins:And I see you use the phrase that I really like. Um, we don't tell them that their decisions are good or bad. We would like them to make informed decisions.
Chase Peckham:Correct.
Dr. Jim Charkins:And one of the major keys to that, Felipe you've already said it is opportunity cost. What are you giving up when you make this decision? Um, and then the other one down the line is what are the consequences for you? Uh, and, and that applies to all decisions, uh, but really, uh, hit you where it hurts when you talk about financial decisions.
Chase Peckham:That's why I want to talk real quick. You made, you talked about something called money-wise, or I brought it up that money-wise teen. Um, and that is, uh, a series of videos that were like animated, that were created by, uh, I believe the organization is the California council on economic education. Is that where it came out?
Dr. Jim Charkins:Yes, yes.
Chase Peckham:And you were one of the authors on that?
Dr. Jim Charkins:The author.
Chase Peckham:The author. Okay. So it is so real life. I mean, I, as I think I mentioned before, when we started this before we started the actual interview, when I was watching those, it took me back to the decisions that young people make decisions I made through my life. And I'm telling you, I had a giant pit in my stomach in that first one, especially it just series one. And I mean, I was, Oh, it was just a young couple. They were in love. They were this, and, and the decisions that were made like the world is our oyster. It's going to be great where we're and just we're in love, right? We, what can go wrong? What's the power of love. And, Oh my gosh, the pain in my stomach that I felt just watching that. And I'm 49 years old thinking about that going, I'm like, Oh, I've never been so happy to be 49 years old that I don't have to go through that and make those decisions again. Uh, but tell me, how did those come about because they are so frank,
Dr. Jim Charkins:Well, it was the push to protect economics, um, with the, with, for the people who were saying, let's throw the economics course out and put in a personal finance course. So the goal was to combine the two, uh, to, to give teachers a way of teaching the legitimate and crucial economic principles using personal finance as examples. So the first one is all about scarcity and people hate, hate to learn about scarcity, because it says you can't have everything you want. And that's all it says that you can highfalutin if you want. But basically scarcity says you can't have everything you want. And the reason that that's actually a very helpful message for kids is because it says you can have more of what you want. If you improve your resources. And the greatest resource you have is you fool. So do you do your deal, do your due diligence, go to school, get the skills so that you can have more of what you want. And, you know, when we talk about what you want, I think people very often think that means that economists are making, making little kids selfish. That's not true at all. Um, you know, mother Theresa wanted a lot. I mean, she was really, if you think about it, a very greedy woman, uh, she wanted lots and lots of resources to help the poor. Um, so th th the fact that you want more resources to achieve your goals does not mean that, uh, you have to be a selfish individual. You could be a very altruistic individual. So we start with scarcity in that first couple refused to recognize it. Uh, the girl insists that the lady insists that they keep the air conditioning on all day, because there, her cat is an inside cat. And so they can't have the cat roaming around in the heat. Uh, and th there's decision after decision after decision that they make, uh, where they refuse to recognize scarcity. So we would like in that first one for students to recognize that you can get into a lot of trouble, if you don't recognize, uh, your financial limitations. And then the second one, they do it all right. Uh, they budget and they go through three iterations of a budget before they get there.
Chase Peckham:But that video also, even though it was getting you're right, it was better, but it was also, there was pain points in that, in that video as well. And when you talk about it, because you talk about the different iterations of the budget and the frustration that can come with, man, we thought we had it out. We thought we had the penciled in. Right. And it just didn't add up. And now we're back to the drawing board. And so many people will say, Oh, we got to do this again?
Dr. Jim Charkins:Yeah, no, I agree. I mean, there's an old phrase that we use often scarcity stinks. So, so what's the, what's the answer to that? The answer to that is look at your goals, figure out how you're going to get there. And you're going to have to sacrifice along the way most of us.
Chase Peckham:Yes.
Dr. Jim Charkins:You know, if you're blessed with winning the lottery or if, uh, uh, your parents have more money than they know what to do with, well, then that's fine. But if that's not the case, you're going to have to sacrifice, like my son said to me, when he was in college, he said, dad, I'm tired of being a poor, starving student. I said, Kevin, students are supposed to starve suck it up. Uh, you know, so.
Chase Peckham:Someday he's going to miss that.
Dr. Jim Charkins:Yeah.
Felipe Arevalo:The simplicity behind it.
Chase Peckham:That's simplicity. I think that's part of it,
Dr. Jim Charkins:But it's true. So I told you the truth is a danger to democracy, but there are some truths.
Chase Peckham:Yeah. And I think that, that, a nd, a nd, and, you know, we look back at it as adults and look back and say, well, gosh, your life was so simple back then, but it wasn't to us when we were in that point, because we didn't know what we didn't know. You know, that that's so much, that's why education a nd and experience is so vital. That's why making mistakes i s, is a phenomenal thing. It really is learning from your mistakes i s, is huge. U h, i f
Dr. Jim Charkins:It hurts though.
Chase Peckham:It hurts, it hurts. But you know, it is valuable at the time when it took me eight years to pay off the credit card debt that I got myself into, I didn't find it fun. And I didn't think it was a valuable lesson today. I do. Right. I look back at it and go, man, you know, my life ended up much different than it could have if I hadn't to learn that lesson,
Dr. Jim Charkins:Um, you know, Chase, I had a student, good student, who, uh, who came to me and he said, I hear that you're doing, uh, some of the this economics education for kindergarten through 12th grade kids. So I said, yeah. And he said, I'd like to help. I said, what are you talking about? He said, well, I'd like to tell them my story. He was, he was a, uh, a college student,$40,000 in debt. He was working three jobs.
Chase Peckham:Student loans?
Dr. Jim Charkins:No.
Chase Peckham:Just credit card debt?
Dr. Jim Charkins:Yes. Well, a truck, a truck, well, a big truck, but he paid off everything. And, uh, and he went into, uh, he went into a few, um, high school classes and told them his story and his closing line was, don't be stupid like me, but, but, but here's the other thing, as I was writing the money-wise teen lessons, my son drives up in a big old Ford Explorer. My 20 year old son drives up in a big old Ford Explorer. And I'm not even sure he has, he had a job at the time. Maybe he did. Uh, he's now, by the way, teaching special ed and loving it. But, um, he, he drives up and I said, whose car is that? Dad? It's mine, it's yours? So I'm writing this thing to help kids make good informed financial decisions. It was repossessed, I think three months later, that was one of those decisions that, uh, that he learned things from.
Chase Peckham:Wow.
Felipe Arevalo:It's funny, the whole scarcity thing, and people are afraid to sometimes acknowledge it, but it's a reality for all of us, you know, there's a limit to what you can accomplish. It's so true that I think if people can get that concept across, uh, and, and accept it as a reality, then they can move on to trying to adjust to their limits. And, or as you've mentioned a couple of times, and I, and I love it, uh, use their human capital or better themselves to, uh, to be more attractive human capital, I guess. Uh, it's funny. I was looking up inspirational quotes last night. Um, and, and I found one, it was kind of, uh, kind of fitting is, uh,"happiness is not about getting all that you want. It's about enjoying all that you have." And I just thought it was like, Oh, that's a fitting quote that I found on Instagram.
Dr. Jim Charkins:That's a good one. Our university president used to use that at the end of it all, um, commencements. Um, and it, yeah, it's, it's, it's a great saying because it really puts it in perspective.
Chase Peckham:If there was something that you could implement right now into California schools in high schools and have it be implemented in a smart, constructive way, what would it be?
Dr. Jim Charkins:Yeah. Uh, you know, there, there, there are a few things. First. We want kids to recognize their own power, uh, the human capital that they have and, um, what they can accomplish. If they choose to develop that human capital, that'd be the first thing. The second thing would be economic reasoning and Felipe opportunity cost.
Felipe Arevalo:Love it.
Dr. Jim Charkins:You know, recognize that your decisions, every choice that you make has a cost, uh, pigs don't fly. Um,
Chase Peckham:Right.
Dr. Jim Charkins:Then I'd like them to understand. I'd like them to understand that they have to have skills to sell in the labor market. If they're going to achieve financial stability. Um, those, those things would be the absolute basics. Then beyond that, I'd like them to know that if the unemployment rate goes up, they're going to have a more difficult time getting a job. So when we talk about macro economics, what is it in macro economics that affects them? Uh we'd like, I'd like them to know that then I'd like them to understand that public policy usually has people who gain and people who lose not that trade is a zero sum game or anything like that. But there are often, uh, people who are hurt by public policy, I'd like them to investigate, uh, how public policies affect different groups. Um, and what can be done about the people who are going to be hurt by it.
Chase Peckham:Wow. I'd love to have you back sometime, if you would be willing to discuss, uh, capitalism versus socialism, and how that works, Jim, It was an incredible discussion. We had a blast. Thank you so much for being here today. And, uh, I'd love to do it again.
Dr. Jim Charkins:Super Chase, Felipe. Thank you. I had a lot of fun too.
Felipe Arevalo:Thank you for joining us. Appreciate it. And thank you for not having a lot, a lot of charts because I was a little scared we were going to have to do some math.
Dr. Jim Charkins:You want to see my Laffer curve or would you prefer to see my Phillips curve?
Felipe Arevalo:All the charts don't make sense.
Chase Peckham:I can see the beads of sweat coming off your forehead Phil.