Tuesday, November 30, 2021

Crypto in the classroom: Lucy Kellaway on the kids’ new craze

FT readers respond: Cryptocurrency in the classroom
In her Weekend FT article “Crypto in the classroom: Lucy Kellaway on the kids’ new craze”, she tells of the rising enthusiasm shown by pupils when talking about such investments. One student boasted he “made” £100 in one day on his holding.


Kellaway makes the point that schools generally fail to engage pupils when it comes to learning about money. Lessons need to be properly designed to work around the behavioural biases that make children (and adults) so bad with money, she says. The article launched a debate among readers on ways to help schoolchildren understand money. Suggestions ranged from fantasy portfolios to encouraging children to take up part-time jobs and using games such as Minecraft to capture young people’s interest in finance.


Crypto in the classroom: Lucy Kellaway on the kids’ new craze

In an age when trading apps have made investment cool, understanding money is more important than ever for school children

It is registration time at a big comprehensive in Edgware, north London. Today, like every morning so far this term, the sixth form girls sit around chatting in twos and threes while most of the boys are in one large huddle.

 “I’m up over £100 in one day, bitches!” a boy in the centre crows. Others proclaim their gains in a conversation peppered with the words shiba inu, dogecoin and Elon Musk. Their form tutor, a recent history graduate, looks on with a growing sense of unease. “Isn’t trading cryptocurrencies just like gambling?” she asks them.



More than half the boys in her class are Muslim and gambling is not something the Koran looks on kindly. The student in the middle gives her a scornful look. “Nah Miss,” he says. “It’s investing.”  This boy has failed to show much interest in schoolwork over the years, but here he is, the Gordon Gekko of form 13J. 

He spends all his time on TikTok, Instagram and YouTube absorbing tips from dubious celebrities, which he then passes on to his disciples. God help these boys, their teacher says to me later, if they are putting their money at risk on advice from this particular student. 

Similar scenes are playing out in schools across the country as teenage boys — girls seem almost entirely unmoved by this latest craze — buy and sell cryptocurrencies. It is not hard to see why they have whipped themselves into such a frenzy. There is the cool language of technology and an endless drip-feed of hype on social networks. Digital currencies are thrillingly anti-government and rebellious, but the best thing about them is their promise of easy, instant money.

 Bitcoin has gone up from £600 to £45,000 in five years — a rise of 7,400 per cent — and to the untrained teen mind this is all the evidence needed that the rise will continue. The fact that it is also illegal for minors to trade cryptocurrencies on most platforms may add to the attraction, but either way makes no difference to the ease with which they are doing it. 

Some have persuaded parents or other adults, many of whom themselves are financially unsavvy, to set up accounts for them. Others buy the coin at ATMs or exchange Amazon gift cards for bitcoin. Ibrahim is 15 and is at the sensible end of the spectrum. He lives with his mum — who is strict and doesn’t let him go on social networks — and he is working hard in order to be a doctor or a pilot when he leaves school. But one evening last summer he was scrolling through videos on YouTube and came across Brian Jung, a college dropout who had just made $100,000. He got interested, and talked his mum into opening an account.

I explained cryptocurrencies to her,” he tells me. “She’s put some of her money in too.” He takes me through their portfolio. They have invested £50 in dogecoin, £180 in bitcoin and £50 in cardano; their total holding is currently worth £408. Every morning before he gets out of bed he checks his investments on his phone. Every evening he spends 15 minutes watching videos, to educate himself. 

I ask if he would invest on borrowed money. “No!” he says. “That would be way too risky.” That’s not going to happen — if it goes down one day, it’s going to go up again Ibrahim, 15 What Ibrahim is doing is impressive. In just four months he has taught himself about diversification, about market volatility and transaction costs. 

He knows far more about cryptocurrencies than I do and in some ways is more sophisticated about investment. Yet hearing him talk I still feel anxious — he does not seem aware that he is risking sums his household may not be able to afford to lose. I ask how he would feel if the market crashed and he lost everything.


Sad,” he said, but then he added: “but that’s not going to happen — if it goes down one day, it’s going to go up again.” I’m not the only teacher who is looking on with concern. Pani Matsangos, an assistant head at a comprehensive in east London with 15 years’ experience teaching economics, thinks an urgent change in schools’ approach to teaching children about money is needed.

 “Financial literacy has always been important for social mobility, but 10 years ago the world was simpler. When kids got their first pay cheque, they could mostly work things out themselves. Now young people need much more support to navigate a rapidly changing system — especially to deal with predators trying to reach them on social networks. You can be on your mobile, giving away money that isn’t yours to crypto scammers. This is new and we need to do something about it.”


He is also worried about how school children are being duped into becoming money mules — allowing stolen money to wash through their bank accounts in return for a fee. He knows of 10 of his more vulnerable students who in recent years have fallen prey to the irresistible lure of money-for-nothing — though he thinks the true number may be higher as it isn’t something they brag about. “I’ve had a kid come to me and say he can’t be in for a lesson because he needs to go to the bank and sort something out,” 

Matsangos tells me. This boy was risking a criminal conviction, a permanently damaged credit record and an inability to open a new bank account — by dint of having walked into a situation that no one had ever warned him against. Safeguarding rules have recently been extended to include the practice known as “county lines” — where children are used to sell or just transport drugs in suburban or rural areas outside where the gangs are operating — but there is little mention in any safeguarding training about money mules or financial scams. 

In some ways the task of turning children into financially literate adults should be a doddle as it goes entirely with the grain: the subject of finance interests most of them considerably more than photosynthesis or the Tudors — or most other things on the school curriculum. 

When I became a teacher four years ago I was struck by the rapture with which my students discussed money. When I was growing up in the 1960s and 1970s it was never mentioned — partly because we had enough not to have to fret about it but also because back then money wasn’t considered a polite topic of conversation.


By contrast my students, most of whom come from less privileged backgrounds, mention it constantly. 

They admire money and they want to have more of it. Every well-known person who turns up to give a talk to a school can expect the first question they will be asked is how much they earn. 

Last September I started teaching at a girls’ comprehensive in Tower Hamlets and it took barely a week for the most outspoken girl in my tutor group to pipe up: “Miss! You’ve got a Wikipedia page! What’s your net worth?” 


This openness about money is good in itself — and it seems to make students more inclined to concentrate on their schoolwork. I once asked my students why they bothered to do their homework. Was it to impress me? To avoid a detention? No, came the answer. It was to be rich in later life. 

Another time I showed my class a news story about Denise Coates, the chief executive of Bet365 who had just been paid £421m for a year’s work. I had expected a shocked response, particularly as half of them were on free school meals and therefore had annual family incomes equal roughly to what Coates made in 20 minutes. 

Instead, not only did they think she deserved her salary, having worked for it, but the sight of her earning so much would be a powerfully motivating force to the people on low pay who worked under her


Faced with students so hungry to learn about money, schools generally fail to provide them with much to get their teeth into. In my old school most teachers did not feel their own financial nous was up to doing any teaching about money at all. Once I was approached by a colleague who organised assemblies and asked, in a panic, if I could do something about student finances for the following week.

 I cobbled together a hasty 10-minute presentation about budgeting and pocket money. It was just about OK, but was a drop in the ocean of ignorance. Financial illiteracy begins even further back than not knowing how to budget. Students’ great interest in money seems to be matched by an equally great ignorance about what money is worth. 

A few weeks ago I was teaching Year 12 economics students about Veblen goods — for which demand rises as prices rise — and told them I’d once been sent by the FT to review the most expensive hotel room in London. 

I asked the class to write on mini whiteboards what they thought this might cost — one wrote £56 a night, while another thought it would cost £500,000. When I told them the correct answer was £42,000 there was none of the shock I was expecting — with no benchmark against which to set such a sum, they had little way of judging it. Bobby Seagull, FT columnist and maths teacher, recently asked his Year 11 class to guess the average salary in the UK. The students, whose minds were full of footballers’ pay and general bragging on social networks, put the average at about £80,000 — nearly three times the correct median figure of £30,000. 

Last month, I surveyed my Year 12 tutor group, where the girls are mainly from traditional Bengali families, and found their knowledge equally shaky. When asked who earns most, bankers or nurses, nearly half the class thought nurses did. Not only do they not know what money is worth, they don’t understand interest, let alone compound interest Not only do they not know what money is worth, they don’t understand interest, let alone compound interest — which is odd as both are part of the maths GCSE curriculum. I put to my tutor group the following easy question: how much would £100 in a savings account paying 10 per cent interest be worth after five years? 

Presented with the possible answers a) more than £150 b) less than £150 or c) exactly £150, an astonishing 60 per cent picked the wrong one. Most of these girls can do the sums within the context of a maths lesson, but when it comes to applying their knowledge to the real world they don’t know how to begin. This suggests compound interest needs to be retaught, not just in maths but as a practical skill that could help them better manage their money. Even more challenging is teaching school children about risk. 

Here their interest in money gets in the way: such is the desire for profit that dry warnings about losses have no impact at all. One day last year I gave a lesson to GCSE economics students on GameStop, the struggling games retailer whose shares had been skyrocketing in a David-and-Goliath short squeeze. I explained to the class short selling. I explained that this was turning into a giant Ponzi scheme. I showed them the steeply rising share price graph and asked them to put up their hands if they would invest now. 

Never mind all my warnings, the hand of almost every child in the class shot up into the air. My half-baked lesson on risk may have failed to teach my students anything, but it taught me that this is too important a subject to be covered on the hoof. Lessons need to be properly designed to work around all the behavioural biases that make children (and adults) so bad with money. 

Students need to be shown real case studies of people like them who have taken bad risks and lost money. They also need to learn about people who have made money, not miraculously overnight, but slowly. Above all, they need to be taught systematically what money is worth. Only then will they be ready for the most urgent lesson of all: if something looks too good to be true, it is too good to be true. 

Lucy Kellaway is an FT contributing editor and co-founder of Now Teach, an organisation that helps experienced professionals retrain as teachers 


Wall Street Journal editorial, Censoring the Pilgrims:

WSJ OpinionNo doubt it was only a matter of time. The progressives have come for our annual Thanksgiving editorials. They won’t succeed, but we thought we’d share the tale with readers for an insight into the politicization of everything, even Thanksgiving.

Since 1961 we’ve run a pair of editorials written by our former editor Vermont Royster. The first is a historical account about the Pilgrims in 1620 as related by William Bradford, a governor of Plymouth Colony. The second is a contemporary contrast from the mid-20th century about the progress a prosperous America has made that we can all be thankful for.

Global State of Democracy in 2021 Report

Democracy faces perfect storm as the world becomes more authoritarian Many democratic governments are increasingly adopting authoritarian tactics, accentuated by the Covid-19 pandemic, while autocratic regimes are consolidating their power.


$1 billion and counting: Investigator reveals size of poker machine crime

Pubs and clubs with poker machines ‘need a wake-up call,’ says NSW gaming’s chief investigator in a rare interview as footage shows one brazen money laundering operation in action


What the Asian media are saying: ASEAN, JI returns, ping-pong diplomacy

Xi Jinping’s appearance at ASEAN this week, a question mark over China’s naval power, concerns about Jemaah Islamiyah rebuilding, and more news from our region. 


 


Shane Maloney has admitted to killing 17 people, although he can’t be completely sure without digging up the bodies. My death toll is considerably higher, but I’ve been doing this for a long time now – almost 20 years.

My victims have been shot, drowned, stabbed, frozen, incinerated, run-down, squashed, speared and pushed in front of moving vehicles. I once blew up a train carriage with acetone peroxide, colloquially known as “Mother of Satan”, and I seem to be fixated with setting fire to things.

‘It only takes one’: How Australian crime writing took over the world


The world is becoming more authoritarian as autocratic regimes become even more brazen in their repression. Many democratic governments are backsliding and are adopting authoritarian tactics by restricting free speech and weakening the rule of law, a trend exacerbated by the Covid-19 pandemic. These are the key findings of the “The Global State of Democracy Report 2021 – Building Resilience in a Pandemic Era”, published on 22 November 2021 by the International Institute for Democracy and Electoral Assistance (International IDEA), an intergovernmental organization based in Stockholm. 

“The Global State of Democracy report is not a wakeup call, it’s an alarm bell. Authoritarianism advances in every corner of the earth. Universal values – the pillars of civilization that protect the most vulnerable – are under threat. The EU shares many of the challenges. But we do have a unique and diverse experience of democracy…More than two-thirds of the world’s population now live in backsliding democracies or autocratic regimes…”



6 Ways to Make It Harder for Data Brokers to Collect Your Data



Second Commissioner Jeremy Hirschhorn's speech to the 14th International ATAX Conference on Tax Administration ...
Olympic Games analogy of note … 


 MakeUseOf: “Data brokerage is the underground economy that powers online advertising today. They follow us so much everywhere online; it’s hard to believe that this practice of buying and selling our data is even legal. The real-world equivalent of this practice is someone stalking you 24/7, noting your every move, with little or no consequence. And while it initially appears as a harmless way to sell you more things, data brokerage has evolved to affect everything from your credit scores to insurance premiums. So, what can you do to make it hard for data brokers to buy and sell your data?…”


Israel bans foreigners from entering country to stop Omicron variant Jerusalem Post




A new variant of the Covid virus discovered in southern Africa, experts warn: its power may exceed delta What China Reads


Supply-Chain Crisis Only Getting Worse With China’s 7-Week Port Quarantine Bloomberg. Paraphrasing, the CCP should risk workers’ lives so Western rentiers can make bank (and Western consumers consume). Let me know how that works out.


The New York Times – Researchers can now design and mass-produce genetic material — a technique that helped build the mRNA vaccines. What could it give us next?…In a way, that future has arrived. Gene synthesis is behind two of the biggest “products” of the past year: the mRNA vaccines from Pfizer and Moderna. Almost as soon as the Chinese C.D.C. first released the genomic sequence of SARS-CoV-2 to public databases in January 2020, the two pharmaceutical companies were able to synthesize the DNA that corresponds to a particular antigen on the virus, called the spike protein. This meant that their vaccines — unlike traditional analogues, which teach the immune system to recognize a virus by introducing a weakened version of it — could deliver genetic instructions prompting the body to create just the spike protein, so it will be recognized and attacked during an actual viral infection…Now companies and scientists look toward a post-Covid future when gene synthesis will be deployed to tackle a variety of other problems. If the first phase of the genomics revolution focused on reading genes through gene sequencing, the second phase is about writing genes. Crispr, the gene-editing technology whose inventors won a Nobel Prize last year, has received far more attention, but the rise of gene synthesis promises to be an equally powerful development. Crispr is like editing an article, allowing us to make precise changes to the text at specific spots; gene synthesis is like writing the article from scratch…”



This New Tool Lets You See Floods From Around the World, Dating Back to 1985

Smithsonian Magazine: An innovative interactive map could aid future disaster planning, especially for vulnerable countries in the developing world. “Last month, the United Nations University released a free tool that generates high resolution maps of floods worldwide since 1985. The new resource comes after a year of historic water-related disasters, including severe floods in Western Europe and the northeastern United States. Experts hope the online tool will aid in disaster readiness and future planning, especially for vulnerable countries with limited access to reliable flood maps.  The tool allows scientists, organizations and curious members of the public to adjust variables to see where floods have occurred in the past. Users can select a location and timeframe, and the tool, which draws on decades of data from remote-sensing satellites, produces a flood map at a 30-meter—about 100-foot—resolution. Viewers can see water inundation images down to street level. Similar mapping tools have been developed to assess floods by type and region, “but you don’t see anything happening at a global scale,” says Hamid Mehmood, a remote-sensing specialist at UN University’s Institute for Water, Environment and Health (UN-INWEH) in Hamilton, Canada, and the tool’s lead developer…”



Andrew Podger- Public servant Angie McKenzie as FOI act delegate has no right to anonymity from Senator Rex Patrick

Senator Rex Patrick may have gone too far in personalising his criticism of Angie McKenzie but, as the delegate making the decision regarding his request for documents under the FOI Act, she has no right to anonymity. 







Labor backs UK-style consulting hub for top bureaucrats

 

Labor backs UK-style consulting hub for top bureaucrats

Tom Burton
Tom BurtonGovernment editor

An internal consulting hub would help stem the loss of federal public sector capability, save money and promote “frank and fearless” advice, according to a new report from a Labor-dominated Senate committee.

The majority of the Finance and Public Administration References committee called for a formal cap on agencies to limit the amount of consulting, a ban on the use of consultants for strategic work, and the removal of Australian Public Service head count limits.

Former AMWU chief and Labor senator Tim Ayres described consultants as “rent seekers” and “ticket clippers” who had contributed to the politicisation of the public service.  Alex Ellinghausen

It also called for the completion of an audit of ICT contractors by the Digital Transformation Agency. The committee report cited statistics that showed across the 77 agencies for which data was provided there were 10,184 ICT contractors compared to about 10,020 for internal public servant ICT staff.

The minority rejected the recommendations, claiming they represented “little more than a wish list for the union movement, which represents a minority of the APS workforce and only a fraction of Australian taxpayers who fund the public service”.

“Many recommendations have been lifted directly from union submissions and have ignored the evidence provided by APS agencies to the inquiry,” Tasmanian Liberal senator and deputy chair Claire Chandler said.

Citing research from the Australian Institute, the senate report titled “APS Inc” claimed the Australian consulting industry was the fourth largest in the world.

“The report describes an industry of outsourcing and sleazy Canberra deals. It’s an industry that reaps billions of taxpayer dollars and hides its profits in offshore bank accounts but delivers an inferior service for taxpayers and undermines public sector capability,” the committee chairman Senator Tim Ayres said.

“It’s an industry that relies upon opaque contracts and no accountability to the Australian public or to the Parliament. It’s an industry that redirects taxpayer money that should serve the public interest and hands it to rent-seekers and ticket clippers.”

Senator Ayres was previously the state secretary of the left-aligned Australian Manufacturing Workers’ Union.

He said Labor would decide which of the proposals it would pick up ahead of the upcoming election.

“We’re pointing to the same problems. We’ve got to get the public service leadership back to its core responsibilities,” he said.

Senator Ayres said the hub was an innovative idea based on the UK Government Consulting Hub.

“It’s the Boris Johnson model in the United Kingdom, and means that a consultancy hub would be where some of the best and brightest policy experts, graduates and practitioners from the public service would go to and provide an alternative source of policy consultancies.”

He said in the UK the hub also provided “strategic over-the-shoulder” advice for departmental secretaries and agency heads.

Under the proposal, the hub would also vet consulting contracts, with a power to rewrite contracts with consultants.

The report was scathing about the amount of consulting work the federal government undertook.

“It is utterly unacceptable that the government paid close to $1.2 billion in one year to eight private consulting firms in an entirely unaccountable way, for work that arguably should have been completed in-house by the APS,” the report says.

This, it says, was the equivalent of 12,346 full-time public service jobs.

The Thodey Review of the federal public service found widespread loss of policy capability but said it was not clear if the use of consultants had been a primary driver. It noted the lack of good data made it difficult to assess how many core functions were being outsourced to consultants.

The committee zeroed in on the tax status of many of the major tech vendors and consultancies.

“The committee is concerned that domestic companies that abide by Australian tax law are at a significant disadvantage in obtaining federal ICT contracts, while multinational competitors undercut them by minimising tax obligations and other corporate responsibilities.

“The fact that $4.4 billion in federal contracts was awarded nearly entirely to overseas companies in 2020 alone highlights the extent of this problem.

“The committee feels strongly that multinational companies that engage in tax minimisation in Australia should not be rewarded with taxpayer money through large federal ICT contracts for the APS.

“The committee recommends that where ICT contracts must be awarded to multinational corporations, at a minimum, the Australian government must require those corporations to produce a copy of reporting under the Global Reporting Initiative Tax Standard, or implement the standard within one year.”

Tom Burton has held senior editorial and publishing roles with The Mandarin, The Sydney Morning Herald and as Canberra bureau chief for The Australian Financial Review.He has won three Walkley awards.Connect with Tom on Twitter. Email Tom at tom.burton@afr.com