Book Review: Pound Foolish by Helaine Olen

Helaine Olen’s attack on the personal finance industry, Pound Foolish, is animated by a nice, original idea, which is that personal finance represents the downside of the empowerment society. Once upon a time, ordinary Americans had unions, pensions, predictably rising incomes, and government protections to look out for them. Global trade, with its corollary of stagnant middle-class incomes and declining political support for social spending, put an end to all that. So as the social safety net became frayed in the waning years of the 20th century, Americans were sold a bill of goods: The notion that by putting a few pennies into their 401(k)s each month, ordinary people could assure a comfortable retirement and maybe grow rich. “It was presented as empowering, an almost surefire way of avoiding economic catastrophe.” But the dream was a chimera.

Or as Olen, a former personal finance columnist herself, explains: “It occurred to almost no one that we were looking to personal finance, real estate, and the stock market to fix long-term economic problems. Our increasingly individualistic culture caused us to embrace a self-help approach to what was clearly a greater social issue.” As a result, today we’re faced with a sprawling self-help industry, a virtual army of supposed personal finance experts, some of them highly glamorous and overly compensated for peddling advice.