Don't blame the reader

The unreadability of financial documents

Foreclosure sign
Unreadable documents are among the main causes of the current financial crisis.

JOURNALISTS not familiar with statistics often wrongly interpret literacy studies. That happened recently when two prominent journals, The Economist and the New Yorker published articles on the contribution of financial ignorance to the recent financial crisis.

The May 10 article in The Economist was straight-forward enough. A trio of economists found that those who were least numerate had more difficulty facing financial troubles:

"The least numerate fell behind about 25% of the time. For those who did best on the test, the number of payments they missed was almost 12%. A fifth of the least numerate group had been in foreclosure, but only 7% of those who were more numerically adept had. Surprisingly, the least numerate were not making loan choices that differed much from their peers. They were about as likely to have a fixed-rate mortgage as the more numerically able. They did not borrow a larger share of their income. And loans were about the same fraction of the house’s value."

The July 6 article in the New Yorker by finance writer James Surowiecki relied on the same report, but was not so balanced. Although he admits, "Financial illiteracy is not new," he spends half the page proposing new remedies, including "proper financial education." Certainly, most of us could benefit from more financial knowledge. (To test your own, take the Economist's quiz.) Both articles, however, avoid the gorilla in the room, the unreadability of financial documents.

Systematic, institutionalized deception

As we pointed out in Number 38 of this Newsletter, faulty mortgage-disclosure forms are at the heart of the crisis. Even advanced readers fail to read and understand the terms of the mortgage:

"In California, for example, there are 50 to 75 disclosure forms, which the buyer has to read, understand, and sign. Written at the 12th-grade level and up, average adult readers in the U.S. find them impossible to read. They often sign without reading or understanding, jeopardizing consent, the integrity of the contract, and the success of the loan."

Even if we set aside the high rate of predatory lending, the whole real-estate industry is guilty of systematic and institutionalized deception. The banks and the lenders have little incentive to make sure the buyers understand the terms of the loan. The levels of literacy, for both reading and math, are adequate for most people. The crisis was not caused by the lack of financial education but by the refusal of the industry to properly present the loans in language the buyers can understand.

Needed: literacy about literacy

Financial education brochure
A financial education brochure: not rocket science.

Many journalists are also ignorant of the literacy landscape in which they live and write and make their living. They are often surprised by a finding that shows limited reading and math abilities among some of their fellow citizens. "It's depressing work," Surowiecki writes about studies of financial literacy.

Journalists also tend to blame the schools and teachers for what they regard as a sad state of affairs. What they fail to recognize is that the literacy glass is way more than half-full. Both reading and math literacy has remained stable or improved during the last 40 years—in spite of greater demands on teachers and cutbacks in school budgets. Learning how much credit one can undergo is not rocket science. Nearly all buyers can understand the terms of a loan when presented in language they can understand.

Needed: finance in plain language

Consumers the world over are finding more difficulties when dealing with financial documents. Surowiecki's appeal for more financial education deserves urgent support. "The point," he writes, "isn't to turn the average American into Warren Buffett but to help people avoid disasters and day-to-day choices that eat away at their bank accounts."

There would be no better place to start than with journalists themselves, who are hardly adequate in this field. Max Frankel (former executive editor of The New York Times) argues that "deploying numbers skillfully is as important to communication as deploying verbs." In a study by the Society of Professional Journalists, 58 percent of job applicants interviewed by broadcast news directors lacked an adequate understanding of statistical materials. When journalists lack these skills, they cannot communicate effectively what readers need to know.

It is even more rare to find good finanncial information written at popular levels. Surowiecki's own writing is at the 12th grade level, two grades above the average financial-news writer and the average level of his own magazine, the New Yorker. With nearly half the adult population in the U.S. reading below the 8th-grade level--some 100 million readers--he is not reaching the people who need his information the most. Most everyone wants to know more about managing money, but very little is written at levels the averge reader can read and understand.

Mortgage documents should be simple, short, and written at the 5th-grade level. The most important information should be clearly indicated and included in a summary. Added explanations and questions can make sure the customer clearly understands the terms of the contract. Such steps would have avoided many of the financial difficulties people face today.

Plain-Language Classics

Dr. Seuss's happy readers

Cat in the Hat commemorative stamp
1999 stamp commemorating The Cat in the Hat, the book that changed forever how children learn to read.

WHEN first published in 1930, the Elson-Gray Basic Readers seemed like a very good idea. Along with the Dick and Jane primers that followed, each page featured a simple story about children in a familiar setting illustrated with a full-color picture.

By the 1950s, however, the neighborhood of Dick and Jane was no longer familiar to a large number of young readers. Worse, the stories were boring. Children did not want familiar. They wanted fun and excitement.

Writer John Hersey noted a decline in national reading scores in a 10-page article in the May 25, 1945, in Life magazine entitled "Why Do Students Bog Down on First R? A Local Committee Sheds Light on a National Problem: Reading." Hersey stated:

"In the classroom boys and girls are confronted with books that have insipid illustrations depicting the slicked-up lives of other children. [Existing primers] feature abnormally courteous, unnaturally clean boys and girls. . . . In bookstores, anyone can buy brighter, livelier books featuring strange and wonderful animals and children who behave naturally, i.e., sometimes misbehave. Given incentive from school boards, publishers could do as well with primers. . . .

"Why should [school primers] not have pictures that widen rather than narrow the associative richness the children give to the words they illustrate — drawings like those of the wonderfully imaginative geniuses among children’s illustrators, Tenniel, Howard Pyle, Theodor S. Geisel?"

In 1955, Rudolf Flesch published his most popular book,Why Johnny Can't Read—and What You Can Do About It. Advocating better use of phonics in the teaching of reading, Flesch's book caused a storm of controversy.

Dr. Seuss commemorative stamp
2004 stamp commemorating the comic genius of Theodor Geisel in teaching children how to read.

Enter Dr. Seuss

Also taking note of the need for better primers was Theodor Seuss Geisel. Recognized since his school days as a comic genius, Geisel had become a highly successful political cartoonist, humorist, and commercial illustrator. Under the name Dr. Seuss, he had already published 7 moderately successful children's books written at the 4th-grade level. His first work, And to Think I Saw It on Mulberry Street was published in 1937 and was well received by the critics. The idea of writing for the beginning readers of the baby-boom generation fascinated him.

Geisel knew the best children's books were the one's that appealed to their sense of fantasy. "They want fun. They want play. They want nonsense," he would say. "Children analyze fantasy. They know you're kidding them. There's got to be logic in the way you kid them. Their fun is pretending... making believe they believe it."

Geisel also knew the frustrations that children face. Children are "thwarted people," he would say. "Their idea of tragedy is when someone says you can't do that." Having suffered discrimination while growing up German during World War I in Springfield, Massachusetts, he wanted to teach children about tolerance and equality. Like Jean Piaget, he realized that "play is the business of childhood." He intended to use play and humor to teach children how to read, how to deal the frustrations of childhood, and how to make a better world.

William Spaulding, who had worked with Geisel before, had become the director of the educational division of children's books at Houghton Mifflin. He challenged Geisel to write a primer of no more than 235 unique words to be selected from a list of 348. He also wanted a book that a child would not be able to put down.

Geisel took up Spaulding's challenge because he shared Hersey's and Flesch's concern. He knew there should be books that could compete with the comics and animated cartoons. It took him and his wife Helen nine months of hard work to finish The Cat in the Hat.

Written at the first-grade level, it uses 223 words from Spaulding's list plus 13 words that are not. It is 1629 words in length, of which 54 occur once and 33 twice. Only a single word, "another," has more than two syllables, while 14 have two and the remaining 221 have only one. The longest words are "something" and "playthings."

The Cat arrives

On 1 March 1957, Random House published 12,000 copies of the book sold at $2 a copy. At first, the schools rejected the book as being "too fresh and irreverent." In bookstores, however, it flew off the shelves. Children who heard about the book from their friends nagged their parents until they bought a copy. It was the first child's book to become a "playground word-of-mouth runaway best seller."

Critics raved about it. The New York Times Book Review said it was the "biggest thing to hit the American classroom since McGuffey's reader in 1836." In three years, Random House would sell a million copies, with translations in French, Chinese, Swedish, and Braille.

The succcess of the book was no accident. Every page of The Cat in the Hat is a perfect combination of a funny text and a funny picture, with one reinforcing the other. The cat says what it does and does what it says:

"Look at me!
Look at me now!" said the cat.
"With a cup and a cake
On top of my hat!
I can hold up TWO books!
I can hold up the fish!
And a little toy ship!
And some milk on a dish!"

This two-pronged approach draws readers into the action, creating the desire to read. It shows them how language works, enabling them to connect the words with sounds and images. The anapest verse and rhyming words like "cat" and "hat" and "dish" and "fish" teach them that words are sounds that can be a source of pleasure along with the meanings they carry.

Geisel and his wife would go on to create more than 46 books for children, including other classics like Green Eggs and Ham and How the Grinch Stole Christmas! They would address the big issues of the day: discrimination, equality, dictatorship, war, social engagement, and the environment.

Geisel's books won the Pulitzer Prize in 1984, two Academy Awards, three Emmy Awards, three Grammy Awards, a Peabody, three Caldecott Honors, and a Laura Ingalls Wilder Award. More than 200 million copies of his books have sold world-wide, in 15 different languages. While Theodor Geisel died in 1991 at the age of 97, Dr. Seuss lives on, helping children the world over to explore the joys of reading.

Plain language in the news

Five tips for avoiding ugly documents: http://tinyurl.com/33zynuk

SEC to vote on plain English disclosures: http://tinyurl.com/39uaw3b

Climate change needs a plain language guide: http://tinyurl.com/2c92e4n

Bewildering road signs: http://tinyurl.com/35ghy9f

Preventing another financial crisis: http://tinyurl.com/2eakp6v

Tips for better business communications: http://tinyurl.com/38x5pts

Taking jargon out of doctor visits: http://tinyurl.com/2e39jlo

Oregon finds easy words tough to come by: http://tinyurl.com/2u44gqg

Universal precautions for health literacy: http://tinyurl.com/2chp7fe

Health literacy and cancer outcomes: http://tinyurl.com/2es3tz4

National plan to improve health literacy: http://tinyurl.com/35jaojz