High schoolers to the rescue -- of Europe
The Euro Challenge trophy from 2011. Each year, high school freshmen and sophomores take part in the Euro Challenge, a competition to solve the eurozone’s economic woes.
Tess Vigeland: So let's see: We have the Greek economic tragedy, the fate of the euro, fears of a run on Spanish banks. Europe is once again making the wrong kind of headlines. The politicians over there don't seem to be helping, so why not seek some fresh advice?
Like from high school students. Well, they just had their chance at a competition called the Euro Challenge. The Federal Reserve Bank of New York and the European Union sponsor this annual wonk-fest, where high school freshmen and sophomores present their plans for solving Europe's economic problems.
Our New York bureau chief Heidi Moore was a judge this year, and delivers her verdict thusly.
Heidi Moore: John Chiarella is a high school sophomore from New Jersey. The way some 16-year olds rave about hot video games, John riffs on interest rates and the euro. He’s on a mission.
John Chiarella: Me and the rest of the group are going to try and find a way to save Europe from economic calamity, essentially.
He’s not kidding.
Rumson presentation: Good morning and welcome to today's meeting of the European Economic and Social Committee.
Chiarella and three other students at Rumson-Fair Haven Regional High School competed in the Euro Challenge. Their school has sent a team every year since 2008, when they won first place with a bold prediction about Greece.
Joe Lanza: We felt that they would be facing a sovereign debt crisis in the years ahead. And that was 2008!
Joe Lanza is their coach. He recently heard from one of the students on that team, who was gloating a bit.
Lanza: ‘Look at where Greece is today, you know? They still didn’t take any of our recommendations, and they’re still going to have problems in the streets. If they started the process four years ago, maybe they would be in a bit better shape!’
Nearly 100 high schools sent their teenage Cassandras to the Euro Challenge this year. The Rumson team set out to solve the budget problems caused by Italy’s aging population.
Lanza: Um, OK, Italy's borrowing costs rise.
One idea was to cut government pension payments. John Chiarella ran the idea past his mom. It didn’t go over well.
Chiarella: My mom is a strong advocate of social welfare and she thinks that Europe does it very well. I agree with her, mostly. But she has to realize that Italy spends 14 percent of their GDP on pensions.
At a weekend practice session before the competition, the coach, Joe Lanza drilled the students.
Lanza: Explain the one-size-fits-all monetary policy.
Chris Brodsky, a sophomore, showed off his mastery of the economic lingo.
Lanza: Rising oil prices. Which do what, Chris?
Chris Brodsky: Postpone inputs such as hiring new workers and new orders for capital goods.
Chiarella says their classmates respond to all of this with blank expressions.
Chiarella: A lot of my friends are like, not too into economics or history. One person asked what I’m doing here, and I explained our whole pension plan, what’s the trouble with Europe, what’s the trouble with Italy. He was like, “Oh. So, did you see 'Ghost Protocol' yet?”
The students vying to be Euro Challenge champions may be misfits while they’re practicing, but the grind pays off. On the day they filed into the New York Fed for the competition, these teens sounded like future Treasury Secretaries.
I sat up front as one of three judges for the final round.
Moore: Are banks taking losses on existing mortgages?
All of us were dazzled by what the kids knew: inflation, unemployment, economic bubbles.
Hannah Walter: The Irish mortgages were plain vanilla.
Later on at the reception, Mia Ellis from Montclair High School explained how her team would solve the Irish housing crisis, in expert terms.
Mia Ellis: We also suggested limiting or banning tracker mortgages in Ireland and in the future, to prevent bubbles, to limit building permits.
Her team won third place. Unfortunately, Rumson-Fair Haven didn’t make it to the final round.
Announcer: Our 2012 Euro Challenge champions: Ridgefield High School from Ridgefield, Conn.!
The winners proposed tougher labor laws and higher taxes in Italy -- something that might not fly politically. At the reception, the winning students joked about the best use of their prize money: $1250 each.
Student: I think I’m going to save it.
Student: Or you know, buy Italian debt and help out the country.
Even Europe’s ambassador to the U.S. said the eurozone could use the help. Joao de Vale Almeida offered up some gallows humor on that point.
Joao de Vale Almeida: This time last year, a number of people were saying that I would not be here one year later – for the simple reason that the euro would have been dismantled, the euro area would have been broken up. Well, I’m still here, and the European Union is still over there.
Nonetheless, the ambassador said he’d take some of the students’ ideas back with him.
de Vale Almeida: I'm sure you have found solutions that I'll be happy to take over to Europe. I'll be happy to pay some copyright.
It couldn’t hurt, right?
In New York, I’m Heidi Moore for Marketplace.