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This is Capitalism: Up Close, Inspired, Explained

Nov 23, 2018

The organization known as SIFMA goes back to 1912. It is a trade group which was first known as the Investment Bankers Association of America, then for many years, the Securities Industry Association, and now, the Securities Industry and Financial Markets Association (SIFMA). SIFMA may be best known for a game played by middle school and high school students that represents the only economic education that some of them ever get before going out into the working world — The SIFMA Stock Market Game. SIFMA’s CEO is Ken Bentsen. He’s a former member of Congress, who, in a relatively short eight years in the House, compiled a rather lengthy resume of bipartisan financial solutions. Meet Ken Bentsen.


Key Takeaways:

[:19] Ray Hoffman describes the Securities Industry and Financial Markets Association (SIFMA) and gives background on its CEO, Ken Bentsen.

[1:09] Ray introduces Ken Bentsen.

[1:11] Ken comments on SIFMA’s mission statement, “SIFMA exists to advocate that America’s capital markets operate effectively and efficiently to the benefit of all market participants.” Ken describes the maturity of the U.S. capital market system and its correlation with the U.S. economy.

[1:51] Ken notes that the capital market system is one of the most highly-regulated industries in the United States. While regulations ensure a level playing field, it is also important that markets are able to operate efficiently and effectively. If not, credit will not be allocated to the best ideas — the great innovations that create jobs.

[2:33] The U.S. capital market has created an upward sloping chart in terms of the growth of the U.S. economy, going back 200 years. Even coming out of the 2008-2009 Great Recession, the U.S. came back more quickly than other jurisdictions around the world. Ken credits the resiliency of the U.S. capital market system.

[3:34] Ken’s covers his career path, from his Master’s degree in public administration to working as a Congressional staffer, to following Congressional finance committees, to working in public finance in New York, to the House of Representatives working on financial services legislation, to consulting, to running a trade association, to SIFMA.

[6:06] Ken served for four terms in Congress from Houston. He lists the committees on which he served, all tied to finance and budget.

[6:18] Ken discusses the public’s general understanding of finance today vs. 20 years ago when he was in Congress. People feel pressure from the financial issues that impact them personally, whether that’s housing, cost of living, healthcare, or the effect of trade on jobs. People can get more for their dollar today, including new technologies.

[8:01] It is most important to grow the economy as much as we can, to be able to solve fiscal issues.

[8:33] Capital markets definitely play a role in growing the economy. Ken says, “We’re not the end — we’re the means to the end.”

[8:42] The Stock Market Game is run by the SIFMA Foundation, which has been in place for 40 years. The Stock Market Game is the premier program that they do in thousands of schools across the U.S., touching hundreds of thousands of students every year.

[9:27] The SIFMA Foundation built on the game over 40 years with programs like InvestWrite®, and Invest It Forward. The results are amazing to see. They impact middle school and high school students, their teachers, and parents. Sixth, seventh, and eighth grade students in the programs do research reports.

[10:05] This is important not only from the standpoint of financial literacy, but it also goes toward understanding the structure of the American economy, built in part on our financial system, which makes our economy stronger in contrast to other economies.

[10:26] 12,000 schools in all 50 states participate in the programs every year, involving 600,000 students and 15,000 teachers. In 40 years, 18 million students have gone through the program. The SIFMA Foundation is working harder every year to increase participation.

[10:47] SIFMA works with The SIFMA Foundation every year to do a competition to bring the top 10 schools to Washington D.C. to meet with their Representatives and Senators. This underscores to the students coming from all over how big and diverse this country is.

[11:18] Students from all walks of life come in and talk about portfolios they’ve put together, the things that worked, and mistakes they made. They talk about looking at price reports every day, and research reports. It’s just amazing.

[11:34] The top 10 winners of The Stock Market Game 2018 Capitol Hill Challenge came almost equally from areas represented by Democrats and areas represented by Republicans. Ken says it is really refreshing to see what The Stock Market Game does with these kids from all walks of life.

[12:11] “To the benefit of all market participants” - Ray quotes the SIFMA mission statement. In the truest sense of the U.S. economy, we are all market participants. This is capitalism.


Mentioned in This Episode:


The Stock Market Game™

Ken Bentsen

Drexel Burnham

The SIFMA Foundation


Invest It Forward™

Capitol Hill Challenge

This Is Capitalism