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MONEY SMART KIDS
Raising Ethical Children
by Janet Bodnar

Not long ago, my son Peter, a freshman in high school, had left his wallet -- which contained his school ID, a $20 bill and several gift cards -- on the bus. Over the next week, we called the bus company every day to see if anyone had turned it in. No such luck.

A couple of weeks later, Peter came home from school and announced that "the coolest thing" had happened. Then he plunked down the wallet, its contents intact. A woman had tracked Peter down through his ID and turned in the wallet to the school office. Peter was so impressed that for days he would periodically stop, shake his head and say in amazement, "I can't believe I got it back."

I don't know what struck me more -- that the wallet had turned up or that Peter was so shocked by its return. He had simply assumed no one would be honest enough to bring it back.

For all the ink and airtime we've expended wondering what the ethical breaches in corporate America mean to shareholders, employees, regulators and markets, we've neglected to discuss the effect the scandals are having on children. And, believe me, kids notice.

At the height of the bull market, when a New Jersey teenager ran afoul of regulators by touting stocks on the Internet, one worried TV-news reporter asked me how we could keep other teenagers from pulling the same stunt when it seemed so easy to make a killing in stocks (and when the kid's parents seemed willing to look the other way).

I told the reporter that one rip-snorting bear market would take care of that problem. Now I'm being asked how we can persuade kids they should invest in stocks, when the market seems risky and a lot of the people who run it look like crooks.

I believe the markets will clean up their act and restore public trust. But it would help prevent future scandals if parents brought up kids with an easily pricked conscience and a healthy fear of being caught.

The perpetrators of today's financial shenanigans, I think, are smart people who crossed the line between humility and hubris. As one of my colleagues said of Andrew Fastow, Enron's former chief financial officer who was charged with 98 counts of criminal behavior, "Nobody ever told him he wasn't as smart as he thought he was."

That New Jersey teenager's parents should have told him he was dishonest and pulled the plug on his PC.

Next: Tips on teaching kids ethics