Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 8/3) 

Editor’s Note: Liz Peek is a financial columnist and the author of wOw’s SHEconomics.

The admiring press has noted that President Obama and his wife have provided their daughters, Sasha and Malia, with a summer full of fun – but also rich with learning. They have visited the Eiffel Tower and clambered around the Pantheon – while at the same time receiving gentle lectures from Mom and Dad about slavery (in Ghana) and the sacrifices made by our military (Ft. McNair). This is an inspiring model for parents everywhere; more visits to historical landmarks and less time playing video games should be on every family’s vacation agenda. But there’s one summer ritual conspicuously missing from the White House’s program: a lemonade stand.

Our family has been lucky to spend part of every summer in a small seaside village where the local market bakes blueberry muffins and the speed limit is 20 miles per hour. Children barely out of diapers are let loose to wander the narrow shell lanes, with parents confident that their neighbors will watch out for any stragglers. More than once we have fed unknown youngsters who wandered in during the dinner hour and joined the chaotic crowd in the kitchen. In short, this summer community is small and safe, and perfect for allowing children the freedom to spread their wings.

For our family, raised primarily in New York City, this security was a blissful break from an overprotected environment, and gave rise to any number of special activities. Chief among these was the opportunity to engage in small-time entrepreneurship. That’s a fancy way of saying that my kids blew the socks off the lemonade trade. One day when my then-ten-year-old was mooning around the house complaining of nothing to do, I offered to hire him and his best friend for $2 an hour to help me do some cleaning. They took on the job with gusto, but after about 45 minutes got bored and started goofing off – so I fired them.

Initially peeved, they decided to set up a lemonade stand. They carried a table and chairs to the end of the lane where we rented a house, baked up some brownies, mixed up a pitcher of frozen lemonade and set up shop. Before long the local tour bus stopped, dozens of passengers tumbled out, and within ten minutes my son’s entire inventory was gone. Even after I charged them for "cost of goods sold," i.e., the brownie and lemonade mixes, my son and his friend walked off with $80 for about two hours’ work. An entrepreneur was born.

Silly as it sounds, figuring out how to earn real money at an extremely young age was one of my kids’ greatest summer lessons. They ventured into numerous activities, including starting up a day camp called the Happy Clams that netted a veritable fortune. They looked after (even) younger children at the beach while moms went to the market or for a run. Demand was such that they had to hire several helpers. Things were going great until the morning they devised a treasure hunt. They buried lots of toys and goodies, but then lost the lot when one of their helpers unwittingly picked up the shovel that marked the spot. Four hours of fruitless digging later, some pretty frustrated children had to be treated to ice cream, blowing the day’s budget. Another lesson learned.

Such experiences are vastly – and universally – valuable. These days we hear a lot about credit card companies and mortgage providers purposefully drowning consumers in unmanageable debt. In fact, Congress is working on a consumer protection bill that is meant to keep Americans from getting in over their heads financially. Some of the proposals will probably help, but wouldn’t it be a better idea to educate people so they can figure these matters out for themselves? How crazy is it that most young people are force-fed trigonometry but never, ever, taught to balance their checkbook? Or how to calculate interest, or work out a budget? Running a lemonade stand gives kids their first primer on the mysterious world of economics – and a good one at that.