Daily Archives: January 13, 2016

* How The Other Half Banks by Mehrsa Baradaran

I was expecting How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy to explore how the poor manage their finances, but in fact it is structured in two parts, one a detailed history of the banking system in the United States and the other a harangue in favor of a postal banking system. The history I found a little tedious, although it was interesting to see how the idea of a national bank was tried, more than once, by our supposedly infallible founding fathers — and slightly horrifying to be reminded of how just four banks hold half of all bank assets. Talk about too big to fail!

The author then quickly (and inexplicably) dismisses any other solution to the problem of the unbanked in favor of establishing a postal banking system. Certainly there are many countries that use such a system, but after the author’s rants against faceless, non-local bureaucracies, it’s a little difficult for the reader to see how the postal service could be anything but faceless and bureaucratic. It’s also unclear why she condemns private initiatives such as Walmart’s efforts to provide low-cost banking services while she deplores the fact that the unbaked spend thousands of dollars each year on financial services. And finally, in an age of online services, wouldn’t it make more sense to propose faceless but inexpensive online banking? I remain perplexed.

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