Base of the (American) Pyramid in Financial Services

December 31, 2006

No, not that pyramid – I’m talking about the vast majority of people on this planet, the very poor, viewed mostly as non-persons by even their governments. And while very few in the United States live on less than a dollar a day, as several billion around the world do, many residents of this country face similar challenges. Especially among illegal (or semi-legal) immigrants, access to officially sanctioned identity – and thus access to the broad range of services most of us take for granted in our middle-class lives (bank accounts, cell phones, etc.) is difficult or impossible.

In many less-developed countries, this is changing, and it’s only logical that similar approaches would be adopted Stateside, especially in immigrant communities. The New York Times focuses on one such approach:

Since coming to this country eight years ago, Jose Dimas has bristled at the $8 fee he often must pay to cash his paycheck. He stews over the $10 charge he faces whenever he wires $150 home to his parents in Mexico.

Daunted by the requirements to open a bank account, Mr. Dimas had long kept his savings hidden in his apartment, and had worried that his money would be stolen.

But now Mr. Dimas, 32, a food preparer at a catering company, has a new tool that has eased his discomfort with all things financial. It is a special debit card, provided not by a bank but by a nonprofit worker center here, enabling hundreds of immigrants without checking accounts or credit cards to keep their cash somewhere safer than beneath their mattresses. The card also makes it easier to shop at stores as well as online.

“This card is better for me for a lot of situations,” Mr. Dimas said. “You don’t have to pay those big charges to send money back to Mexico. And it will be much safer. I don’t like keeping my money in my home. Someone could go steal the money.”

The worker center, called New Labor, normally focuses on preaching about worker solidarity and safety, but after seeing all the hassles that immigrants face with finances, it pioneered the new debit cards. In a survey of 480 immigrants who were members of New Labor and similar worker centers, 47 percent said they had no bank accounts.

Since November, New Labor has provided cards to 200 immigrant members, including some who are here illegally. Three other centers — in Hempstead, N.Y., Chicago and Los Angeles — have begun offering the cards as well, and organizers say they hope to make them available to tens of thousands of immigrants at 140 worker centers nationwide within the next few years.

Several financial experts said the new debit cards — named “Sigo,” combining the Spanish word for “yes” and the English “go” — are an ideal tool for 30 million workers, both foreign-born and native, who lack bank accounts and often face high check-cashing fees and frustrating obstacles in paying bills.

Sigo cards can also help so-called “unbanked” immigrants develop financial sophistication and eventually move into the banking system, these experts said, perhaps to obtain a mortgage or small business loan.

“It’s not just about reducing your financial costs and making your financial life easier, it also helps give you opportunities to get ahead,” said Jennifer Tescher, director of the Center for Financial Services Innovation in Chicago, which provided a grant to develop the program. “It saves you time and makes more products and services available to you.”

Like department store gift cards, the Sigo card has stored value, but unlike those cards, it is reloadable, meaning more money can be added. Users can reload the cards by having paychecks deposited directly into their accounts or by making cash deposits — for fees ranging from 50 cents to $5 — at a local pharmacy or worker center.

The Sigo card requires a PIN number and is affiliated with MasterCard, and can be used wherever MasterCard is accepted.

Cardholders face a maximum liability of $50 if their cards are stolen.

In essence, Sigo cards create a checkless checking account, allowing bills to be paid over the Internet or by having companies deduct directly from the accounts. That can save significant time among a population of workers who often take a day off from work each month to trek from office to office to pay electricity, phone and rent bills in cash.

While many American banks require two United States government documents to open an account, immigrants can obtain a Sigo card with just one form of identification, including birth certificates, passports or other records from their home country.

Cardholders can send a second card to relatives abroad, who can then make withdrawals at a local A.T.M. Several workers said it cost $15 to send $300 to Mexico through Western Union. But with the Sigo card, the card’s sponsors say, it will cost about $4.50 — the fee for using the A.T.M. in Mexico.

Companies like Western Union and Citibank already offer similar reloadable cards, but organizers at the worker centers say they believe they are better positioned to persuade immigrants to try their card. One of the biggest issuers of such cards is NetSpend, a Texas company that lets cardholders check their balances by cellphone.

One of the most interesting aspects of this kind of development is that – well, wouldn’t you like to be able to do this? To not have to deal with banks and absurd fees and constant demands to prove you are who you say you are; to do all your financial transactions via cell phone and online? And you will, of course – but such is the nature of the world today that some of the most innovative business practices and products come first to those groups who have been, until now, entirely unserved.

It makes sense: these are, after all, “high-risk” populations, or at least populations that the established players don’t know how to talk to. So NGOs and firms without the same capitalization  – but with knowledge of the populations they’re serving – fill the breach, and  start by offering terms they know that those populations can afford and understand. Meanwhile, the established markets slog along, more-or-less unchanged (because, of course, the established players are making a healthy profit the way things are now), until either their customers start noticing these other services and demanding them of their fancy “real” bank accounts and such – or until the previously-undercapitalized new players have gotten a solid hold on the previously-underserved markets, and start looking for
new pastures to plow.

Meanwhile, their previously-underserved customers have gained a degree of financial autonomy and savvy, and start looking further “upmarket” for additional services – which maybe these firms begin to provide, and start competing directly with established players, who in turn finally notice this great “new” market under their noses that they’d so carefully avoided for so long. And maybe then, with a new consciousness of the changing nature of the financial marketplace, they start thinking about ways they can hold onto their existing customers, and maybe, just maybe, dealing with banks and credit card companies will become something slightly nicer than emergency dental surgery.

I’m not holding my breath, of course – but hey, it could happen.


On American Political Identity

December 11, 2006

In a recent column in the Washington Post, Harold Meyerson – one of the most prominent voices for labor and civil rights in mainstream American discourse – lets fly with both barrels on the issue of political identity:

…the Southern problem, it turns out, is really the Republicans’. They’ve become too Southern — too suffused with the knee-jerk militaristic, anti-scientific, dogmatically religious, and culturally, sexually and racially phobic attitudes of Dixie — to win friends and influence elections outside the South.

There was a time – there have been many times, in fact – when this sort of rhetoric was not uncommon in American discourse. But I only know this because I am a student of history – it has been quite some time since prominent voices were willing to so forthrightly speak of America’s “southern problem.” Meyerson, however, is not content to simply diagnose the specific policy manifestations of the Southern problem – he finishes his column by cutting right to the core:

So: A Southern low-wage labor system is cruising along until it seeks to expand outside its region and meets fierce opposition from higher-paid workers in the North. Does that suggest any earlier episode in American history? The past, as William Faulkner once wrote of the South, isn’t even past. And now the persistence of Southern identity has become a bigger problem for Republicans than it is for Democrats.

This is, I think it is fair to say, stunning. But it’s also encouraging. The more honest we can be about what the real issues are in our political discourse, the better.

Perhaps unsurprisingly, most of the commentary in response to Meyerson’s column – even among liberals who generally agree with the meta-message – tags him as painting with far too broad a brush. The Mahablog, however, seems to get it, and puts the column in the larger context of American identity.

The important thing to understand here is that essentialization is what a successful national politics is all about – and isn’t always a bad thing. Given the wide variation in day-to-day life among the citizens of any country nearly as large as the United States, it’s literally impossible to articulate a politics that addresses what even a plurality of citizens would independently identify as those issues most important to their lives. So mass political movements operate by using heuristics that they can count on voters unpacking in ways that make sense to them.

The Southern Strategy is an example of a particularly noxious set of heuristics; the terror-wrangling of the last few years is another. Until a month ago, these were quite successful heuristics (and one still works in Tennessee); but is there really any doubt that the “knee-jerk militaristic, anti-scientific, dogmatically religious, and culturally, sexually and racially phobic” shoe fits? And that it’s no longer so flattering a fashion?

Cultures of Authority and Presumed Guilt

December 5, 2006

Fred notes some further disturbing developments in the case of a young man suspected of stealing a PlayStation 3:

The unfortunate death of Durham teenager Peyton Strickland took an incredible turn as police revealed they used Facebook pictures to justify their paramilitary-style entry of the residence. An image provided to the media, allegedly sourced from the Facebook, shows Strickland accomplice David Ryan Mills and friends holding an array of firearms, including a shotgun and AR-15 assault rifle.

Because of this image, UNCW police requested backup from the New Hanover county SWAT team in serving the warrant. It was the SWAT team that killed Strickland, unarmed and holding a wireless game controller.

Because of an online picture, which Strickland wasn’t even in, the cops went in like they were raiding a drug supply house.

A few points:

  • In a way that I don’t think anyone could have predicted at the time, this incident goes toward proving right the conspiracy theorizing of gun-rights libertarians from the 1990s. As it turns out, paramilitary-outfitted police – as the NRA would have it, jack-booted thugsdid come in blasting, not to take away the residents’ guns but on suspicion of video game system theft.
  • I don’t want to become a one-trick “authoritarianism” pony here, but the earlier digg users’ reactions to this shooting and the actions that police apparently undertook leading to the shooting are really two sides of the same authoritarian coin. Suspicion of guilt for one crime plus legal possession of guns (entirely unrelated to the crime) added up to killing an unarmed man.

These are substantial issues, and are part of the same problem apparent in a wide range of current and recent incidents. The central issue is that cops feel empowered to use deadly and highly violent force at very early points in their confrontations with suspects. This isn’t a mistake and it’s not “bad apples” – it’s the product of a culture where suspicion of criminality is enough to negate any and all human rights. Just off the top of the newsfeed, we also have:

And the list goes on and on, and will continue to do so unless and until there emerges a political consensus – from the ground up, among Americans outraged by these behaviors who realise that there’s little to nothing keeping them from being on the receiving end of such treatment – that this is not the culture we want to be prevalent among our nation’s law enforcement officers and institutions.

Brownback 2008

December 5, 2006

In the first of what I just decided may (or may not) be a continuing series, I present the announcement statement of the latest new presidential candidate, Sen. Sam Brownback (R-KS). From [emphases added]:

Dear Friend,

I have decided, after much prayerful consideration, to consider a bid for the Republican nomination for the presidency.

I am running to spread hope and ideas. We are a blessed nation at an important crossroads. War, corruption, disintegrating families, and for some, hopelessness, tear at the American Dream. We need hope and ideas.

I am running for America…to be of service in a crucial time of trial.

Ours is an exceptional nation. A nation between two oceans made up of people from every nation on earth. A great nation united by our ideals. But we are a great nation because of our goodness. If we ever lose our goodness, we will surely lose our greatness.

We believe in a culture of life—that every human life is a beautiful, sacred, unique child of a loving God.

We believe in justice for all—at all times.

We believe in liberty.

But the central institutions that best transmit these values—the family and the culture—are under withering attack.

We must renew our families and rebuild our culture!

We need to revitalize marriage, support the formation of families, and encourage a culture of commitment.

We need a culture that encourages what is right and discourages what is wrong—and has the wisdom to understand the difference.

Each generation of Americans is called upon to carry the torch of virtue during its brief season. If one generation lets the torch fall, its light is extinguished for all future generations. That’s a big responsibility, but we can achieve it if we pick up the torch with courage, generosity, and realism. We must meet and fulfill the job we are called to accomplish in our day. The time to act to insure our future as a nation is now.

Problems abound. The federal government wastes and spends too much. We lack compassionate yet practical programs to help the poor here and around the world. We need energy independence and alternative, clean-burning, domestic-grown fuels. The scourge of cancer has killed too many and must be stopped. We need term limits for judges and members of Congress like we have for the President. We need a flat tax instead of the dreadful, incomprehensible tax code we now have.

And we need humility.

While I am proud to be an American, when I consider my citizenship and the responsibilities it carries today in the light of eternity, I am more humbled by it. We have been given much and will be held to account for what we have been given.

I ask mostly for your prayers. Pray for America, that our division as a people might end and that our land be healed.

Thank you for your interest and support. Thank you for your prayers. Please join our campaign of national renewal and hope for the future!

God Bless you, and God Bless this nation we love so dearly,

[Sam Brownback]

What I am about to say, I say not out of malice but rather honesty: this announcement reads like it was written by a person of the barest literacy. Consider:

  • We need hope and ideas.
  • I am running for America…to be of service in a crucial time of trial.
  • If we ever lose our goodness, we will surely lose our greatness.
  • While I am proud to be an American, when I consider my citizenship and the responsibilities it carries today in the light of eternity, I am more humbled by it.

These are not the words of a thoughtful person – they are not even the standard political aphorisms of a campaign announcement. Of the above, two are not even sentences. These are third-rate empty thoughts, and the crudest sort of identity politics. Brownback’s invocation of the “light of eternity,” and the “culture of life”; his plea that the family and the culture are “under withering attack”; his use of the word “prayerful” and multiple requests and thanks for supporters’ prayers; these all signal that yes, he is a Christian. But little else is revealed through this announcement, and little sign of his previous political career is mentioned.

“War, corruption, disintegrating families, and for some, hopelessness, tear at the American Dream” – but no mention is made of what role Brownback might have had in either enabling or alleviating these conditions. Not that this is surprising – Brownback has been an unwavering cheerleader and supporter for the war and, as a Republican, has been until now both silent on and a beneficiary of the rank corruption in the modern GOP. If he is now planning a change of course, kudos to him – but more likely he is simply attempting to tap into the generalized frustration over these issues without engaging the substance of Americans’ complaints.

But perhaps the most bizarre mention is Brownback’s invocation of the “scourge of cancer.” Not that cancer isn’t an awful thing – it is – but what exactly does this mean? Why is Brownback invoking cancer – is there an unnamed Republican (or Democrat) who actually supports “the scourge of cancer”? Of course not. Cancer research – but nothing that includes stem cells or anything like that – is one of Brownback’s “signature issues.” And good for him. But “cancer research,” viewed alone and as an abstraction, is simply not an issue that rises to the level of national importance. Health care, however, is an issue of national importance, but Brownback, as a right-wing Republican – whose positions on social issues are in line with Christian nationalists and whose fiscal policies are in line with corporate America (especially insurance and pharmaceutical interests) – has nowhere to go on this issue. A comprehensive reform of the health care system would involve an acceptance of science unacceptable to the former, and an economic restructuring unacceptable to the latter. And so, again, he invokes the spirit of an issue of concern to Americans while avoiding any sort of responsibility for – or answer to – the situaiton.

Sam Brownback will not be President. But based on this amateurish announcement of his candidacy, he may prove to be a useful lens through which to view the intellectually feeble and dishonest level at which much of our political discourse takes place.

The Revolution Will Not Be Blogged

December 3, 2006

Nothing to add to this:

If Only Empathy Was Java-Enabled

That’s the problem with these messianical internet types. Their intense enthusiasm for the web’s democratic properties is really, by virtue of it being a computer-accessible medium that offers the greatest rewards to the earliest adopters, an intense enthusiasm for further channels through which educated white guys can get rich, grow famous, and enhance their speaking fees. They’re very interested in the expansion of opportunity for guys like them. Not so much in the crushingly hopeless existences of others.

Yahoo! and the Identity of Things

December 2, 2006

I’ll admit that Yahoo!‘s purchase last year of Flickr and has long been a source of speculation and excitement for me. I wasn’t quite sure what they were doing, but I felt it had to be something pretty cool.

Now comes at least part of the answer:

If you like the Wii, you’ll love Yahoo’s new Wii portal, which aggregates Flickr photos, games, avatars with custom Wii gear, links from and MyWeb, stories from Yahoo’s Games section, Wii-related questions from Yahoo Answers and links to buy consoles and games on Yahoo Shopping. It’s the first of many sites in Yahoo’s “brand universe”, says Variety, and the plan is to roll out over 100 more of these fan sites during 2007, each one focused around a popular brand. They can then use these niches to sell targeted advertising. And while Yahoo isn’t seeking the approval of the brands themselves, they hope that these companies will play ball and provide them with some extra content in exchange for promoting the brand. Future portals could include “American Idol” and “The Lord of the Rings”, according to Yahoo. Just like the relaunch of Yahoo Food and Yahoo TV, these portals might help Yahoo to bring together some of their scattered social offerings. Since Flickr and have such unique identities, it wasn’t clear how they’d be integrated into other services: now it seems they’ll be treated as huge, free content repositories.

This is really exciting for a couple of reasons:

  • The focus is on user-centric identity and evaluation. By basing the content of each of these channels of the “brand universe” on Flickr and users’ content and assessment of products, the products become not about themselves but instead about how people use and talk about them, and how they’re important to their lives. In a recent column on the future of publishing, Cory Doctorow said the following:

“The thing about an e-book is that it’s a social object. It wants to be copied from friend to friend, beamed from a Palm device, pasted into a mailing list. It begs to be converted to witty signatures at the bottom of e-mails. It is so fluid and intangible that it can spread itself over your whole life. Nothing sells books like a personal recommendation…”

And that’s exactly right, but it’s true even beyond e-books. All cultural objects and phenomena are social. The Mona Lisa is a beautiful painting, but what makes it GREAT is all of the millions of words written about it; all of the millions of trips to the Louvre that people have taken – all of the many things that people do and say and create because of that one painting. The Nintendo Wii is no different, really: it’s just a bucket of wires in a cool case. What makes it worthwhile as a cultral object is the experiences that people have with it and what they say about those experiences, and this method of organization recognizes that central fact.

  • Yahoo! seems to understand the power of the second economy (aka, “(a) amateur economy, (b) sharing economy, (c) social production economy, (d) noncommercial economy, or (e) p2p economy”) and the potential for a hybrid economy. By making each of these channels in the “brand universe” more about those who are using and doing things with cultural objects, it enables those members of the second economy to gain greater exposure and, potentially, commercial viability of their own right in the first economy.

People identify themselves in many different ways, and one of those ways is through the things that they use and enjoy. There’s no shame in that, necessarily – after all, “things” are, in their inception, dreamed up by and created by other people. For as long as consumer products have existed, they have been adopted by people and often modified from their original purpose in ways that assert individual identity. This latest effort by Yahoo! acknowledges that central fact of consumer culture: that things become what people make of them, and that what people make of things is valuable, sometimes more valuable than the thing itself.

Entrance Papers

December 1, 2006

via Tristero comes the following AP story:

Without their knowledge, millions of Americans and foreigners crossing U.S. borders in the past four years have been assigned scores generated by U.S. government computers rating the risk that the travelers are terrorists or criminals.

The travelers are not allowed to see or directly challenge these risk assessments, which the government intends to keep on file for 40 years.

Virtually every person entering and leaving the United States by air, sea or land is scored by the Homeland Security Department’s Automated Targeting System, or ATS. The scores are based on ATS’ analysis of their travel records and other data, including items such as where they are from, how they paid for tickets, their motor vehicle records, past one-way travel, seating preference and what kind of meal they ordered.

…to David Sobel, a lawyer at the Electronic Frontier Foundation, a group devoted to civil liberties in cyberspace: ”It’s probably the most invasive system the government has yet deployed in terms of the number of people affected.”

Government officials could not say whether ATS has apprehended any terrorists. …

The government notice says some or all of the ATS data about an individual may be shared with state, local and foreign governments for use in hiring decisions and in granting licenses, security clearances, contracts or other benefits. In some cases, the data may be shared with courts, Congress and even private contractors.

”Everybody else can see it, but you can’t,” Stephen Yale-Loehr, an immigration lawyer who teaches at Cornell Law school, said in an interview.

…A post-9/11 law vastly expanded the program, he said. It required airline and cruise companies to begin in 2002 sending the government electronic data in advance on all passengers and crew bound into or out of the country. All these names are put through ATS analysis, Ahern said. In addition, at land border crossings, agents enter license plates and the names of vehicle drivers and passengers, and Amtrak voluntarily supplies passenger data on its trains to and from Canada, he said.In the Federal Register, the department exempted ATS from many provisions of the Privacy Act designed to protect people from secret, possibly inaccurate government dossiers. As a result, it said travelers cannot learn whether the system has assessed them. Nor can they see the records ”for the purpose of contesting the content.”

The Homeland Security privacy impact statement added that ”an individual might not be aware of the reason additional scrutiny is taking place, nor should he or she” because that might compromise the ATS’ methods.

Nevertheless, Ahern said any traveler who objected to additional searches or interviews could ask to speak to a supervisor to complain. Homeland Security’s privacy impact statement said that if asked, border agents would hand complaining passengers a one-page document that describes some, but not all, of the records that agents check and refers complaints to Custom and Border Protection’s Customer Satisfaction Unit.

Homeland Security’s statement said travelers can use this office to obtain corrections to the underlying data sources that the risk assessment is based on, but not to the risk assessment itself. The risk assessment changes automatically if the source data changes, the statement explained.

”I don’t buy that at all,” said Jim Malmberg, executive director of American Consumer Credit Education Support Services, a private credit education group. Malmberg said it has been hard for citizens, including members of Congress and even infants, to stop being misidentified as terrorists because their names match those on anti-terrorism watch lists. He noted that while the government plans to keep the risk assessments for 40 years, it doesn’t intend to keep all the underlying data they are based on for that long. [emphases added]

There’s something funny here. Not ha-ha funny, though. This is a very clear vision of DRM America: all travellers first are presumed to be criminals, and scored via a secret, proprietary method. In this vision the state, not the citizen, holds all of the rights: rights in terms of liberty, and in terms of access to information. The state gathers this information in order to decide when you – a citizen – can travel, and where; they then control access to the information – the “score” – and to the processes leading to the formulation of the score, and disseminate the information to those entities – other governmental agencies, private industry, but not you, citizen – which it deems ought to have the information.

There are many avenues for challenging these procedures – possible violations of the Fourth and Sixth Amendments, for starters, and the numerous statutes governing the duration that government agencies can retain information gathered on citizens which is not immediately relevant to criminal investigations – but the most troubling aspect of this program is its very existence. Somebody – many somebodies – thought this was a good idea. It’s possible that these were actions taken without sufficient thought given for their implications, but I feel the more likely explanation is that these actions and this program are perfectly consistent with the vision of the world and this country held by those who imagined and implemented them.

Just to be clear – that’s bad. It’s dangerous for its own sake – why create a police state unless you have intention of using it? – but also for the general attitude that it seeks to promote: that rights are not vested in the individual but in the state, which then grants its citizens “rights” on a contingent basis, to be revoked or renegotiated (by and for, the state) at any time which the state wishes.