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Fri, Jun. 16th, 2017, 01:40 pm
Nonfiction: the Oatmeal, unbanked in the US, learning better, gender & innovation

Matthew Inman/The Oatmeal, If My Dogs Were a Pair of Middle-Aged Men: What it says on the tin. I laughed by the end. Probably funnier for dog people; it certainly does something to your perceptions to see two tiny middle-aged men in tighty-whities acting like dogs, even in cartoon form.

Lisa Servon, The Unbanking of America: How the New Middle Class Survives: The new middle class that Servon describes isn’t, really. That is, its members may have good incomes, but even if they do they lack significant savings or other wealth, and often job security as well, and thus they are vulnerable to sudden shocks. Servon talks to one man whose database of consumers with subprime credit scores included many with relatively high incomes, college degrees, and homes in their own names; seven years ago, the people in his database experienced a “destabilizing event”—job loss, health issue, car breakdown—every 87 days, but it’s down to every 30 days now. Americans are spending more than they earn because they’re earning less than they need to live. (I also didn’t know that as recently as 2012 data showed that women continue to pay more than men for credit cards.)

After the financial crisis, many more Americans dropped checking and savings accounts; banks don’t want people as customers unless they can provide expensive services or charge high fees to those people and so using a check cashing place can seem much more sensible—at least you know what the prices are instead of getting surprised by them, and you aren’t at risk of hundreds of dollars of overdraft fees. Banks may also deny people the ability to open accounts if there’s any history of overdrafts—more than one million people have been deemed ineligible for bank accounts because of new software tracking bounced checks etc. The idea of a checking account as an indicator of financial stability no longer makes sense, even though policymakers are still acting as if it did. Unless there are significant changes in banking, Servon contends, thinking of people as “underbanked” wrongly implies that they’re making bad choices. (Servon notes that regulators actually encouraged banks to rely more on fees to make themselves less vulnerable to interest rate shocks. Once banks saw how profitable overdraft and other fees were, however, they were hooked. And the average charge for overdrafts and ATM fees has shot up over the past decade.)

As for credit cards, deceptive practices and other problems made credit cards not a great idea for many people. Companies have severely dropped the limits for “risky” cardholders, down to $500 for the most risky. And when you have a lower limit, your use is a greater percentage of your available credit, which lowers your credit score. Over half of African-American middle-class households had at least one credit card cancelled, a lowered credit limit, or a denial of a credit card after the financial crisis. Servon also points out that many people who use payday loans with their huge interest rates have unused credit on their credit cards—but this makes sense to them because they don’t want to use up their last source of emergency credit, if something else happens. Plus, failure to repay a payday loan doesn’t decrease a consumer’s credit score, while failure to repay a credit card does. Servon concludes that it’s just not clear whether the benefits of payday loans outweigh the costs (but in the end discusses ways of getting cheaper financial services to the same borrowers). Compared to states that don’t ban payday lending stores, households in Georgia and North Carolina, which do, bounced more checks, filed more FTC complaints about debt collectors, and filed for bankruptcy more often. Colorado limited payday loans in certain ways, such as banning lump sum loans that have to be repaid in full; on average, payday loans in Colorado take only 4% of a borrower’s paycheck, and Colorado borrowers spent 42% less on loan fees and the number of rollovers—new loans used to pay off old—decreased by more than half.

Among other places, Servon worked at a check cashing place where people appreciated clarity and convenience—immediate money to pay the bills instead of waiting three or more days for a check to clear. This was important, among other things, to small employers who needed to pay their employees right away. Check cashers also prioritized customer service, which traditional banks no longer do. Servon also investigated informal savings schemes—tandas, where largely Latina women each put in a certain amount of money every week, and then every week one woman gets the others’ contributions—a way to force oneself to exercise savings discipline/avoid pressure from family and friends wanting to borrow cash on hand. Tanda bankers get tipped but they also have to make sure that the participants are reliable. The tanda banker Servon followed also made loans which didn’t bear interest but, when paid off, came with additional “gifts” of money (in true Viviana Zelizer fashion; just like the tanda payoffs themselves, this was a different “kind” of money that was earmarked for specific things). Tandas also have risks; Servon tells one story of a tanda in which the banker just ran off with the cash. And, of course, even successful tandas don’t build credit in the mainstream economy, so users remain more isolated form the formal economy than they perhaps could be.

Servon also has a chapter just about millennials, whose financial insecurity is, among other things, hampering their ability to build social capital—attending a friend’s wedding can mean financial strain for momths. Millennials feel they have to choose between retirement, a house, or kids—pick one. The problem, she reiterates, isn’t “underbanking”—it’s underfunding. “Most people have very good reasons for doing what they do with their money.” People need more stable incomes, and financial services can only be a small part of that, though she does write about various entrepreneurs trying to use digital services to reach people underserved by mainstream banks.

Ulrich Boser, Learn Better: Some formal research on the tools for successful learning that aren’t themselves taught; there are few shortcuts, but there are lots of ways to waste time and not learn much (like highlighting/rereading and not self-testing, or working on small bits multiple times and then moving on rather than testing yourself on lots of stuff at once—the difficult retrieval makes for better long-term memory). Unfortunate presence of weird errors, though, including using the syllogism about Socrates and mortality to illustrate the concept of a Venn diagram, so each of three partially overlapping circles is labeled, respectively, “men,” “mortal,” and “Socrates.” Nooooooo! But I did learn about a paper titled“You Do Not Talk about Fight Club if You Do Not Notice Fight Club,” about attentional blindness. And there’s good stuff about the importance of making, and learning from, mistakes; the role of practice, spread over time; and the uses of metacognition: thinking about how you think, what you know already about a subject, what you’re struggling with. I’m thinking about trying to incorporate the end-of-class questions “What did I learn? What was hard to understand? What seems unclear?”

Research Handbook on Gender and Innovation, eds. Gry Agnete Alsos, Ulla Hytti, & Elisabet Ljunggren: Mostly about the Nordic countries; innovation is gendered in lots of ways, including what gets called innovative in the first place and whose ideas get listened to. Various chapters explore the literature on the gendering of innovation and recount case studies, for example of innovation in nursing schedules; men and women working in innovative nursing related businesses emphasized altruism/better care-taking, which served to change the gendered meanings of change in business form. There was a particularly sad/funny story about Sarah, a materials scientist who created a process that made highly refined titanium dioxide, which turned out to be really interesting to the cosmetics industry. Sarah faced attempts to seize control of her research group from male colleagues—but they backed off after she successfully brought this new highly profitable source of revenue in as major purchasers; titanium oxide had become girl stuff.

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