Review: How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy

How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy by Mehrsa Baradaran
My rating: 5 of 5 stars

Ironically, I know of the author because of her book reviews here on Goodreads, which I follow and enjoy reading quite a bit, so when I saw her book on sale, I bought it right away. 

This book does a great job showing how Banks are not solely private enterprises, nor are they public, but they are (and need to be) a hybrid. They are codependent with the government, which, unfortunately, tends to give banks the upper hand. If banks risk going out of business, the government will step in, but the concentration is "on making banks profitable again", rather than providing a more public good to those in need. This, of course, creates confusion, which once again gives banks the upper hand. 

I appreciate the history of the banking industry, from the 1600's in Europe to Jefferson vs. Hamilton up to modern times. Also the history of credit unions, savings & loans, etc. 

The argument seemed quite convincing to me (although seasoned economists might poke holes in it I guess). The conclusion is then that Postal banks would be an optimal solution. Having grown up in Switzerland, I am a huge fan of Swisspost, which I think is the best type of Swiss bank account (despite the other types being famous for many reasons). In fact, all Swiss people have at least one postal account. So my initial reaction is to agree. Many of the benefits she lists are evident in Switzerland. However, I still hesitate to think it will work well in the US. Aside from the Politicians likely to call it "socialist", and other banks sure to be against it, I'm not all that sure the USPS is well-equipped enough to handle it. Maybe we could start with the USPS issuing certified e-mail (like Switzerland and Italy and other countries have), and if it can handle that change, then maybe it can pivot into banking services. 

Regardless, this book shows very clearly that the banking system in the US has very serious issues. 

4.5 Stars

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