The Energy 202: Study renews debate about a radical climate solution – geoengineering

THE LIGHTBULB — Trump signs major public lands legislation: —Darryl Fears More reaction: — Corn wars: — Top labor group criticizes the Green New Deal: — Trump challenges climate science in yet another tweet: — Zinke cleared of accusation he tried to interfere with Pennsylvania election: — Food stamp cuts in hurricane-stricken Puerto Rico: — Stormy weather ahead in the Central U.S.: Today Coming Up — “Unprecedented” avalanche onslaught in Colorado:

THE LIGHTBULB
The idea of artificially modifying the Earth’s climate to reverse human-driven global warming has gotten a pretty bad rap.
There’s the worry that geoengineering is a “moral hazard” — because just knowing there’s a technological fix available could induce us to pollute even more.
And there’s the concern that one prominent geoengineering technique — filling the Earth’s stratosphere with special particles such as sulfate that cool the planet by reflecting back some sunlight into space — could trigger other unwanted consequences. Critics say it could, for instance, reduce rainfall in some locations.
New research released this week, though, could assuage some of these concerns enough to spark renewed interest in geoengineering.
But at the same time, it’s reawakening a fraught debate over the wisdom of using technological interventions — rather than simple cuts in greenhouse gas emissions — to reduce global warming.
A Harvard University study led by Peter Irvine found that geoengineering the climate to cut global warming in half — by managing how much sunlight reaches the Earth — would not lead to disproportionate or unjust impacts around the globe.
The study in Nature Climate Change uses a high-resolution climate model called HiFLOR from the National Oceanic and Atmospheric Administration’s Geophysical Fluid Dynamics Laboratory. This model has recently produced some concerning results about hurricanes, which it finds are intensifying more rapidly in the Atlantic region because of human-caused climate change.
In this high-powered model, the study found, geoengineering the climate by reducing the sunlight reaching the Earth didn’t seem to produce many significant disparities between different regions, such as a higher occurrence of droughts in some parts of the globe.
“The big conclusion is that, with a model that really should do a better job on regional climate, that the level of inequality is really stunningly low,” said David Keith, a Harvard geoengineering researcher who co-wrote the paper.
Keith is not proposing that we actually geoengineer the climate based on this or any other study — just that the idea warrants more research.
“What I think it says is there is enough reason to believe there might be something worthwhile here, that the world should take a much more serious look,” he said.
Ken Caldeira, a scientist at the Carnegie Institution for Science in Stanford, Calif., is another geoengineering expert who was not involved in the study. He said the findings are consistent with other work.
“The climate models project that for ‘reasonable amounts’ of aerosols injected into the stratosphere, most climate change can be offset for most people most of the time,” Caldeira said in an email.
But that’s different, he noted, from whether we should trust these models to make big decisions about geoengineering actions.
“Do we believe the physical climate models enough to want to intentionally tinker in very complicated natural systems?” Caldeira asked.
Other scientists had similar reactions:
But though the study is being used to support more research rather than immediate intervention, it has still prompted critical reactions.
Alan Robock, a Rutgers University researcher who has also studied geoengineering, argued that since the study presents an idealized version of geoengineering in a climate model — reducing solar radiation affecting the Earth directly, rather than injecting any substance in the atmosphere to accomplish this effect — it avoids some more concerning implications.
“There is no way to do what they modeled, as we cannot turn down the Sun,” Robock wrote in an email. “The technology to create an aerosol cloud in the stratosphere does not currently exist. Various designs have been described that would cost $50,000,000,000 to $200,000,000,000 (50-200 billion dollars) per year to implement, and which would result in significant increases in acid rain as well as a host of other possible risks.”
Robock wasn’t the only one to point this out.
Those who want to keep researching geoengineering do have this in their favor — the fact that few other big solutions seem on the horizon.
Global warming has been on a tear lately and significant global emissions cuts have still not materialized. If anything, a number of countries, such as the United States and Brazil, have been moving away from promises.
Solar and wind are growing fast, but no one thinks they’re growing fast enough. And although technologies exist to remove carbon from the atmosphere, they would require an extreme scale-up to make a difference. They’re still very far away, in other words.
As global warming continues to advance and nears the critical threshold of 1.5 degrees Celsius — and as more people grasp the implications of that — geoengineering probably will continue to come up for discussion.
— Trump signs major public lands legislation:
The John D. Dingell Jr. Conservation, Management and Recreation Act, named after the longest-serving congressman, a Michigan Democrat, also creates monuments to civil rights heroes and an icon of the civil rights movement, Medgar Evers. According to the Interior Department, which oversees most of the nation’s public lands, the 650-page act is composed of 100 individual bills introduced by half of the Senate and a few House members.
“This law will benefit every state, said Sen. Lisa Murkowski (R-Alaska), chair of the Energy and Natural Resources Committee. Her optimism was shared by an opponent, Joe Manchin III (D-W.Va.). “This legislation is an important reminder that when we work in a bipartisan way, the American people come out on top.”
—Darryl Fears
More reaction:
In a statement, the National Wildlife Federation reiterated the importance of the package but challenged the administration’s commitment to public lands, pointing to Trump’s proposed budget. “This milestone ironically coincides with the release of the administration’s budget, which shows the president is not putting his money where his mouth is,” Tracy Stone-Manning, associate vice president for public lands at the federation, said in a statement. “He recommended just $8 million for land purchase — a pittance of what is needed to provide public access and protect our resources.”
The Center for Western Priorities called it “something every American can celebrate” but also pointed to the administration’s other actions:
Sen. Steve Daines (R-Mont.) :
Trump’s son Donald Trump Jr.:
— Corn wars:
Sen. Joni Ernst (R-Iowa) praised the proposal:
— Top labor group criticizes the Green New Deal:
In a letter to Sen. Edward J. Markey (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.), Cecil Roberts, president of the United Mine Workers of America, and Lonnie Stephenson, president of the International Brotherhood of Electrical Workers, called the deal “not achievable or realistic.” “We will not stand by and allow threats to our members’ jobs and their families’ standard of living go unanswered,” they wrote.
Sen. John Barrasso (R-Wyo.) tweeted his agreement:
In a tweet, Markey pushed back:
— Trump challenges climate science in yet another tweet:
Greenpeace also said Moore is not a co-founder but a “‘a paid spokesman for a variety of polluting industries for more than 30 years,’” CNN reports. “Moore, who is not a climate scientist but who has degrees in forest biology and ecology, played a significant role in Greenpeace Canada for several years early in the organization’s existence, according to Greenpeace’s website, but he did not help found it.”
— Zinke cleared of accusation he tried to interfere with Pennsylvania election:
— Food stamp cuts in hurricane-stricken Puerto Rico:
— Stormy weather ahead in the Central U.S.:
Today
Coming Up
— “Unprecedented” avalanche onslaught in Colorado:


Describe a specific geoengineering technique to manage climate change.

Describe solar radiation management as a technique to reduce global warming.  Other geoengineering techniques, such as carbon dioxide reduction, are not relevant. Documents related to temperature are also not relevant.

Explain a specific geoengineering method related to this question.

How technology is fighting to prevent a climate-change apocalypse

(Chris Ratcliffe/Bloomberg)
On Monday, the UN Intergovernmental Panel on Climate Change released an apocalyptic report about the impact of global climate change — suggesting that a hotter, drier Earth brought about by global climate change could lead to everything from famine and civil war to the acidification of the earth’s oceans, ecological crises and disappearing coastal cities. That begs the question, of course: What can Silicon Valley and other tech innovators do to slow or reverse the climate-change apocalypse?
For now, Silicon Valley has focused on the search for a relatively cheap, reliable clean energy solution that can slow down the planet’s consumption of fossil fuels – and by extension, slow down the impact of global climate change. Venture capitalists are still investing hundreds of millions of dollars in “cleantech” companies. Some of the leading minds – such as Elon Musk and Bill Gates – are backing innovative projects and companies to make clean energy mainstream. Innovative companies like Google are looking into ways to power themselves with the sun and the wind. The hope, of course, is that one of the most popular clean energy options – solar, wind or nuclear – can ultimately become a cheap, reliable source of carbon-free power that will wean humanity off fossil fuels.
That’s just the tip of the (melting) iceberg, though, when it comes to what innovators are dreaming up to reduce the impact of global greenhouse gases. One of the most talked-about ideas in the energy sector includes carbon capture and storage — a largely unproven technology that essentially takes some of the carbon being burned from traditional fossil fuels such as coal, and converts it into a harmless gas underground so that it doesn’t enter the atmosphere. And there’s always carbon recycling – an outrageous scheme to extract carbon dioxide from the atmosphere and recycle it for fuel, the same way you might recycle plastic bottles or paper.
Where things get really interesting – and extremely controversial – is when you start talking about geoengineering, which is essentially the ability to change the earth’s climate using man-made means. Up until a few years ago, even mentioning geoengineering could get you branded as an irresponsible scientist. Just consider some of the schemes that have been proposed: arraying giant mirrors in outer space to reflect solar rays, sprinkling the Arctic with a layer of dust, embracing volcanic ash as a cooling mechanism for the planet, and spraying the stratosphere with sulfur dioxide particles.
Yes, there’s a reason why geoengineering is usually referred to as “Planet Hacking” – people are trying to hack the planet in search of better solutions. Unlike a Silicon Valley hackathon, though, an extended planet hackathon could end up wrecking the Earth. Yet, that doesn’t stop the military scientists at DARPA from coming up with big ideas that might just save the planet. At the end of the day, are these “planet hacking” schemes any more fanciful than some of the ideas being espoused by NASA for terraforming alien planets?
At this point, of course, it’s easy to throw one’s hands up and conclude that nothing much can be done to prevent the apocalypse. Either the plans to save the planet are too gradual and won’t save us in time – or they are too speculative and untested and may end up wrecking the planet in the process. And, given the global nature of the problem, that means that even if Elon Musk’s Teslas are the only cars on American highways and every American house has a few solar panels on the roof, it won’t do much if America’s friends around the world aren’t also doing their fair share.
As long as many people continue to doubt the science behind global warming and as long as most people don’t believe that the planet could suffer a Sixth Extinction, then it’s likely we’ll muddle through with a bunch of expensive technology patches. They can be thought of as “adaptation strategies” – short-term solutions that help humanity win the “survival of the fittest” while the planet steadily warms. Rising sea levels? No problem, just build new types of sea walls. Crops failing and a lack of food? Just bio-engineer new foods in the lab or create them with 3D food printers. Species disappearing? Just bring them back via de-extinction.
But there is hope for a brighter future than just accepting a slow, steady march to extinction. In a best-case scenario, many of the developing countries that are growing rapidly will actually skip fossil fuels altogether and shift immediately into clean energy. That could have a tremendous impact in places like China and India, where billions of new people will need a cheap source of clean power. At the same time, one of the big ideas for dealing with greenhouse gases in the atmosphere might actually pay off. And that might buy us enough time so that we don’t have to resort to the really innovative solution that nobody want  to discuss — and that’s leaving the planet forever in search of another Earth-like planet that we can colonize.


Elite science panel calls on U.S. to study climate modification

X-rays stream off the sun showing observations from NASA’s Nuclear Spectroscopic Telescope Array, or NuSTAR, overlaid on a picture taken by NASA’s Solar Dynamics Observatory. (AFP/NASA/JPL-Caltech) The first thing to understand about geoengineering — intentional modification of the climate system to counter the effects of global warming — is that we shouldn’t even be having a conversation about geoengineering. Just convening that conversation — which has gained a new megaphone, thanks to a report just released by an expert panel assembled by the National Research Council of the U.S. National Academy of Sciences — in a sense means that we’ve failed to reduce carbon dioxide emissions enough to prevent the risk of dangerous climate change. And thus, we’ve also failed to take geoengineering off the table. The National Research Council recommends — very reluctantly, and only for purposes of increasing our knowledge — government-sponsored research into so-called albedo modification, sometimes also called solar radiation management (a term the committee preferred not to use). Tens of millions of tons of sulfate aerosol, for instance, could offset a doubling of carbon dioxide in the atmosphere. But there would be unknown knock-on effects, ranging from changing global precipitation patterns to ozone depletion. And they would be unevenly distributed across the world, the panel noted, potentially sparking controversy over inequitable consequences, much as global warming itself does now. Here’s a visualization of some possible strategies for albedo modification: “They don’t want any deployment right now, but the fact that they think there’s a need to do the research, and get organized, to me is the most important thing,” says Rafe Pomerance, a former Clinton administration State Department official on environment and development and a current member of the National Academies’ Polar Research Board. “The issue is getting a lot more attention.” The scientists make clear that they would consider any deployment of geoengineering techniques like albedo modification to be reckless, given inadequate knowledge of the downstream consequences. Indeed, they write, artificially changing the Earth’s reflectivity at all would be “irrational” without trying to cut down on carbon dioxide, as well. That is especially the case in that albedo modification is only a bandage that doesn’t make the underlying problem — carbon dioxide — go away. If you were to ever stop geoengineering after starting it, global warming would snap right back. Nonetheless, the committee did recommend U.S. government-sponsored research on the matter to learn

X-rays stream off the sun showing observations from NASA’s Nuclear Spectroscopic Telescope Array, or NuSTAR, overlaid on a picture taken by NASA’s Solar Dynamics Observatory. (AFP/NASA/JPL-Caltech)
The first thing to understand about geoengineering — intentional modification of the climate system to counter the effects of global warming — is that we shouldn’t even be having a conversation about geoengineering.
Just convening that conversation — which has gained a new megaphone, thanks to a report just released by an expert panel assembled by the National Research Council of the U.S. National Academy of Sciences — in a sense means that we’ve failed to reduce carbon dioxide emissions enough to prevent the risk of dangerous climate change. And thus, we’ve also failed to take geoengineering off the table.
The committee was chaired by Marcia McNutt, the editor-in-chief of Science and formerly the director of the U.S. Geological Survey, who said in a released statement, “That scientists are even considering technological interventions should be a wake-up call that we need to do more now to reduce emissions, which is the most effective, least risky way to combat climate change.”
The National Research Council recommends — very reluctantly, and only for purposes of increasing our knowledge — government-sponsored research into so-called albedo modification, sometimes also called solar radiation management (a term the committee preferred not to use).
“Albedo” is a scientific term that refers to reflectivity — in this context, how much the Earth bounces light away and back to space. Thus albedo modification means altering reflectivity of the planet, for instance by injecting large volumes of sulfate particles into the middle atmosphere, so as to deflect sunlight away before it gets to us here at the surface, and thereby induce a global cooling.
In effect, this would be like installing an artificial thermostat to turn down the Earth’s dangerously rising temperature — last year was the hottest on record — by banishing some of the energy streaming to us from the sun. We know that it would work, researchers say, because we know that large volcanic eruptions cool down the planet by physically similar means.
Tens of millions of tons of sulfate aerosol, for instance, could offset a doubling of carbon dioxide in the atmosphere. But there would be unknown knock-on effects, ranging from changing global precipitation patterns to ozone depletion. And they would be unevenly distributed across the world, the panel noted, potentially sparking controversy over inequitable consequences, much as global warming itself does now.
Here’s a visualization of some possible strategies for albedo modification:

“They don’t want any deployment right now, but the fact that they think there’s a need to do the research, and get organized, to me is the most important thing,” says Rafe Pomerance, a former Clinton administration State Department official on environment and development and a current member of the National Academies’ Polar Research Board. “The issue is getting a lot more attention.”
The scientists make clear that they would consider any deployment of geoengineering techniques like albedo modification to be reckless, given inadequate knowledge of the downstream consequences. Indeed, they write, artificially changing the Earth’s reflectivity at all would be “irrational” without trying to cut down on carbon dioxide, as well. That is especially the case in that albedo modification is only a bandage that doesn’t make the underlying problem — carbon dioxide — go away. If you were to ever stop geoengineering after starting it, global warming would snap right back.
Nonetheless, the committee did recommend U.S. government-sponsored research on the matter to learn more about its “risks and benefits.” It pivoted toward doing so with a crucially hesitant sentence that bears parsing and rereading: “The Committee argues that, as a society, we have reached a point where the severity of the potential risks from climate change appears to outweigh the potential risks from the moral hazard associated with a suitably designed and governed research program.”
For a long time, even discussing geoengineering had been considered a “moral hazard” by some, because it could undermine actions to address the root causes of the problem — carbon dioxide emissions.
Overall, the report represents a “big tent” approach, notes Raymond Pierrehumbert, a geophysicist at the University of Chicago who served on the committee, suggesting a range of views among the participating scientists (there were 16 committee members).
“One of the best things that could come out of the NRC report is to just alert people to the fact that unrestrained emissions could make the world so bad that we might do something like albedo modification just out of desperation,” says Pierrehumbert.
Reasoning that there are many scenarios in which we would need to know more about artificially changing the Earth’s reflectivity — for instance, if a rogue state decides to try it — the committee recommended that the U.S. Global Change Research Program head up studies on the matter, and that the research be performed in such a way as to simultaneously increase our basic knowledge of the climate system.
The recommendation includes conducting “small-scale field experiments” with “controlled emissions” — provided it is clear that they are too localized and minuscule in scale to have any significant climatic effect. All of this would need to occur, notes the committee, under the aegis of a deliberative process about how to govern geoengineering research, to ensure ethical considerations are weighed and to balance risks and benefits.
The National Research Council report was sponsored by a number of U.S. science agencies and also the U.S. intelligence community. In a separate report, the National Research Council explored the subject of carbon dioxide removal, which is considerably less controversial, and is mainly held back at the moment by technological and cost considerations. Here, the idea is deploying technologies to actively remove the carbon dioxide that is in the atmosphere as a result of human emissions, which would also induce a cooling effect if deployed at adequate scale:

The two reports arrive following a dramatic growth in scientific publications and discussion about geoengineering over the past decade — fanned by climate concerns. The British Royal Society also recommended government-sanctioned and organized research into geoengineering in a report in 2009.
Up until now, the research studies on geoengineering published in scientific journals have generally relied upon computer simulations to study the hypothetical effects of various kinds of interventions. True outdoor experiments that change the world, rather than a simulacrum of it, are another matter — but if the framework outlined by the National Research Council were to be adopted, they could go carefully forward.
One researcher who has been thinking about such experiments is Jane Long, who was an associate director at the Lawrence Livermore National Laboratory and co-chaired the Bipartisan Policy Center’s study of geoengineering in 2011. In particular, she has considered small-scale experiments to explore marine cloud brightening, another albedo modification technique.
The idea here is that if clouds over the ocean were more white in color, they’d bounce back more solar radiation. So how would you conduct a field study of this idea?
“You might inject some salt particles in a coastal cloud belt and try to measure a change in albedo,” says Long. This modification could be done from shore, and then the cloud changes could be measured by aircraft from above.
Long, like the authors of the new report, is motivated by climate change concern. “We pretty accurately know that things are going to potentially be very bad in mid-century if we don’t get on top of the problem,” she says.


I'm looking for information pertaining to Ethiopia's Abiy Ahmed's winning of the Nobel Peace Prize.

Please provide details explaining what accomplishments and expectations led to Abiy Ahmed being awarded the Nobel Peace Prize. Background information regarding the history of the Ethiopia-Eritrea conflict are relevant. Eritrean reaction to the award and information about current relations between the two countries is relevant as well. Documents must include context that mentions death.

Find background information online to answer this question.

At least 1 dead, over 150 hurt in Ethiopia after grenade attack at massive rally for new reformist leader

paul.schemm@washpost.com

ADDIS ABABA, Ethiopia —
A grenade was thrown Saturday at a massive rally in support of Ethiopia’s young new reformist leader, killing one and wounding dozens, but leaving the prime minister unharmed.
Abiy Ahmed, 42, had just finished speaking to a rapturous audience of tens of thousands of supporters in the capital’s iconic Meskel square in the heart of the city when there was a sound of a bang.
Footage shows the prime minister, who was wearing a yellow T-shirt with Nelson Mandela and the African continent on it, standing up and looking in the direction of the sound before being ushered away by security guards.
Shortly after the attack, Abiy appeared grim-faced on television to say that “a few people” were killed and that the “well-orchestrated attack” was “cheap and unacceptable.”
Health Minister Amir Aman later tweeted that one person had died of his wounds among the 155 reported wounded.
“Love will win. Forgiveness will win. Killing is a sign of defeat. They failed yesterday. They failed today. They will fail tomorrow,” Abiy said.
Rally organizer Seyoum Teshome told The Washington Post that he saw the attack unfold, and that the prime minister was saved by one of the demonstration’s participants.
“Someone was trying to throw the grenade and then another person touched his hand so he missed the target and the grenade fell without reaching the stage,” he said.
The blast came just as the master of ceremonies was welcoming viewers from abroad and said in English that “this is the day that Ethiopia has become proud.”
The sound of the live broadcast on state television cut after the blast, and people in the crowd could be seen craning their heads in the direction of the sound.
Photos on social media after the attack showed scattered clothes on the ground, a few motionless bodies and people crying.
Local media have quoted police in saying the incident is being treated as an assassination attempt.
In a tweet following the attack, Abiy’s chief of staff Fitsum Arega promised that the perpetrators would be brought to justice.
“We will overcome hate with love. Some whose heart is filled with hate attempted a grenade attack,” he said. “All the casualties are martyrs of love & peace.”
In the aftermath of the attack, police scuffled with angry protesters and then cleared the square with tear gas, according to Agence France-Presse.
The Associated Press said that nine police officials were later arrested, including the deputy head of the capital’s police commission, citing state broadcaster ETV.
The man with the grenade was wearing a police uniform, witness Abraham Tilahun told the AP. Police officers nearby quickly restrained him, he said. “Then we heard the explosion.”
Abiy, who was inaugurated in April, has embarked on a string of rapid reforms that have stunned the nation, including releasing tens of thousands of prisoners, replacing key generals in the army, dampening ethnic tensions in the country and promising to liberalize the economy.
The rally was in part to express popular support for the prime minister's reforms, such as peace overtures to its once bitter enemy Eritrea, including promises to give up territory now held by Ethiopia.
The Eritrean ambassador to Japan, Estifanos Afwerki, said his country “strongly condemns the attempt to incite violence” at what he described as the first demonstration for peace in the history of Ethiopia.
Despite the tragedy at Meskel Square, spirits were high elsewhere in the city where crowds streaming away from the hours-long rally were cheering and wearing T-shirts emblazoned with Abiy’s face.
paul.schemm@washpost.com


Ethiopia’s army chief, 3 other officials killed in renegade general’s coup attempt, government says

ADDIS ABABA, Ethiopia —
A coup attempt by a renegade general in one of Ethiopia’s largest regional states resulted in the death of four officials, including the national army’s chief of staff and the president of the region, the government announced Sunday.
Gunmen attacked an executive meeting of the Amhara regional state in the city of Bahir Dar on Saturday evening, killing its president, Ambachew Mekonnen, and his top adviser and grievously injuring the regional attorney general. Hours later, in the capital Addis Ababa, the bodyguard of army chief of staff Gen. Seare Mekonnen opened fire on him, killing the general and an associate.
Government spokeswoman Bilene Seyoum blamed the attacks on a recently amnestied brigadier general who had been imprisoned for his political views by the previous government several years before.
“The coup attempt and attack was orchestrated by Brig. Gen. Asaminew Tsige, the Amhara peace and security head with other agents,” she told journalists. “He and his colleagues were given amnesty over the last year by the new administration amid efforts to integrate them back to regular life.”
She said most of the perpetrators, including Seare’s bodyguard, were in custody and operations were underway to sweep up the remaining accomplices.
The Amhara region was “currently under 100 percent control,” she said.
Ethiopia, Africa’s second-largest country by population, is a key U.S. ally in the fight against terrorism in the Horn of Africa and an important source of stability in the restive region.
The country’s politics have undergone a dramatic change over the past year with the arrival of a new reformist prime minister who has invited back exiled opposition politicians and guerrilla groups and freed thousands of political prisoners.
Asaminew was imprisoned by the previous regime for his opposition to the government, and his release and appointment to head of security was part of the larger reconciliation process.
The new freedoms, however, have allowed long-simmering tensions to rise to the surface, and millions have been displaced in ethnic-based land conflicts around the country.
In 2018, with some 3 million driven from their homes, Ethiopia had the largest number of newly displaced people in the world.
There has also been a great deal of political ferment in the ethnic-based regions that make up the country, with the rise of nationalist ethnic groups pushing for greater regional autonomy from the central government.
As news of the coup attempt in Bahir Dar and the attack on the chief of staff’s home in the heart of the capital spread late Saturday, social media exploded with rumors and speculation over what was taking place. Within a few hours, access to the Internet was shut down, and army and police checkpoints were installed around the capital.
Prime Minister Abiy Ahmed appeared on television at midnight dressed in military fatigues to call for calm and reassure the country that the situation was under control.
Since coming to power, Abiy has made peace with longtime rival Eritrea and has been active in brokering peace deals between fractious neighbors in the region.
Most recently, he has been active in mediating between the military transitional rulers in Sudan and protesters there.
paul.schemm@washpost.com


Ethiopia protests spark Internet shutdown and fears of high death toll after popular singer killed

NAIROBI —
A large death toll was feared as protests rocking Ethiopia's largest ethnic region continued Wednesday following the slaying of a popular singer, but details were scarce because of an Internet shutdown that made communication difficult.
A police chief from the Oromia region, where most of the unrest took place, told Agence France-Presse that 81 people were killed in the past two days, including protesters and security forces. In a speech, Prime Minister Abiy Ahmed said only that "several" died.
Three explosions were also reported Tuesday in the capital, Addis Ababa, with unspecified injuries and deaths.
According to residents of multiple cities, protests over the death of Hachalu Hundessa continued across the region Wednesday. According to Hachalu's cousin Moti Hundessa, security forces in the town of Ambo, west of the capital, attempted to take Hachalu's body from his house, provoking a clash in which Hachalu's uncle was killed.
"Security forces tried to grab the body, and we fought with them to prevent them," Moti Hundessa said. "Then they began shooting at us."
The medical director of the main hospital in Ambo confirmed the death and said he had seen multiple people with gunshot wounds come in Wednesday. Moti Hundessa said six people were killed by security forces in Ambo on Wednesday. Roads across Oromia were closed, many blocked by protesters chanting "Abiy is our enemy," according to witnesses.
The demonstrations in Oromia as well as the capital were the latest indication of seething ethnic grievances that have repeatedly threatened to derail Ethiopia's transition to multiparty democracy. The government shut down the country's Internet on Tuesday — a common tactic during unrest — and has not yet restored the service.
Hachalu, 34, belonged to the Oromo ethnic group, the country’s largest, and was shot in his car on the outskirts of Addis Ababa on Monday night. He died hours later in a hospital. Police said his assailants and their motives are unknown. His songs had galvanized a movement that succeeded in pushing Ethiopia’s previous prime minister to step down and opening the way for democratic reforms.
Abiy, himself an Oromo, has released political prisoners, allowed greater freedom of speech and lifted a ban on several opposition groups, but many Oromos say they continue to be marginalized in the nation-building process.
Abiy won last year’s Nobel Peace Prize for his efforts in brokering an end to a decades-long standoff with Ethiopia’s northern neighbor, Eritrea. Domestic conflicts have proved harder to smooth over, and millions of Ethiopians remain internally displaced.
“This is an act committed and inspired by domestic and foreign enemies in order to destabilize our peace and to stop us from achieving things that we started,” Abiy said Tuesday, in reference to Hachalu’s killing, without providing evidence.
Long before the pandemic delayed parliamentary elections, which were scheduled for August, analysts had warned that simmering discontent in Oromia ahead of the vote could lead to large-scale bloodshed.
A prominent Oromo media outlet reported that its founder, Jawar Mohammed, and Bekele Gerba, two of the country’s most prominent Oromo politicians, were arrested in connection with an argument over the burial of Hachalu’s body. Dozens of others were also arrested, the outlet said on Facebook.
In a Facebook post just before the Internet was shut off, Jawar posted an impassioned tribute to Hachalu.
“They did not just kill Hachalu. They shot at the heart of the Oromo Nation, once again !! . . . You can kill us, all of us, you can never ever stop us!! NEVER !!” he wrote.
In October, Jawar warned on social media about government moves against him, prompting widespread protests across Oromia that left at least 100 dead.
Officials in Abiy’s government have accused Jawar of using popular social media platforms to incite protests that turn violent, but Jawar has insisted that the government is always the instigator.
“If the army is deployed, there will be blood. And that, well, it comes down to Abiy. If there is violence, it will begin at his command,” Jawar said in an interview with The Washington Post in March.


The Daily 202: Trump’s compulsion to take credit deepens his credibility gap amid questions about Iran intelligence

THE BIG IDEA: President Trump boasted on Thursday morning about the declining cancer death rate in the United States. “A lot of good news coming out of this Administration,” he tweeted.
Trump had nothing at all to do with either development.
-- The president claiming credit for good news that he had little or nothing to do with has become a running joke over the past three years.
Trump said over the holidays that people are proudly wishing each other “Merry Christmas” again because of his leadership.
In November, Trump took credit for Apple opening a Texas plant to assemble Mac Pros. In fact, the facility has been operational since 2013. He’s made similar declarations, from Pennsylvania to Louisiana.
That same month, Trump signed a bipartisan act to mint a commemorative coin for the centennial of women gaining the right to vote under the Constitution. “I’m curious: Why wasn’t it done a long time ago?” he said during a signing ceremony in the Oval Office. “I guess the answer to that is because now I’m president. We get things done.” Another plausible explanation: The centennial wasn’t until now.
Trump has taken credit for the success of the 2018 Winter Olympics in South Korea and for North America’s winning bid to host the 2026 World Cup. In May, the Boston Red Sox came to the White House to celebrate winning the World Series. After the team swept the Seattle Mariners in a subsequent three-game series, Trump hinted that their visit might have something to do with it:
But Boston tanked again after the tweet. They finished the season with an 84-78 record, 19 games behind and a distant third in the American League East.
The president has claimed that one of his proudest moments was getting a Veterans Choice program approved. In fact, the plan was sponsored by Bernie Sanders and John McCain, then signed into law by Barack Obama, in 2014. He’s taken credit for border barriers that existed before he took office. He’s claimed credit for getting countries to contribute to NATO what they had already planned to spend on their own militaries.
Trump has also taken credit for fixing things that aren’t fixed. For instance, he touted North Korea’s denuclearization when it was not happening. Another Trump M.O. is to take credit for addressing crises he created. He has said it was his idea to bail out farmers suffering from Chinese tariffs, not mentioning that he started the trade war. The president has also said he deserves credit for reuniting families who were torn apart because of his own immigration policies.
It’s often situational. Trump demands credit when stocks go up, but he said it was not his fault when markets corrected. He’s also taken credit for coming up with words and phrases such as “caravan,” “fake” and “prime the pump” that long predate him.
-- Trump’s fusillade of falsehoods on so many topics casts a shadow of doubt over his claims that he says are based on top secret intelligence.
The Sunday shows starkly displayed the consequences of the president’s decision to squander his credibility by playing so fast and loose with the truth throughout his tenure. Trump’s own top aides declined to confirm his declaration on Friday that intelligence showed the Iranians were looking to “blow up” four U.S. embassies.
“I didn’t see one with regard to four embassies,” Defense Secretary Mark Esper said on CBS, referring to intelligence reports. “What I’m saying is I share the president’s view that probably — my expectation was – they were going to go after our embassies.”
National security adviser Robert O’Brien said on Fox that it’s difficult “to know exactly what the targets are,” but it’s not unreasonable to anticipate a future Iranian attack “would have hit embassies in at least four countries.”
On CNN, Esper said “there was intelligence that … there was an intent to target the U.S. Embassy in Baghdad.” He said the details been shared with the Gang of Eight. House Intelligence Committee Chairman Adam Schiff (D-Calif.), a member of the group, said that’s not true.
O’Brien acknowledged on NBC that that the U.S. Embassy in Baghdad was not informed of an imminent threat against it, something that would be standard operating procedure. “As soon as it looked like there was going to be some sort of action against a U.S. Embassy,” he said, “the president was decisive and bold in his action.”
-- When Trump appeared to take credit for fewer people dying of cancer, the American Cancer Society said
The cancer death rate fell in the United States in 2017 – the last year for which data is available – by 2.2 percent, and experts said it’s largely because of fewer lung cancer deaths. This is the result of people choosing to stop smoking over the past few decades, as well as more advanced treatments. The cancer death rate has fallen 29 percent overall since its 1991 peak, with declines every year from 1991 through 2017.
Rep. Debbie Wasserman Schultz (D-Fla.), a breast cancer survivor, noted that Trump’s budget for the current fiscal year proposed cutting more than $4.5 billion in funding from the National Institutes of Health, but a bipartisan coalition in Congress blocked his request and instead appropriated a $2.6 billion increase in support.
Chris Lu, a senior fellow at the University of Virginia’s Miller Center who worked in the Obama White House, said the president is trying to have it both ways. Lu said that, if Trump wants to take credit for the cancer rate falling, “he also needs to own” that income inequality is the highest ever recorded, that the United States has suffered the most mass killings since at least the 1970s, that hate crimes are at a 16-year high, that July 2019 was the hottest month ever recorded and that air pollution is getting worse.
-- Trump taking credit for Ethiopian Prime Minister Abiy Ahmed earning the Nobel Peace Prize apparently stemmed from confusion about African affairs.
Ahmed was recognized for his work securing a peace treaty with Eritrea after decades of hostilities. “Trump played no apparent role in the Eritrea peace deal, but Washington has played a convening role in another deal [Ahmed] is seeking with Egypt that will regulate how quickly Ethiopia can fill a new dam it has built in the upper reaches of the Nile River that has major implications for the flow of water Egypt relies on economically,” our Nairobi bureau chief Max Bearak explains. “The apparent conflation of the two led to widespread befuddlement on social media in Ethiopia and elsewhere, though by and large the comments were not taken seriously.”
“He was talking about Egypt and Ethiopia,” a senior Ethiopian government official told the Associated Press. “President Trump really believes he avoided a war as such … but that was not the case.”
MORE ON IRAN:
-- The only woman to ever win an Olympic medal for Iran has defected to the West.
“Alizadeh is not the only notable Iranian athlete to defect in recent months: Olympian and judoka world champion Saeid Mollaei left Iran and ultimately became a Mongolian citizen after Iranian officials allegedly pressured him to throw a match to avoid competing against Israelis; Pourya Jalalipour, an Iranian para-archer who qualified for the 2020 Tokyo Olympics, left Iran in July to seek asylum in the Netherlands. … Alizadeh did not disclose to where she had defected, mentioning only that ‘no one invited to me to Europe.’ Radio Free Europe cited her past remarks, indicating she may have gone to the Netherlands. … Abdolkarim Hosseinzadeh, a member of parliament, accused ‘incompetent officials’ of allowing Iran’s ‘human capital to flee’ the country, Agence France-Press reports.”
-- Thousands of Iranian protesters hit the streets again on Sunday night to condemn Iranian authorities.
"Protests have spread to other cities, including Shiraz, Esfahan, Hamedan and Orumiyeh,
“Fresh criticism was also leveled at Iran for the temporary arrest Saturday of British Ambassador Rob Macaire. [State television said] Macaire was arrested while in the middle of a crowd of protesters in front of Tehran’s Amir Kabir University. He was accused of instigating and directing radical and destructive demonstrations, and later released. Macaire said on Twitter that he wasn’t taking part in any demonstrations -- and was instead paying respect to victims of the downed Ukrainian plane.”
-- Trump authorized Soleimani’s killing seven months ago if Iran’s increased aggression resulted in the death of an American.
-- Ukraine knew Flight 752 had been shot down, but the country chose not to antagonize Iran.
-- Rockets hit a military base outside Baghdad, injuring at least four Iraqi soldiers.
-- A majority of Americans said they disapprove of Trump’s handling of the Iran situation and feel less safe, according to a new
-- Soleimani’s killing reflected a more aggressive national security team that doesn’t feel strongly inclined to curb Trump.
2020 WATCH:
-- After a Des Moines Register poll showed him leading in Iowa with three weeks until the caucuses, Bernie Sanders clashed on Sunday with Joe Biden on Iraq, tussled with Elizabeth Warren on electability and found himself being attacked by Trump on Twitter as "crazy."
“Sanders’s top aides have long encouraged him to be more aggressive with Biden, and for much of last year, he did not heed their advice. … That posture changed in recent weeks, and dramatically so over the weekend, when Nina Turner, a national co-chair of the Sanders campaign, wrotean op-ed published Sundayin a South Carolina newspaper claiming that Biden ‘has repeatedly betrayed black voters to side with Republican lawmakers and undermine our progress.’ … The increasingly intense fight between Sanders and Biden reflects their ideological disagreements and a sharp political reality: Sanders’s top staffers have argued for months that they compete for many of the same working-class voters and that Biden is the only candidate who performs better than Sanders among minorities.
“The new dispute with Warren operates on another plane, as the two have been allies on some of the more contested proposals of the campaign, including Medicare-for-all, until she tweaked her proposal after sustained criticism. Recently, Sanders has not shied away from contrasting their positions, portraying his Medicare-for-all proposal as superior to her approach. … A script first reported by Politicotold Sanders’s volunteers to tell voters they called on Sanders’s behalf who had indicated support for her that Warren’s popularity was limited to the rich and educated — effectively denigrating her electability. … A Trump campaign aide said to expect the president to mount a full-throttle attack on Sanders in coming days.”
-- At Las Vegas events, Biden and Pete Buttigieg tried to woo Hispanic voters.
-- Sen. Amy Klobuchar (D-Minn.) is behind in the Iowa polls and has not raised as much money as the top-tier candidates, but she could benefit from clashes between Sanders, Warren and Biden.
-- Sanders picked up the endorsement of one of New Hampshire’s largest and most influential unions.
-- Democratic strategist James Carville endorsed Sen. Michael Bennet (D-Colo.) for president this morning.
-- House Democrats who have picked sides in the 2020 primary plan to announce jointly that they will back the eventual Democratic nominee, no matter who it is.
-- Rep. Alexandria Ocasio-Cortez (D-N.Y.) created a PAC to challenge the Democratic Congressional Campaign Committee’s policy to “blacklist” vendors and firms that work with candidates mounting primary challenges against incumbents.
-- The Women’s March organization is gasping for relevance three years after it drew millions to the largest single-day protest in U.S. history.
DOMESTIC DEVELOPMENTS THAT SHOULDN’T BE OVERSHADOWED:
-- Senate Majority Leader Mitch McConnell’s efforts to wire the Senate impeachment trial for Trump’s advantage is helping him politically back home in Kentucky, where he’s up for reelection this fall.
-- “Challenging McConnell to hold a serious trial that includes testimony from witnesses, [Nancy] Pelosi did not rule out the possibility that the House would subpoena former national security adviser John Bolton if the Senate chooses not to,” Elise Viebeck and Juliet Eilperin report. “Pelosi said she will meet with House Democrats on Tuesday morning to discuss the timing of a vote on impeachment managers — the half-dozen lawmakers who will prosecute the case and transmit the charges to the Senate. A trial could start as early as Wednesday, if the House acts quickly, though lawmakers and aides have speculated that it will not begin in earnest until the following week. … In a Sunday afternoon tweet, Trump called for dismissal with no trial. … Senate Republicans have rallied behind the precedent set during President Bill Clinton’s 1999 impeachment trial, in which the case for removal was presented and rebutted before decisions were made about calling witnesses or seeking further evidence. Pelosi dismissed comparisons to 1999 for ‘at least six reasons . . . the biggest one is that the witnesses [who eventually testified] were all deposed’ before their public testimony. … Sen. Susan Collins (R-Maine) has said that she is working with a small group of Republicans to ensure that the trial includes witnesses.”
-- Trump attacked a former Justice Department senior official who was appointed by a federal judge to review the FBI’s proposed wiretap application reforms.
-- Trump’s impeachment defense team is coming together.
-- Sen. Minority Leader Chuck Schumer (R-N.Y) might get the last laugh on the impeachment trial.
-- As remote telework rises at U.S. companies, Trump is calling federal employees back to their offices.
-- Five years after an abortion, most women say they made the right decision.
-- American history textbooks for high school students differ significantly from Texas to California in ways that are shaded by partisan politics,
-- The Jussie Smollett case looms over the reelection campaign for Chicago’s chief prosecutor.
SOCIAL MEDIA SPEED READ:
A Republican-turned-independent congressman highlighted one of the more remarkable statements Trump made in his Fox News interview:
Bernie Sanders responded to a Trump taunt:
On a balmy night, with temperatures in D.C. around 70 degrees on Sunday, the White House shared an image of snow falling from last Tuesday:
An Italian astronaut who is currently on the International Space Station shared an image of the fires in Australia from above:
And the U.S. embassy in Seoul congratulated a NASA astronaut who might be one of the most accomplished men alive:
VIDEOS OF THE DAY:
The Taal volcano in the Philippines erupted over the weekend, spewing lava and ash across the country and forcing thousands to evacuate:
In Australia, officials made it rain carrots and sweet potatoes for the wildlife affected by fire:
“The Daily Show” went to Arizona to talk about how climate change has hurt the state:


Ethiopian leader Meles Zenawi dies at 57

Ethiopian Prime Minister Meles Zenawi, who was once hailed as a major U.S. ally against terrorism but whose 21-year rule was tarnished by the killing and jailing of political protesters and a grisly border war with former ally Eritrea, died Aug. 20 of an undisclosed illness. He was 57.
Ethiopian officials said Mr. Meles died in a Belgian hospital after contracting an infection, the Associated Press reported. But the circumstances of his death remained laced with intrigue.
The highly active prime minister attended the Group of 20 summit in Mexico in June but had not been seen in public for about two months. Government officials were vague about his whereabouts, saying he was suffering from an illness after receiving medical treatment in an unspecified hospital in Europe.
Mr. Meles, a onetime Marxist guerrilla who redefined himself as an economic reformer, was a strategic U.S. military ally in the Horn of Africa. He allowed the United States to send drones from Ethiopian territory into neighboring Somalia. With Washington’s backing, he sent Ethiopian troops into Somalia to fight Islamist and other anti-American militants between 2006 and 2009.
His death plunged his impoverished nation of 75 million people into political uncertainty. Developments were being watched closely in Washington, which has provided more than $2 billion in aid to Ethiopia since 2010. The Washington area is home to more than 200,000 Ethiopian immigrants, the largest population of Ethiopians outside the country.
Historically known as Abyssinia, Ethiopia was a monarchy for much of its history and was ruled from from 1930 to 1974 by Emperor Haile Selassie I. He was replaced by Soviet-backed dictator Mengistu Haile Mariam, who ruled from 1974 to 1991. The country has suffered droughts, famines and grinding poverty that led to violent dissent.
Like many modern African leaders, Mr. Meles began his dramatic rise to power when he joined an armed rebel group. He quit medical school at Addis Ababa University in 1974 and went to the bush to wage a revolution against Mengistu’s repressive communist regime.
At first, Mr. Meles fought briefly on the front lines with the Tigrayan People’s Liberation Front, which he helped mobilize when he was 20. He rose quickly to take over the leadership in 1989.
By that time, the Mengistu regime was deeply unpopular at home and abroad. Mengistu’s policies — neglecting regions and ethnic groups that did not support him — were said to have worsened a famine that claimed 1.5 million lives from 1983 to 1985.
Mr. Meles and a slew of united rebel groups, including those fighting to found a new Eritrean nation, finally overthrew Mengistu in 1991. Mr. Meles became Ethiopia’s president in 1991 and prime minister four year later. Eritrea seceded from Ethiopia once Mengistu had fallen.
Mr. Meles quickly backed away from his self-described “intellectual communist views” and became what the Ethiopian and foreign news media described as a “mellowed Marxist” pragmatic in courting Western donors.
Mr. Meles was hailed as part of a “new breed” of African leaders who would enforce term limits and allow political opposition and civil society to flourish.
In March 1998, President Bill Clinton met with Mr. Meles during a diplomatic trip to Africa. Shortly thereafter, Mr. Meles led his country to war with Eritrea. The brief but bloody 1998-2000 border war cost an estimated 100,000 lives.
Mr. Meles represented Africa at Group of Eight, G-20 and climate change meetings. But his reputation quickly soured among human rights groups that documented killings of political opponents and the jailing of reporters. Mr. Meles also repeatedly broke promises to let others have a chance at governing.
“I would love to be the African leader that steps down, that overthrows this idea of a Big Man ruler. I don’t want to stay in office forever,” he told The Washington Post in the aftermath of Ethiopia’s May 2005 election, when 193 political protesters and seven police officers were killed during street demonstrations.
That week, top leaders of the Coalition for Unity and Democracy, the opposition party that had made significant gains during the election, were imprisoned along with an estimated 30,000 people in a vast crackdown.
Mr. Meles defended the arrests in the interview. “It was insurrection, and in my view that’s treason,” he said. “Democracy is about having the rule of law.”
In 2010, Mr. Meles and his party won reelection in a landslide, capturing all but two of 547 parliamentary seats. The European Union and the United States contended that the poll was flawed. Mr. Meles described an E.U. monitoring report as “trash that deserves to be thrown in the garbage.”
Meles Zenawi was born Legesse Zenawi on May 8, 1955,in the northern town of Adwa. As a young rebel later, he took the nom de guerre Meles to honor Meles Tekle, a Tigrayan nationalist student killed by Mengistu’s ethnic Amhara-dominated government.
Mr. Meles married Azeb Mesfin, a former rebel fighter in the liberation struggle. In addition to his wife, survivors include three children.
Even his critics acknowledged that Mr. Meles oversaw some of the fastest growth in sub-Saharan Africa, including the construction of roads and bridges, built in part with extensive foreign investment and the long-term leasing of large tracts of farmland to China and India, said John Harbeson, an African studies lecturer at Johns Hopkins University’s School of Advanced International Studies.
At the same time, “there has been significant displacement of rural populations,” Harbeson said.
Mr. Meles once hinted at the personal stress of ruling when an Ethiopian journalist asked whether he thoughts his eldest daughter should go into politics. “If you have the fire, go for it,” he said. “If you do not, stay as far away from it as you possibly can, for your own health.”


What issues face the approximately 28% of Americans with limited or no access to traditional banks?

Granting retail stores like Walmart, Target, and Safeway bank charters will help the 10 million underbanked Americans unable to afford the costs associated with traditional banks. Studies indicate that the unbanked depend on lower fees offered by prepaid debit cards and/or money orders to pay bills or cash checks instead of the using payday loans or cash checking services. Eliminating some government regulations and having more retail stores offer prepaid debit cards such as Walmart's successful Bluebird American Express card which does not require credit checks will help the underbanked better manage their finances. Exclude documents related to loans.

Find research that supports this financial question.

Why you’ll be able to pay for things on your phone in lots of ways for a long time

It's not clear, however, that mobile payments will work the same way. The space is big enough, the market is fragmented enough, and the barriers to entry low enough that a huge number of options might stick around for some time to come. Let's break this down. 1. The market is still wide open. Even though digital wallets have been around for years, consumers have been slow to start using them, for many reasons. That leaves a huge chunk of commerce that could be converted from cash and cards to phones -- especially if they can be used in physical stores and restaurants, as well, since that's where most purchases are likely to take place for some time. It's going to take a lot of marketing to reach all those consumers, and it's unlikely that one or even a few big players will be able to do it on their own. According to Forrester Research: We still don't buy much online, and mobile payments can be used in physical stores, too. (Forrester) 2. No one mobile payments operator can give consumers everything. There are three kinds of entities that offer ways to pay for things with a smartphone: tech companies, financial institutions and the merchants themselves. Each of them has different interests and capabilities. Tech companies like Google, for example, can integrate their wallet with all the other services you might use -- like sending special offers for locations you might search on Google Maps, or allowing you to send money to your Gmail contacts. The advantage of Google Wallet and others, like Dwolla, PayPal, Paydiant and LevelUp, comes in removing friction from the commercial experience and integrating payments with the rest of your digital life. Financial institutions, like banks and credit card companies, are better at integrating payments with whatever you do to manage your money already. Visa's V.me, Mastercard's Masterpass and Barclays' Barclaycard keep all your financial information within one system that you might trust more as a guardian of your account balance than another app that might get hacked. Some of them have partnered with wireless companies, including Verizon and AT&T, to form a mobile payments company called ISIS that uses "near field communications" technology, allowing you to tap your phone against a special terminal to pay. The crazy proliferation of payment options right now. (Forrester) 3. Merchants don't have to stick to one kind of payment.

One of the biggest themes at last week's retail confab in New York City -- besides the intense gravitational force of Amazon.com ripping the industry from its moorings -- concerned mobile payments. In the future, everyone will just pay for stuff on their phones, right? What does that mean for how retail is set up? And whose payment system will ultimately triumph?
And that's exactly how the question is usually framed: as a war of digital wallets, in which one winner must eventually take all. Indeed, the modern Internet economy tends to function that way, with some services gaining widespread adoption through network effects -- see Twitter, Facebook -- and crowding out the rest.
It's not clear, however, that mobile payments will work the same way. The space is big enough, the market is fragmented enough, and the barriers to entry low enough that a huge number of options might stick around for some time to come. Let's break this down.
1. The market is still wide open.
Even though digital wallets have been around for years, consumers have been slow to start using them, for many reasons. That leaves a huge chunk of commerce that could be converted from cash and cards to phones -- especially if they can be used in physical stores and restaurants, as well, since that's where most purchases are likely to take place for some time. It's going to take a lot of marketing to reach all those consumers, and it's unlikely that one or even a few big players will be able to do it on their own. According to Forrester Research:
We still don't buy much online, and mobile payments can be used in physical stores, too. (Forrester)
2. No one mobile payments operator can give consumers everything.
There are three kinds of entities that offer ways to pay for things with a smartphone: tech companies, financial institutions and the merchants themselves. Each of them has different interests and capabilities.
Tech companies like Google, for example, can integrate their wallet with all the other services you might use -- like sending special offers for locations you might search on Google Maps, or allowing you to send money to your Gmail contacts. The advantage of Google Wallet and others, like Dwolla, PayPal, Paydiant and LevelUp, comes in removing friction from the commercial experience and integrating payments with the rest of your digital life.
Financial institutions, like banks and credit card companies, are better at integrating payments with whatever you do to manage your money already. Visa's V.me, Mastercard's Masterpass and Barclays' Barclaycard keep all your financial information within one system that you might trust more as a guardian of your account balance than another app that might get hacked. Some of them have partnered with wireless companies, including Verizon and AT&T, to form a mobile payments company called ISIS that uses "near field communications" technology, allowing you to tap your phone against a special terminal to pay.
Finally, some of the biggest retailers -- like Amazon, for example, but also fast-food restaurants and other stores that people visit often -- like to use their own payment options as a way of sucking in customer data and giving them incentives to buy frequently. A number of very large retailers are working on a compromise approach -- the forthcoming Merchant Customer Exchange -- which will allow customers to use one app for retailers from Sheetz to Walmart.
None of those kinds of companies offer the advantages of all three, so consumers will either have to choose among them or use all of them at once. That is, if they play nicely together: Verizon, for example, decided to ban Google Wallet from its smartphones, to clear the decks for ISIS.
The crazy proliferation of payment options right now. (Forrester)
3. Merchants don't have to stick to one kind of payment.
In the typical model of consumer technology adoption, you want to be on the platform that everybody else is on, because the size of the network is its value proposition. There's no point in using something like Snapchat if no one else is around to receive your ephemeral messages.
Mobile payment platforms are different. With the exception of those that are primarily meant for individuals exchanging money, like Dwolla and eBay's Venmo, it doesn't matter to a consumer how many other consumers are using the service -- just that the merchants you want to buy from use it. For the merchants, it's not that difficult to integrate payment methods, and they have the incentive to let you pay in whatever way you want (while offering rewards for people using their own method, if they have one). There are a number of scanners that can accommodate apps that use barcodes. And, as tap-to-pay technology gets integrated into more points of sale -- which it will over the next few years, for credit card security reasons -- retailers will be able to accept whatever payment mechanism designed for it (the big ones now are Google Wallet and ISIS).
All of which means that an already crowded marketplace is just likely to get more so. "In the short term, were going to see more wallet solutions, not fewer," says Forrester Research's Denee Carrington. And because of how the market is structured, with so many players and divergent interests, it may not consolidate in the way that so many other markets have.


Consumer agency to target prepaid cards

Consumer agency to target prepaid cards

“The people who use prepaid cards are, in many instances, the most vulnerable among us,” Cordray said. “All consumers need, and deserve, products which are safe and whose costs and risks are clear upfront.” But the Pew focus group found that consumers were concerned about the number of fees associated with prepaid cards. They include charges to buy the card, reload money, withdraw money from an ATM and call customer service. The CFPB said there is no industry-wide standard on disclosures, making it hard for consumers to comparison shop. In addition, some cards offer features allowing customers to overdraw their accounts or build their credit. The agency is seeking feedback on the costs, benefits and consumer-protection issues associated with those features. Terry Maher, general counsel at the Network Branded Prepaid Card Association, said the trade group supports transparent disclosures. Several of its members have been working with advocacy groups on test forms, he said. Maher said the group is also open to requiring prepaid card providers that offer overdraft to comply with the same regulations for those fees as banks. But he said it “would be a mistake” to ban the product all together. “We’re in favor of consumers being able to choose the product that’s right for them after they get clear and transparent disclosures,” Maher said. More of the latest business news: CBO report: Taxmageddon would throw U.S. back into recession Generic-drug makers: Brand-name rivals are exploiting loopholes Energy Department seeks to help USEC

The new federal consumer watchdog agency is considering drafting new rules governing transparency and safety in the rapidly growing market for prepaid cards.
Consumer Financial Protection Bureau Director Richard Cordray said the cards have fewer regulatory protections than bank accounts and debit cards. The agency said it will focus rule-making on three key areas: disclosure of fees and terms, liability for unauthorized transactions and niche product features, such as overdrawing an account. The agency is holding a field hearing on the cards Wednesday in North Carolina.
“The people who use prepaid cards are, in many instances, the most vulnerable among us,” Cordray said. “All consumers need, and deserve, products which are safe and whose costs and risks are clear upfront.”
The rules would apply specifically to prepaid cards that can be reloaded and used at an array of locations. Many consumers are using these cards as replacements for traditional checking accounts. According to a recent focus group convened by the Pew Health Group, consumers said the cards help them avoid costly bank overdraft fees and are a useful budgeting tool. Generally, consumers can only spend the money they have loaded onto the card.
But the Pew focus group found that consumers were concerned about the number of fees associated with prepaid cards. They include charges to buy the card, reload money, withdraw money from an ATM and call customer service.
The CFPB said there is no industry-wide standard on disclosures, making it hard for consumers to comparison shop. In addition, some cards offer features allowing customers to overdraw their accounts or build their credit. The agency is seeking feedback on the costs, benefits and consumer-protection issues associated with those features.
Terry Maher, general counsel at the Network Branded Prepaid Card Association, said the trade group supports transparent disclosures. Several of its members have been working with advocacy groups on test forms, he said.
Maher said the group is also open to requiring prepaid card providers that offer overdraft to comply with the same regulations for those fees as banks. But he said it “would be a mistake” to ban the product all together.
“We’re in favor of consumers being able to choose the product that’s right for them after they get clear and transparent disclosures,” Maher said.
More of the latest business news:
CBO report: Taxmageddon would throw U.S. back into recession
Generic-drug makers: Brand-name rivals are exploiting loopholes
Energy Department seeks to help USEC


Why the mobile payments space is the most exciting space in tech right now

Innovations such as Apple Pay — introduced during an Apple event in Cupertino in September — could be the key to reaching the nation’s unbanked. (Stephen Lam/Reuters) The results are pretty clear: Get smartphones with mobile payment capabilities into the hands of unbanked consumers and they will use them. They may not have bank accounts, but they have smartphones. They may not have checkbooks, but they have apps. However, if mobile payments are ever going to capitalize on their promise to change America’s financial system, they will still have to convince unbanked Americans to pull out a smartphone every time they’re willing to make a transaction instead of using cash. And, even in 2014, that’s still asking a lot. For one, it’s not always clear how well these new mobile payment mechanisms will actually work. And, secondly, even if you figure out how to use them, it’s not clear that your merchant of choice will actually accept them. This doesn’t look like financial disintermediation, does it? (Marcio Jose Sanchez/AP) But take a look at what’s happening with Apple Pay – there’s not a disintermediation, but, if anything, a re-intermediation. Look at all the major credit card issuers and banks that have signed up for Apple Pay. They may not like it, but they realize that mobile payments are the future.

Innovations such as Apple Pay — introduced during an Apple event in Cupertino in September — could be the key to reaching the nation’s unbanked. (Stephen Lam/Reuters)
It seems as if every big player in the tech sector is developing a mobile payment solution. It’s not just Apple Pay, which was announced with much fanfare at the big Apple launch event in early September, and reportedly could go live as early as Oct. 20. There are now rumors that Facebook is working on mobile payments. Add to the mix PayPal, Square and Google and it’s clear that some of the smartest innovators in the tech world are on the cusp of breaking the mobile payments space wide open.
The reason why the mobile payments space is so exciting right now is not because of all the money to be made – the real reason is because of what the explosion of mobile payment alternatives means for the nation’s “unbanked” – the nearly 10 million American households that don’t use banks, don’t use checking accounts, and basically depend on cash and financial alternatives – like payday lenders and prepaid cards – for their financial transactions.
What’s interesting is to drill down on the data about the nation’s unbanked to find out how mobile banking could help them become part of the financial system. According to a Federal Reserve bulletin released in September 2012, 63 percent of the unbanked have a mobile phone, and of these, 26 percent have smartphones. And, once these unbanked Americans get smartphones, says the Fed, they are more likely to use them for banking. Putting it all together, the Federal Reserve highlighted the significance of this for the future of the nation’s financial system, “The increased use of these devices coupled with the evolution of technologies that enable consumers to conduct financial transactions using their mobile phones has the potential to change how consumers manage their finances as new services and tools emerge.”
The results are pretty clear: Get smartphones with mobile payment capabilities into the hands of unbanked consumers and they will use them. They may not have bank accounts, but they have smartphones. They may not have checkbooks, but they have apps.
That’s why Bill Gates, in a recent interview with Bloomberg, called Apple Pay a “fantastic” idea — it’s going to make mobile banking easier and cheaper to use for transactions involving small amounts of money. He’s thinking of Apple Pay’s potential in terms of micropayments and developing markets like Africa, where innovations like M-PESA are hugely successful. But there’s a U.S. equivalent — and that’s America’s “unbanked.” According to the latest FDIC survey, 8.2% of all U.S. households are “unbanked” — and millions more are “underbanked.”
The good news is that Apple Pay has the potential to make mobile payments a de facto standard on every single smartphone going forward. Apple may have the premium end of the market in mind, but Apple Pay is still going to open up cheap and accessible mobile payments to people in urban cities and the rural poor, even if only indirectly. As Gates noted in the Bloomberg interview: “And all the platforms, whether it’s Apple’s or Google’s or Microsoft, you’ll see this payment capability get built in. That’s built on industry standard protocols, NFC. And these companies have all participated in getting those going. Apple will help make sure it gets to critical mass for all the devices.”
However, if mobile payments are ever going to capitalize on their promise to change America’s financial system, they will still have to convince unbanked Americans to pull out a smartphone every time they’re willing to make a transaction instead of using cash. And, even in 2014, that’s still asking a lot. For one, it’s not always clear how well these new mobile payment mechanisms will actually work. And, secondly, even if you figure out how to use them, it’s not clear that your merchant of choice will actually accept them.
The good news is that new mobile payment solutions may help unbanked Americans get over their aversion to dealing with banks, which was cited as the No. 1 reason why the unbanked are unbanked.
In fact, they might prefer Wal-Mart to banks. The retailer is also getting into the game of providing financial services to the nation’s unbanked. FiveThirtyEight looked at the states with the greatest concentration of Wal-Marts and compared that with the states with the highest percentage of unbanked households, finding a pretty clear correlation. There’s a real market opportunity here.
This doesn’t look like financial disintermediation, does it? (Marcio Jose Sanchez/AP)
For a long time, financial disintermediation was one of the greatest fears in the old-school banking industry – that a bunch of really smart tech innovators would find a way to “disintermediate” the whole financial industry and deal directly with consumers, who would no longer need banks as the “middlemen.” In many ways, this was happening with innovations such as P2P lending, crowdfunding and branchless Internet banking.
But take a look at what’s happening with Apple Pay – there’s not a disintermediation, but, if anything, a re-intermediation. Look at all the major credit card issuers and banks that have signed up for Apple Pay. They may not like it, but they realize that mobile payments are the future.
Think about the number of $10 billion market opportunities available to the big tech companies. You can continue to come up with world-changing innovations that people may – or may not – actually want. You could search for big markets – such as China – and double down on foreign growth. Or, you can tap into the growth prospects here in America. In this case, it’s the 10 million unbanked American households who might just see mobile payments as their secret to prosperity.


Too big to innovate: Get excited for the coming disruption of banks

Don’t worry, banks. Video stores, newspapers and film cameras can offer a shoulder to cry on. They know how you are about to feel. Welcome to the world of disruption, where businesses get upended. The race is now on to chip away at banks’ businesses with cheaper and superior services that customers love. TransferWise lets users send money internationally without paying the hefty fees traditional banks have charged for such transfers. Its founders, two Estonian friends, got the idea after wanting to exchange Euros and British pounds. They soon realized the potential of a decentralized, peer-to-peer financial network. It’s a no-brainer for anyone sending money across borders. TransferWise says it has saved its customers over $200 million in fees since launching four years ago. It plans to use its new funding to continue to grow around the globe. TransferWise says it is growing 15 to 20 percent a month. The truth is, moving money shouldn’t be very expensive given today’s technology. “In the modern day, money is really just data,” Seth Priebatsch, chief executive of a similar type of financial service company, told me last year. “Anything that is data eventually moves to the medium that can move it with the least friction, the most quickly and at the least cost.” Priebatsch leads another company leveraging the latest technology to try to disrupt the traditional financial world. LevelUp processes restaurant payments for 1.95 percent, significantly less than what the Visas and Mastercards of the world offer. For businesses, small transactions such as a cup of coffee can be unprofitable because of fees to process the credit card transactions. (This is why many demand a minimum payment to use a credit card.) The problem for traditional financial players is that their business models rely on expensive fees. “They’re in a pretty difficult situation with their balances sheets and income. In that sense it’s very hard for them to say, ‘Hey we’ve been overcharging our customers. Why don’t we slash our hidden exchange rates by five times or 10 times to be competitive with TransferWise,'” said TransferWise co-founder Kristo Kaarmann. “Because they also have this legacy technology to keep up, the branch network, all the products that are costly to maintain.” For the incumbents, there’s little incentive to innovate. Why disrupt your profitable business and its rich profit margins? Max Levchin, the chief executive of Affirm and PayPal co-founder, gave a reminder

Don’t worry, banks. Video stores, newspapers and film cameras can offer a shoulder to cry on. They know how you are about to feel. Welcome to the world of disruption, where businesses get upended. The race is now on to chip away at banks’ businesses with cheaper and superior services that customers love.
As the full impact of software and the Internet washes over the global economy, more casualties will fall.  A reminder of a teetering domino came Sunday night when London start-up TransferWise announced it raised $58 million from investors, including Andreessen Horowitz, a prominent venture capital firm.
TransferWise lets users send money internationally without paying the hefty fees traditional banks have charged for such transfers. Its founders, two Estonian friends, got the idea after wanting to exchange Euros and British pounds. They soon realized the potential of a decentralized, peer-to-peer financial network.
Why pay 7.99 percent — the global average for remittance — to some bank when TransferWise will charge only 1 percent for the first $5,000 and 0.7 percent for any additional money?
It’s a no-brainer for anyone sending money across borders. TransferWise says it has saved its customers over $200 million in fees since launching four years ago. It plans to use its new funding to continue to grow around the globe. TransferWise says it is growing 15 to 20 percent a month.
The truth is, moving money shouldn’t be very expensive given today’s technology.
“In the modern day, money is really just data,” Seth Priebatsch, chief executive of a similar type of financial service company, told me last year. “Anything that is data eventually moves to the medium that can move it with the least friction, the most quickly and at the least cost.”
Priebatsch leads another company leveraging the latest technology to try to disrupt the traditional financial world. LevelUp processes restaurant payments for 1.95 percent, significantly less than what the Visas and Mastercards of the world offer. For businesses, small transactions such as a cup of coffee can be unprofitable because of fees to process the credit card transactions. (This is why many demand a minimum payment to use a credit card.)
The problem for traditional financial players is that their business models rely on expensive fees.
“They’re in a pretty difficult situation with their balances sheets and income. In that sense it’s very hard for them to say, ‘Hey we’ve been overcharging our customers. Why don’t we slash our hidden exchange rates by five times or 10 times to be competitive with TransferWise,'” said TransferWise co-founder Kristo Kaarmann. “Because they also have this legacy technology to keep up, the branch network, all the products that are costly to maintain.”
For the incumbents, there’s little incentive to innovate. Why disrupt your profitable business and its rich profit margins?
Max Levchin, the chief executive of Affirm and PayPal co-founder, gave a reminder of banks’ troubles at the Digital-Life-Design conference earlier this month. He noted that American Express is hiring software engineers to program with Cobol, a dated programming language.
“Seventy percent of computer science departments worldwide do not even teach Cobol. The top 10 computer science departments do not offer Cobol pretty much in any form,” Levchin said. “I guarantee people going straight out of school to work for AmEx to write some awesome Cobol code are not from the top 10 computer science departments. Basically we’re going to hire dummies — well not really — but not the creme de la creme. The creme de la creme is going to go disrupt Cobol.”


Wal-Mart and American Express prepaid card gets FDIC insurance

The use of reloadable prepaid cards has exploded in the wake of the credit crisis that left millions of Americans outside the traditional banking system. But reloadable prepaid cards do not offer the same financial protections for consumers as checking accounts. They also operate with fewer regulatory constraints. Facing increasing scrutiny from consumer advocates, the vast majority of card operators have opted in the past few years to carry up to $250,000 in mandatory deposit insurance per customer offered through the FDIC. American Express is one of the last major providers to sign on to that government backstop. The coverage will apply to Bluebird cards sold at Wal-Mart stores. The card carries the American Express insignia and operates much like a debit or credit card, with features such as roadside assistance and mobile banking. Customers also can write checks with the account and load up to $100,000 a year. “This product is really designed to be an alternative to traditional banking,” said Dan Schulman, group president of enterprise growth at American Express. “Technology is beginning to blur the distinction between those lines.” This move could expand American Express’s customer base. Bluebird customers will now be able to have government payments, such as Social Security, military pay and tax refunds, deposited directly onto their cards. Government funds can be deposited only into federally insured accounts. Demand for the cards exploded as nearly 1 million households exited the banking system between 2009 and 2011. The industry is expected to reach nearly $202 billion in revenue this year, compared with $28.6 billion in 2009, according to consulting firm Mercator Advisory Group. But consumer advocates have warned that prepaid card operators are not always forthcoming about their fees, including charges to load money, activate the card, speak to customer service or check a balance at an automated teller machine. They worry that card operators are steering lower-income consumers into these products without fully disclosing the terms. The Consumer Financial Protection Bureau is expected to issue rules this year to address some of the consumer advocates’ concerns, including fee disclosure policies. “If used correctly, prepaid cards can be far more cost effective than a regular checking account, particularly if you are someone who doesn’t have the money to set aside for a minimum monthly balance,” Rust said. But Susan Weinstock of Pew Charitable Trusts is concerned that the FDIC insurance is not being extended to

American Express announced Tuesday that its prepaid debit cards will now be backed by the Federal Deposit Insurance Corp., the latest indication that a market once shunned by established financial institutions is gaining ground.
The use of reloadable prepaid cards has exploded in the wake of the credit crisis that left millions of Americans outside the traditional banking system. But reloadable prepaid cards do not offer the same financial protections for consumers as checking accounts. They also operate with fewer regulatory constraints.
Facing increasing scrutiny from consumer advocates, the vast majority of card operators have opted in the past few years to carry up to $250,000 in mandatory deposit insurance per customer offered through the FDIC. American Express is one of the last major providers to sign on to that government backstop.
The coverage will apply to Bluebird cards sold at Wal-Mart stores. The card carries the American Express insignia and operates much like a debit or credit card, with features such as roadside assistance and mobile banking. Customers also can write checks with the account and load up to $100,000 a year.
“This product is really designed to be an alternative to traditional banking,” said Dan Schulman, group president of enterprise growth at American Express. “Technology is beginning to blur the distinction between those lines.”
This move could expand American Express’s customer base. Bluebird customers will now be able to have government payments, such as Social Security, military pay and tax refunds, deposited directly onto their cards. Government funds can be deposited only into federally insured accounts.
Demand for the cards exploded as nearly 1 million households exited the banking system between 2009 and 2011. The industry is expected to reach nearly $202 billion in revenue this year, compared with $28.6 billion in 2009, according to consulting firm Mercator Advisory Group.
In the six months since Bluebird debuted, more than 575,000 customers have signed up, placing more than $275 million into their accounts. Many of these customers either had no desire for a traditional credit or debit card or could not apply for such products because of their poor credit histories, Schulman said.
But consumer advocates have warned that prepaid card operators are not always forthcoming about their fees, including charges to load money, activate the card, speak to customer service or check a balance at an automated teller machine. They worry that card operators are steering lower-income consumers into these products without fully disclosing the terms.
The Consumer Financial Protection Bureau is expected to issue rules this year to address some of the consumer advocates’ concerns, including fee disclosure policies.
“If used correctly, prepaid cards can be far more cost effective than a regular checking account, particularly if you are someone who doesn’t have the money to set aside for a minimum monthly balance,” Rust said.
But Susan Weinstock of Pew Charitable Trusts is concerned that the FDIC insurance is not being extended to all American Express prepaid products, including a similar prepaid card offered through Target.
“Does it set a precedent that allows other companies to get into this space and avoid FDIC insurance?” Weinstock said. “Should those companies go under, the big question is what will happen to consumers and their money?”
American Express officials said the company is considering deposit insurance for its entire suite of prepaid cards.


Postal banking is making a comeback. Here’s how to ensure it becomes a reality.

Last week, the joint task forces put together by former vice president Joe Biden and Sen. Bernie Sanders (I-Vt.) to heal the Democratic Party at the end of a bruising primary revealed their policy proposals.
Among the most compelling suggestions was to make bank accounts and payment services more accessible to middle- and low-income Americans by creating new consumer banking roles for the Federal Reserve System and Postal Service.
The task force's endorsement of this change represents a homecoming for Democrats, pushing the party to the left and turning toward the economic ideas that Sanders has advocated throughout his career. But the history of this kind of banking policy reveals that only a concerted push from the grass roots will make it reality.
Although government banking represents a major departure from recent policy, the idea has ample precedent in American history. It rose to prominence during the Populist movement of the 1890s. As a counterweight to the inequality of the Gilded Age, Populists advocated offering bank accounts at local post offices, making direct federal loans to farmers and placing the supply of money and credit under the control of government officials.
These ideas bore fruit in the early 20th century. Between 1910 and 1916, a postal savings bank opened for business, government launched a federal agricultural lending system and the first central bank since the days of Andrew Jackson was established — the Federal Reserve System, which, unlike its predecessor, was placed under government authority.
Although working people benefited from these new policies, grass-roots interest in broadening access to public banking persisted into the 1920s, before becoming a subject of intense concern after the Great Crash of 1929. Over the next few years, Americans watched in despair as a banking crisis took hold across the country.
In a period before the Federal Deposit Insurance Corp. (FDIC) was created to protect depositors, bank failures became so commonplace that the possibility of losing one’s life savings haunted the national imagination. In 1930, more than 1,000 banks closed their doors. More than 2,000 bank failures occurred in the following year. People whose savings were held in these institutions risked losing everything. By 1932, many smaller cities resorted to the drastic step of suspending all local business activity for days at a time — bank holidays — to stanch this ongoing disaster.
The continuing deterioration of the economy created difficult conditions for banks in the early 1930s, but the incompetence of bankers — and even frequent episodes of white-collar crime — exacerbated this debacle. “We have seen millions of dollars of savings lost through inexpert and fraudulent management of banks,” admitted the president of New York City’s famed Bowery Savings Bank. The Depression had inflicted widespread joblessness and hunger on the nation, and the severe banking crisis was deeply worsening this agonizing economic downturn.
The disintegration of the privately owned and operated banking system persuaded large numbers of Americans that bankers were blundering at best and criminal at worst. They saw public banking as the solution — with working people at the forefront.
An organization of farmers in Washington state declared that “the private ownership and control of the financial and banking system of the United States has failed.” Similarly, organized labor in the state denounced the “gross mismanagement and oftentimes criminal handling of the people’s savings.”
The possibility of expanding the Postal Savings System garnered a great deal of public attention. The government’s savings bank required patrons to withdraw money at their local post offices, since it did not offer checking accounts. Accordingly, legislation to add checking accounts was introduced in Congress with the backing of labor organizations across the country.
Simultaneously, there was a grass-roots push to establish government banks and frequent calls to nationalize the entire private banking system outright. Labor unions and farmer organizations also supported such plans. The idea became so common during the Depression that a chemical worker claimed “nationalizing banks is nothing radical in any way.”
Even as thousands of banks failed, however, President Herbert Hoover resisted financial change.
The inauguration of Franklin D. Roosevelt in March 1933 ushered in new leadership as the banking system spiraled into collapse. Acting swiftly, Roosevelt declared a national bank holiday until government intervention — loans and reorganization — permitted banks to operate safely again.
This action saved the banks, but it did not make the public any more forgiving about the suffering they had caused. Continuing grass-roots demands for public banking kept bankers on their heels as Congress debated further change.
And the bankers lost. Thanks to overwhelming public support, in the Banking Act of 1933, Congress separated commercial and investment banking and created the FDIC, over the objections of the banking industry. New Deal policies also made credit more available to farmers and homeowners, expanded the money supply and aided the formation of credit unions.
But Roosevelt accepted the private banking system. In the face of a national crisis, he opted to save existing banks, rather than venturing into the uncharted waters of public banking. As one prominent banker acknowledged, “We bankers got off pretty light in the Banking Act of 1933.”
Because these measures addressed a number of financial weak points and stabilized the economy, they dampened demands for further change. After more than a century of frequent bank failures, such traumatic events practically disappeared. In another departure from the past, the banks stopped magnifying, and sometimes causing, economic depressions.
Americans began taking this more stable economic order for granted, and public interest in banking policy waned. As a result, in the mid-1960s, bankers encountered little public opposition when they successfully lobbied to shutter the Postal Savings System.
As voters paid less attention to finance, industry promoted a deregulatory political agenda that made the economy less stable and banking services less accessible. Banking “deserts” developed in poor urban and rural areas where scarce branches are insufficient to meet community needs. Because of high and unpredictable fees, alongside steep minimum balance requirements, maintaining a bank account is difficult for low-income Americans. A $90 billion payday loan industry emerged as an alternative to banks for millions of “unbanked” consumers who spend hundreds — and even thousands — of dollars annually to obtain small, short-term loans.
The increasingly pressing question of the unbanked — and financial access more broadly — has become inescapable in light of the recent obstacles to delivering stimulus checks. Faced with the economic challenges of covid-19, the federal government attempted to provide struggling Americans with some income — and the broader economy with much-needed stimulus — by issuing $1,200 payments to many people.
But because the banking system effectively excludes 9 million American households, the straightforward matter of getting this money to its recipients posed a problem, in many cases for the very people who most needed this income. This disaster presents the Federal Reserve and the Postal Service with a critical opportunity to make financial services more accessible.
The Biden campaign’s endorsement of government banking aligns with a long American tradition of advocacy for public banks. This change would expand access to affordable financial services, thereby raising the bar for existing banks, as well. Taking this stand with working people instead of Wall Street will appeal to many Americans, including key Midwestern voters who felt abandoned by the Democrats in 2016.
Still, parties produce aspirational policy statements every election cycle. Once in office, presidential administrations must establish their legislative priorities. The New Deal experience reveals that political momentum toward government banking can be stymied when an administration lacks enthusiasm for the idea. After the votes have been counted, transforming party planks into laws requires sustained advocacy by organized citizens.


Private sector lenders aren’t helping those underserved by banks

Charles Lane asked the right question in his April 2 op-ed, “Can the post office be a bank?” He just got the answer wrong. Mr. Lane asked “what’s the practical alternative?” to payday lending, an industry with a business model that often traps users into vicious cycles of debt. Mr. Lane wrote that lenders are a better alternative than loan sharks. He failed to report that payday lenders charge annual interest rates of 300 percent to 400 percent! They are “legal” loan sharks. Nearly 100 million Americans are underserved by traditional banks. Many are seniors who cannot travel very far. Postal banking is a practical, public alternative to the great need for financial services. It offers a business model to protect consumers from abusive practices with control over their financial lives. The arguments in favor are many: location and accessibility of post offices, experience with financial services, a popular and trusted public institution, and proven success around the world. Mr. Lane’s major concern is that postal banking “would short-circuit potentially beneficial innovation by the private sector.” Given the track record of the existing private-sector options — from banks “too big to fail” to payday lending — the time is now to institute a proven solution: postal banking. Richard Fiesta, Washington The writer is executive director of the Alliance for Retired Americans.