Today I read through the Federal Reserve’s survey of consumer usage of mobile financial services to see if consumers were by chance using smartphones to obtain capital. Much to my chagrin, when it came to borrowing, smartphone users appear to use smartphones to access payday loans; at least the impression the Federal Reserve gave from this report. You can view the report here.
Why is this important? First, we are still muddling through what I believe to be a structural change in the economy. More Americans realize that the “work for the company my dad and granddad worked at for 40 years” days are long over. We have to create or own opportunities, our own jobs if we are to stay afloat. Depending on the enterprise we pursue, we may need financial capital in addition to our skills, expertise, available land, and social and political capital. Obtaining payday loans just won’t cut it.
Instead it appears that Americans are using smartphones to access consumer services such as checking account balances and depositing checks. Naturally a lot of convenience may be wrought out of the activity, but short of speeding up the velocity of money a bit ( I say that warily since I am not a monetarist. Do they still exist?), I see no contribution to resolving our most important economic problem, insufficient productive capital held by our people.