Bankers' Math -- Part Cinq

My wife and I just returned from a delightful month traveling in Argentina. One thing we discovered that was not so delightful is that Bankers in Argentina are just as bad as everywhere else, particularly in how much they control people's access to their own money and how they profit from routine transactions.

We found that small merchants in Argentina prefer cash over credit cards as payment -- this saves them paying the credit card companies a percentage for each transaction and fees for maintaining a credit processing account. Many of the restaurants and hotels we stayed in were managed by the owners themselves. These operations usually have a small profit margin, so giving 2-4% to a credit card company can really hurt. There is also a certain ... uh, shall we say "flexibility" in reporting cash transactions for tax purposes. Several of our hotels would not accept credit cards at all, and others offered discounts up to 10% for paying in cash. The same was true in many restaurants. I should note that this practice is not confined to Argentina -- we've encountered it with increasing frequency in other countries as well, for example in Belgium and France when we were traveling there a year ago and in Greece this past June. And we've found that it isn't restricted to mom-and-pop retail operations -- even Government-run museums and cultural sites in these countries increasingly refuse credit or debit cards.

The bottom line is that we need cash as we travel. In the old days that meant carrying a wad of traveler's checks (parents, you might have to explain to your kids what these are) and then regularly cashing them at intervals at some bank or currency exchange office, often a time-consuming process. These days traveler's checks are the most expensive and inconvenient way to get cash and we don't carry them any more, or we may take just a small amount as emergency backup funds.

ATM's (MSM's -- "money spitting machines," as we call them) are now the primary way for travelers to get foreign currency, even in the poorest and least developed countries. Of course, both the local bank and your own bank will charge you a fee for each transaction, and these fees have gone up considerably in the last year or so. As I wrote in Bankers' Math, Part Quatre , my bank here in Hawaii, First Hawaiian, recently doubled their fee for a foreign ATM withdrawal to $5.00 per transaction, presumably because the cost of electrons has skyrocketed. To our great irritation we found that all the banks in Argentina charge about $4.00 per ATM transaction, so potentially a traveler in Argentina will pay $9 every time he or she gets money! If you get $100 worth of pesos, that's a 9% surcharge -- rather exorbitant in my humble opinion.

One way to counter this is to withdraw as much as you can. For example, if you take out $500 in foreign currency, the fees will amount to just 1.8% of the transaction, and you will also reduce the number of withdrawals you'll need to make during the trip, lowering the total amount spent in fees.

Ah, but the banker's are on to this strategy!!! They limit the maximum amount of a transaction, and it is clearly to their advantage to keep it low so that you will have to visit the MSM more often. By the way, it isn't your bank that places this limit -- it is the bank that owns the ATM. On our recent trips to Europe and Greece we were able to withdraw $400-500 routinely. However, in Argentina we were limited to $250 at every bank we tried, which amounts to a charge of 3.6%, slightly worse than a credit card fee (as explained below, we do have a strategy for getting around this, but it isn't available to everyone). I wouldn't be surprised if lower limits and higher fees have also been instituted in Europe, but I don't know for sure.

Bankers' Math: lower limits + higher fees = more profit for us!

My wife and I are fortunate enough to qualify for an ATM card from our retirement investment company (Vanguard) that waives the transaction fee, and we also have obtained a Capital One credit card that does not assess foreign transaction fees. For the time being, then, we have held our own against these forms of Bankers' Math. However, our advantages here may be lost at any time because they are under control of .... you guessed it.... Bankers.

"Call" of the Wild

Once a month my local hiking club organizes a day-hike to some interesting area. Most of the people in the club are "mature" adults -- meaning the real hard-core young adventure types aren't with us. Still, the group consists of mostly fit people who are serious about exercise and enjoying the great outdoors, and the hikes are often in fairly remote and wild places.

Every other month the hike is publicized in the local newspaper and non-members are encouraged to join us. Not long ago one of these public hikes was a trek along an old historic trail that crossed some very difficult and remote terrain. The challenge of the trail and the isolated setting fostered an appreciation of the hardships and simplicity of an earlier time. I was enjoying the scenery and the physical exertion, chatting occasionally and briefly with fellow hikers, but mainly absorbing the uniqueness of the moment as I hiked alone.

From behind me I suddenly heard a very loud voice describing the beauty of the trail and how wonderful the hike was -- not unusual comments to hear but not at a such a startling volume level. When I looked back I saw a newbie talking into a cell phone, apparently so eager to share their experience with the person at the other end that they didn't mind violating the serenity of the group around them.

There are lots of aspects of this we could explore, like the need for norms of etiquette surrounding cell phone use, or the implications for society when the superficiality of technology-mediated relationships makes people desperate to maintain constant contact with others. The aspect I want to focus on, though, is how technology is changing our perception of natural settings and altering the way we interact with nature.

As my example indicates, many natural areas that used to be remote and cut off from easy communication with the outside are now accessible with a quick cell phone call. The access can include sound, still photos, and even video. Besides cell and internet links, gps technology makes navigation a matter of reading an lcd screen instead of paying close attention to the surroundings (I've written before about my own infatuation with gps -- see my blogs of 7/6/09 and 2/14/10).

This technology has made the "wild" seem less forbidding and more amenable to casual human activity, even when this is demonstrably untrue. One result is that people underestimate the risks and dangers that natural environments may pose. Rangers in our National Parks have seen this first hand, according to a recent investigative NYT article. For example, Jackie Skaggs, spokeswoman for Grand Teton National Park in Wyoming reports “Every once in a while we get a call from someone who has gone to the top of a peak, the weather has turned and they are confused about how to get down and they want someone to personally escort them. The answer is that you're up there for the night.” People with cellphones call rangers from mountaintops to request refreshments or a guide; in Jackson Hole, Wyoming, one lost hiker even asked for hot chocolate.

One particularly telling instance of how perceptions of nature have changed is recounted in the same article:

"One of the most frustrating new technologies for the parks to deal with, rangers say, are the personal satellite messaging devices that can send out an emergency signal but are not capable of two-way communication. (Globalstar Inc., the manufacturer of SPOT brand devices, says new models allow owners to send a message with the help request.) In some cases, said Keith Lober, the ranger in charge of search and rescue at Yosemite National Park in California, the calls “come from people who don’t need the 911 service, but they take the SPOT and at the first sign of trouble, they hit the panic button.”

But without two-way communication, the rangers cannot evaluate the seriousness of the call, so they respond as if it were an emergency.

Last fall, two men with teenage sons pressed the help button on a device they were carrying as they hiked the challenging backcountry of Grand Canyon National Park. Search and rescue sent a helicopter, but the men declined to board, saying they had activated the device because they were short on water.

The group’s leader had hiked the Grand Canyon once before, but the other man had little backpacking experience. Rangers reported that the leader told them that without the device, “we would have never attempted this hike.”

The group activated the device again the next evening. Darkness prevented a park helicopter from flying in, but the Arizona Department of Public Safety sent in a helicopter whose crew could use night vision equipment.

The hikers were found and again refused rescue. They said they had been afraid of dehydration because the local water “tasted salty.” They were provided with water.

Helicopter trips into the park can cost as much as $3,400 an hour, said Maureen Oltrogge, a spokeswoman for Grand Canyon National Park.

So perhaps it is no surprise that when the hikers pressed the button again the following morning, park personnel gave them no choice but to return home. The leader was issued a citation for creating hazardous conditions in the parks."

For me, the telling point in this account is the group leader saying that without the emergency device he would have never attempted the hike. As park rangers have noted, visitors who get into trouble often acknowledge that they have pushed themselves too far because they believe that in a bind, technology can save them.

As this example illustrates, technology may be insulating us from the reality of natural dangers and the necessity of relying on our own knowledge, skill, and courage in experiencing nature. We regard nature as an extension of our hi-def televisions, Iphones, and computers -- configurable to our own user preferences and changing interests, and as having an "Undo" button if we make mistakes.

The problem is that nature doesn't always play along.