Cash Economy Has Its Hazards

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Master 20th century criminal Willie Sutton famously told police he robbed banks because "that's where the money is."

But for many ethnic groups, members of the underground economy and old folks, the money is not in the bank. It is stashed in the home and wannabe "Slick Willie" types pull stunts like masked home invasions to get it.

The violent attack and robbery in a West End home this week points up part of the problem. The victim is described as holding cash for several relatives - $100,000 in all. It sounds incredible to the average person with a check book and credit cards, but for a large extended family it may be the preferred system.

As a reporter picking up police reports, I learned of one startling variation on the cash-at-home syndrome - keeping gold in the house. The reports were all about Asian restaurant owners and entrepreneurs who converted cash to gold and all too often became the target of home invasions. Some took place with family members home sick from work or school, putting them in extreme danger from the intruders who expected to find no one in the house.

Many East Asians, Latinos and other ethnic groups prefer to keep their financial dealings among themselves, whether for self-capitalization of businesses, accumulating wealth to support overseas relatives or just because they may lack legal standing to deal with the U.S. banking system.

The nation's underground economy is nothing new. Working "under the table" or dealing drugs were precursors to what seems to be a burgeoning immigrant cash economy. During the 1970s there was lots of free advice on how to build "stash" hideaways between studs in the wall or in other hard-to-detect spots in the home. Unfortunately for many immigrant men who live in groups nowadays, there is no safe place to keep cash in their shared home space and they carry it on their person, making themselves targets for street assaults and robberies.

Seniors who recall tales of bank failures in the past century are chary enough of banks to have foiled an attempt about 20 years ago to place all Social Security payments in direct deposit accounts. Many would rather pay high fees at check-cashing places than have their money electronically bypass them and land unseen in the bank.

I did a story on attitudes locally when the Social Security Administration tried to force seniors into banking. Some never had bank accounts and were not about to start in their old age. Others could not easily get to banks to withdraw cash for daily use. A very few had set up all their bills electronically, so the money went in and out automatically and they seldom saw or needed cash.

What to do about the underground economy and family-based financial networks is a problem the government has yet to solve, but the SSA is poised to have another go at those bank-averse seniors.

According to a New York Times article, by March 2013, all 10 million SSA recipients who still receive checks will have to convert to direct deposit. This time around, the deal is perhaps sweetened by issuance of a debit card. As such cardholders know, it is easy to make most purchases with debit cards and it obviates the need for seniors to carry large amounts of cash. In addition, many stores and even post offices offer a cash-back option that saves a separate trip to the bank to get spending money.

In 1996, the government projected savings of $500 million over five years by eliminating printing and postage costs for checks. Well, that didn't happen, but maybe today's hard times will encourage seniors to want to save the government money. After all, a drop in costs could mean an increase in revenues for old-age benefits, right? (Who said ROTFLMAO?)

As for those big cash stashes in homes, word gets around and home invasions follow. It is a personal risk taken with the knowledge that violence or even death can follow. I can recall several local news stories where home invasions took a fatal turn. The most chilling part of this week's invasion may have been its effect on the young children who were exposed to violence and danger. Let's hope their parents and relatives will find a better way to keep assets.

--Bernice