Anthropologist and former CASBS fellow Noelle Stout teaches and researches at Apple University. Host John Markoff speaks with Stout about her 2019 book Dispossessed: How Predatory Bureaucracy Foreclosed on the American Middle Class, partially written at CASBS during her 2016-17 fellowship year, as well as her current work integrating social science into technologies like artificial intelligence.
Noelle’s book, “Dispossessed: How Predatory Bureaucracy Foreclosed on the American Middle Class”
“Life By Algorithms” by Catherine Besteman and Hugh Gusterson
Center for Advanced Study in the Behavioral Sciences
@casbsstanford on twitter
John Markoff: From the Center for Advanced Study in the Behavioral Sciences at Stanford University, this is Human Centered. I'm John Markoff. Today we speak with CASBS Fellow and Research Affiliate Noelle Stout. Noelle was an associate professor of anthropology at New York University, and she is now a professor at Apple University. Her research has won support from the National Science Foundation, the American Council of Learned Societies, and the Furman Center for Real Estate and Public Policy. We discussed her recent book, Dispossessed, a study of how a predatory bureaucracy foreclosed on the American middle class. Are you a child of Silicon Valley? In a sense, you grew up in San Jose.
Noelle Stout: San Jose, yeah, that's right.
John Markoff: Was it in the '70s that you were growing up? I'm sorry, '60s, '50s? Sorry.
Noelle Stout: '50s, '60s, are you trying to guess?
John Markoff: Was it already Silicon Valley?
Noelle Stout: Yeah, no, it's a good question. My parents met on a commune in Butte Creek Canyon, so outside of Chico. In the '70s. And then when they split after a few years, we moved to San Jose to live with my grandparents. And so, yeah, so that was '78, I guess. Yeah, my mom was a secretary at Measurex. So there's some definitely— and a lot of people worked at HP at the time. It was in Silicon Valley, but a different version, right? An earlier incarnation.
John Markoff: And you went to high school in San Jose as well?
Noelle Stout: Yeah.
John Markoff: Yeah. So you really are a child of Silicon Valley.
Noelle Stout: Yeah, yeah, yeah, for sure.
John Markoff: That's great. And were you— Were you aware of— before you left and came back, were you aware of the technology economy in the Valley or even the culture, or was that sort of—
Noelle Stout: I think it was just completely— it just was part of daily life. You don't really notice it until you leave. But now that I'm older, because then I was gone for graduate school and research and things, and now realizing that there were times when we would do things like people would hire a friend and I to work in their garage. Assembling computer chips. Did that really happen? Did you do that?
John Markoff: Yeah, yeah.
Noelle Stout: It's like, you know, is that— and I just, you just kind of take it for granted growing up that it's normal, but then later you say, oh wait, this is really, this is Silicon Valley all the way.
John Markoff: Absolutely.
Noelle Stout: Yeah.
John Markoff: That's so cool. So yeah, were you wire bonding? What were you doing? You were packaging?
Noelle Stout: I don't even remember. No, yes, I don't even remember actually.
John Markoff: 'Cause you know, that's, that was a big part of the early Silicon Valley economy was this homework that was done.
Noelle Stout: Oh, right.
John Markoff: That's right.
Noelle Stout: That was it. I was part of that. Yeah.
John Markoff: Yeah. You should have been doing field research.
Noelle Stout: I was in a way, I guess. Yeah, no, but I think it seems like what's the most striking coming back, living in New York City, because I was at NYU for 10 years and we were in the Village in Manhattan and at NYU faculty housing. And there was this idea that, oh, someday I'll go back to California and we'll buy a house and we'll have this normal lifestyle and New York is so expensive. And then we got back and it's, I can't believe what's happened here. It's worse than Manhattan, you know, and just the intensity of that inequality. So many of the people that I grew up with have left because they either they owned a house and they cashed out and they moved somewhere else where they could afford to live or they, you know, couldn't afford to rent. So it's a whole generation of folks that I grew up with in this working class community who have been exiled really because it's so— because of the housing cost is so insane.
John Markoff: A lot of them are out in the Central Valley, actually.
Noelle Stout: Yeah, yeah. Fresno or Oregon. A lot of people have retired and moved up there.
John Markoff: Well, let's talk about dispossessed and how your path in. Was Brooke, your friend who you describe in the introduction, your path in, or was it broader than that?
Noelle Stout: No, what happened, I had returned from Cuba in 2008, and while I was in Cuba, I was studying all of this process by which the introduction of capitalism had disrupted all of these really intimate social relations, basically. And so I kind of had that in the background, and I arrive in 2008, and I start hearing these foreclosure stories. Circulating in my family. So as I mentioned, I'm from a working-class community in California. And at first it was kind of like just bad financial news from home, and I wrote it off. You know, it wasn't that unusual that people in my family and kind of social circle would be having some kind of financial struggles. But then it started to be friends who were more middle class or came from middle-class families who were teachers or social servants or administrative, you know, assistants in a hospital. And suddenly they were going through foreclosure and they were facing mortgage default. So it started to feel like a much bigger story, and then of course we were in the midst of the financial crisis. And so it was at that point that I felt like, "Okay, something's really happening here where this kind of path of upward mobility for working to middle-class Californians is suddenly changing. There's something— the rug's really getting pulled out from under us. So how can I tell the story, what's going on?" So I went to Sacramento where I had family Sacramento was really hard hit by the crisis. I'm sure you remember it was like, you know, between 2008 and 2009, 482— the foreclosures increased 482%. So defaults are just skyrocketing in the low-income community in the Sacramento Valley. So in Oak Park, which is low-income, primarily Black and Latino, it's only, you know, 10 avenues long or 2 miles wide. And they had over 6,000 foreclosures between 2008 and 2012. So basically decimated. I mean, Communities that have been built up over generations just completely wiped out. And so I started there because it was hard-hit and because I had cousins and family members who had gone through foreclosure. Because with this topic, you can't really cruise up to Applebee's and say, "Hey, John, you lost your house. Why don't you tell me about it?" You really have to know people. You really have to gain their trust. And people who've been through foreclosure are more likely to know others who have also been through the process. So I started there, and I was hoping to do a project on financial shame, so looking at how issues around poverty or financial failure were internalized as a kind of personal shame, how we individualize them rather than to see them as a broader social issue, which is a depoliticizing process. And when I arrived, no one really wanted to talk about shame. It wasn't what I had expected. People would start saying, "Yeah, at first I felt embarrassed. I didn't want my family to know. Friends to know. But quickly they became enraged because they were involved in these completely Kafkaesque bank processes of trying to secure federal assistance. That had really dominated their experience to the point where they were spending hours a week and months, if not years, trying to modify their mortgages so they could stay in their homes. I wasn't really interested in bureaucracy. I wasn't really planning on studying that, but it was just really where all the stories were pushing me. They were bringing piles of paperwork to our meetings. And just really wanting to go through the process. They really wanted answers. And for them, that was really the break in the social contract, was really around the treatment that they were receiving at the hands of the banks after 2008. So it wasn't even that, you know, the mortgage market was crashing and that their homes were worth less than what they owed, but it was they expected a certain kind of reciprocity or a certain kind of respect from the lender. and they weren't getting it. It was actually the opposite. So for me, that was a really important break in a kind of middle-class expectation to have a financial institution offer something to them because they saw themselves as aligned in a way, and that was kind of a way of life that was disappearing.
John Markoff: This sense that they were in a Kafkaesque kind of trap, was that— is there some sort of concept of social fairness that was violated on the part of the borrowers? Is that the right way to describe it?
Noelle Stout: Yeah, yeah, I think that's a great way to describe it. That's a great way to put it. There was a sense that, you know, anthropologists talk a lot about debt as a social relationship. And so we understand these debt ties, not that money is symbolic, it's social. And so if you have a long-term debt contract or relationship with someone, so if I give you something for your birthday, my birthday rolls around, you don't give me anything, I'm a bit miffed, right? So there's this idea that by owing someone something, it actually secures a future relationship. And so you can imagine a mortgage with a 30-year Contract would create a kind of expectation for mutuality over the course of the loan, and that had been completely disrupted because what they were finding instead is that they would send 100 pages of paperwork to the bank; the bank would lose it. Then after 30 days it would expire, so they'd send it again, and then they'd say it would get lost in the system. These were people who had just lost jobs or in the midst of cancer health crises. They were about to lose their home. It's kind of like if you are about to lose your house and it's like your worst experience at the DMV on steroids. It's just unbelievable the kinds of errors and misinformation that they were facing. And part of that, what I want to show in the book, is how that was— it wasn't just inefficiency, that actually it was really the weaponizing of bureaucracy against homeowners after the crash that was really unique to this time period.
John Markoff: —So they had extracted rent or capital from them before the crash. I mean, they had this system that— so what did they get by treating them that way after the fact? From a bureaucratic point of view, what was the purpose of that bureaucratic system?
Noelle Stout: —Well, it's a great question. And one way— and they didn't understand it at first, and neither did I. I thought that part of it had to do with the privatization of federal assistance. So after 2008, Paulson, who was the Treasury secretary under Bush, had this idea that they would privatize all of the aid. So federal— they have TARP bailout funds. It's over $300 billion that's earmarked for homeowners. And what they do is they decide rather than having the government dole out that assistance to homeowners, which is what they did after the Great Depression, where the government took on the toxic mortgages of Americans and then worked with them to stay in their homes, they decided to outsource it to the corporate lenders. So Wall Street banks that had fomented or profited from the crisis. Which is a horrible idea. So it's like you've been shot and then you show up at the ER and the shooter happens also to be your doctor. Like, your chances of survival don't look so great, right? So they're in this position where, you know, then Obama's elected, Geithner comes in as Treasury Secretary and moves forward with this architecture. He keeps the structure in place. So what they did was they made Bank of America and Wells Fargo and other lenders responsible for doling out assistance. And I had a chance to chat with him briefly about it, and he— Geithner said at the time they realized that they would be seen as, you know, awarding the arsonists, he said, because they were basically funneling all of this money back into Wall Street. All the public funds were going back to Wall Street rather than directly to the homeowners. But he felt, you know, and others in the administration felt that there wasn't the political capital at the time to support a different option, a public option that would more closely parallel what had happened during the Great Depression. And so it was a colossal failure. Denied 70% of homeowner applicants assistance. And this is mostly through something called the Home Affordable Modification Program, which sunsetted in 2017. So during that time, 9 million homeowners who wanted to stay in their home and continue to pay on their mortgages were evicted. And so we see this massive dispossession, this massive bank seizure, which I see as a form of accumulation by dispossession, which is a Marxist idea. Marx talks about it in terms of primitive accumulation. And he uses it to talk about the transformation of feudalism to capitalism. But David Harvey, who's a Marxist sociologist, and others have taken the term and applied it to kind of our contemporary moment today to show how at a moment when capital is no longer being generated, there has to be some kind of massive redistribution upward. And so the way that that happens is through violence, theft, fraud. It's similar to colonialism, and it's kind of—
John Markoff: With the state playing a key role in facilitating the transfer of wealth. Exactly. So it was a second theft. Basically. Exactly. Right.
Noelle Stout: Right. Yeah, exactly.
John Markoff: You know, when I read your discussion about social bonds and the role mortgage paid— played, I'd sort of like to take a left turn for a second just because it fascinates me. Is there a parallel? So let's see. One of the things that— the stories that I wrote that got the internet immune system going more than anything else was a story based on a researcher at Stanford. I think he was a sociologist. Who basically was looking at the time people spent watching television, and then he jumped to the internet, and he found that when people were spending time on the internet, he argued that they were not having face-to-face interaction with people, and so they were solitary. And he categorized that as being solitary, and people were being atomized by that. The internet immune system hated that because they, at that point, they believed in virtual community, that that was the thing.
Noelle Stout: Yeah, that's really interesting, right?
John Markoff: But his argument was that people were actually isolated. So I wondered about the role that social media might play in breaking social bonds.
Noelle Stout: Yeah, that's really interesting.
John Markoff: Do you think that there's a parallel?
Noelle Stout: Yeah, I mean, I think there was— it was really interesting how social media worked in the Sacramento Valley around this issue, because what I found was for low-income communities that had been targeted with subprime loans— so these are people that had been excluded from credit lending through redlining and other processes for years. and then they were just bombarded with offers for subprime loans in the lead-up to 2008. In those communities, there was a real kind of community activist infrastructure, which after 2008, they had face-to-face meetings, community organizing meetings, protests. They would all organize to go to City Hall where they would be selling foreclosed homes and prevent the sale of some people who were getting evicted and actually worked in a couple of cases. For residents in Oak Park. So there was this real face-to-face kind of interaction. They didn't expect the banks to help them, which was really interesting because they didn't have that same kind of middle-class expectation that financial institutions would be aligned with their interests. And so they— the social media piece didn't really show up there very much. But where it was really prevalent was the middle-class communities where people would go online, they'd be on Reddit. There were, you know, different activist organizations who would organize blogs online. They would post, you know, and they would kind of argue things out on Reddit or on other Craigslist housing forums. That really was interesting to me because although they were really radical oftentimes online in terms of their critiques of the banks and their critiques of what was happening, they would not— it didn't lead to broader social mobilization around the issue. So it was in a sense very individualistic, so even though they're ideas might be radical, what would end up resulting would— they would then decide to squat in their homes without repayment. So there was this, you know, one protagonist in the book. I call him David Sanchez. He was a veteran. He'd never missed a credit card payment. He never missed a loan, nothing. He was really conservative. And through this process, his wife had died of cancer and Bank of America was trying to evict him. He was applying. He was the perfect candidate for a mortgage modification. I mean, this program was designed to help him, to save him. And it was rejected because his wife's signature wasn't on the application. She had just passed away. And so they went through with the foreclosure, and he decided to squat in his home. He said, "You know, I've never missed a payment on anything. I'm not leaving. They can come and kick me out." And he stayed in his home for a year without paying. I mean, what a radical act for a guy who was a really conservative, by-the-book kind of person. And a lot of that came through his interactions online. I mean, he would go online and he would read that he wasn't the only one this what was happening to, that Bank of America was also foreclosing on people for what he saw as no reason, who were really fighting and struggling to stay in their homes. But it didn't lead him to mobilize in a broader sense. It didn't lead to the same kind of activism. He didn't join Occupy Homes. He didn't join a community organization around housing justice. It was kind of an individual, isolated relationship that he had with others through this online network.
John Markoff: Did it change his political worldview at all?
Noelle Stout: It's interesting, you know, after Trump was elected, I was really curious about that, and I talked to some folks who had supported Obama who voted for Trump in the aftermath because there was this sense of social and political abandonment that was really pervasive. And, you know, they were— this is a really— maybe I think this might be unique to California, but there's a kind of libertarian sense of, you know, socially really progressive and really liberal, but then also this I mean, you probably could explain. There's also— yeah, there's a kind of sense of suspicion around institutions, and I think for Trump that he embodied that for them in a way, ironically.
John Markoff: And it was interesting to me that I had forgotten or didn't know the roots of the Tea Party, which I saw that you cited coming out of this. I didn't understand that it was that directly related to the crisis.
Noelle Stout: Yeah, that's right.
John Markoff: Did you move to Sacramento?
Noelle Stout: Yeah, we lived there for 2 years.
John Markoff: So you picked up, and that methodologically, you were not airdropping in, you were there.
Noelle Stout: Yeah, as anthropologists, that's the gold standard. You can't just drop in. So it's at least a year is the litmus test for validity for our field.
John Markoff: And so academically, you weren't teaching, your work was your research, and that was a full-time— Yeah. Project for you?
Noelle Stout: Yeah, no, I was lucky to have funding from the National Science Foundation to support the project. And so, no, I, you know, so I was with people as they were applying for mortgage modifications, waiting in the waiting rooms as they were on hold, mortgage modification fairs, and then move, like helping them to move when things fell through typically. So really trying to integrate myself into their daily lives as much as possible.
John Markoff: And just to share a little bit about your methodology, you'd spend the day, days with people. You weren't filming in this case. No, no. Did you think about that? Did you think about it?
Noelle Stout: I did. I did. I thought about doing a film there, but it's just such an added layer of exposure. And it's interesting, you know, with this project, because so many of the people, I either knew them or they were friends and family, it really added another deeper sense of, you know, responsibility as a researcher, which I think I should have always had. But, you know, even thinking about what's the COVID of the book, we had this this great photo of Carol Coats, who was a victim of subprime lending. She was a senior. She was getting evicted. And it was this amazing shot. And I thought, you know, how are her grandkids going to feel about having her on the COVID of my book? Because I was— you know, my family members were going through it, too, and so many of them wouldn't want their pictures circulated. So I just felt like in this case it was not— it just didn't really make sense. Yeah, but I am working on a digital storytelling project now where I'm taking a lot of photos that homeowners had taken, maps, memorabilia, and stories, and trying to put it together in some kind of way for online circulation. But I'm actually thinking I might use that to talk more about the Paradise Fires, which seems like the next wave of dispossession in California. Interesting.
John Markoff: And are there tools, ready-made tools for you to build digital stories, or do you have to build your tools along with it?
Noelle Stout: Yeah, no, I mean, I have a web designer and we're trying to figure it out. I was inspired inspired by things like Sandy Storyline after Hurricane Sandy. They did a great thing where they had producers actually in the field going to record people's stories. And we don't— I probably won't have that kind of reach, but yeah.
John Markoff: Yeah. That's a really nice idea. And so moving to the fires, have you collected or are you going to collect?
Noelle Stout: Yeah, I don't know. I mean, I've kind of— I wanted to move on and to do this project on AI and ML, artificial intelligence of machine learning and fairness, especially around issues of gender. But then California just keeps burning to the ground. And so I have— It'll always be there. I know. So 4 generations of my family lived in Paradise. No one lived there at the time of the fire, but my great-grandfather was a foreman on an apple orchard in Paradise, and everyone lived in a big house there. So I feel really connected to it. At first, I felt kind of chosen to write something given that I just finished this book about dispossession in California, Northern California, and everything's on fire. Then as I started to dig, the role that PG&E played is so key, and that most of the discourse around it we're seeing tends to center on global warming and climate change, which is still very important, a huge kind of factor in the fires. But for both the Kincaid Fire that we had this year and for Paradise Fire last year, PG&E was directly responsible. So they're not maintaining power lines, they're not keeping, you know, centuries-old electrical equipment updated, and it's leading to the fires. And so the idea is that they don't have the money to do these infrastructural, you know, improvements, but yet they paid out millions of— over $5 billion, I think it was, to shareholders after the fire when they declared bankruptcy. The CEO is making upwards of $6 million a year. It's really about this fight between shareholder value and the financialization of utilities and the public safety of people who are living in towns around California. 83 people died in that fire. 1,000 were missing for the first few weeks afterward. and the entire town is completely razed. I mean, I was just there over Thanksgiving and there's nothing. I mean, it's completely gone. And so to kind of get used to that as a new normal, many articles, you know, Time, CNN this year said, "California's new normal, we're on fire again, it's fire season," but that actually isn't the case. This is really specifically the result of, you know, putting shareholders and profit over public safety. And so it feels So it feels related somehow, and so it feels like I need to say something about it, but I'm not sure the venue yet.
John Markoff: Yeah, okay. You spend the day with the people who are your sources in the community. What's your process for taking notes? And do you do this by hand or do you do it digitally?
Noelle Stout: Such a journalist question. I love that question. Yeah. It's a combination. We do a lot of— I do a lot of kind of informal observation. We call it participant observation, where anthropologists go into a site and you participate in the daily lives of the folks that you're studying. Things like, I myself would— I had a family member who was facing mortgage default, and so I, on her behalf, went through the process of trying to apply for a mortgage modification just to see what it would be like. There's that kind of— the deeper you can get as a participant, the better. Then most of it, Clifford Geertz called it deep hanging out, which I'm sure you'll appreciate. That's exactly what we're talking about. There was a lot of deep hanging out. Then I would tend to take notes after. At the end of the day, I spend a lot of time trying to remember everything that had happened and taking field notes, and then doing more formal interviews as things progressed, as people got more comfortable, then I would do a set of formal interviews.
John Markoff: I also— the fact that, you know, you were so much in the territory of your family made me think about the challenges of objectivity. Oh, completely. Because, you know, one of the biggest dangers as a journalist is you get close to your sources. That's right. The closer you get, the better it is, but the more dangerous it is too in terms of objectivity. So how, as an anthropologist, do you pick that apart?
Noelle Stout: Yeah, no, that's such a wonderful question. I love that. You know, there— we've thought a ton about it. Anthropologists have given up the idea that this is an objective science, and it's much more of an art of interpretation. And so I didn't have the same kind of mantle of objectivity that I might if I was a sociologist focusing on statistics or something. So there is more room. Anthropology really now is more in the humanities in that respect. But there has been a lot of discussion. Lila Bulagod has this great concept of a halfie ethnographer, where you're half in, half out, because although I had family there. I've spent the majority— and I grew up in a working-class community. I've spent the majority of my life in elite academic institutions, and I'm no longer from there. And so as much as I was an insider, I was also an outsider, and that creates certain dynamics where people feel maybe more exposed or more vulnerable, or they're thinking differently about you. So you have access, but then it also complicates the relationship in a way. But I, yeah, I don't think that objectivity is the goal. I think it's really just about storytelling and then trying to zoom out to get a broader sense of an overall view of what this moment of, you know, American capitalism looks like, and that that's really hard to do. A lot of the research focused mostly on the lead-up to the crash, so, you know, what triggered the mortgage crash, a lot of really great reporting around Wall Street greed and corruption. Then after, there was this kind of desert where there were only a few great books, but just a few of them that focused on homeowners. George Packer talks about this kind of the difference between the Great Depression, where we had all this iconography of women and children and tents and covered in dirt and dust, and then after 2008, it's mostly just images of abandoned factories and abandoned homes, but the people were really missing from the story. And so I think, too, there's also a danger. Not only did I want to talk about the people going through foreclosure, but also the lenders and the lending employees who are making the decisions and pushing through foreclosures on behalf of big banks and try to understand what the relationship looked like. And I think it helps us to zoom out if we can say, "Okay, in the decade after the crash, what's the endgame? What happens here? How does it all turn out?" We can see then that the mechanism of bureaucracy pushing homeowners out, and then also private equity funds came in and swooped up huge swaths of neighborhoods all throughout California. So we can see the whole cycle, then it's not just a focus on a family going through foreclosure, but we can kind of get a sense of what the broader picture of American capitalism looks like today with that perspective.
Narrator: Well, and it worked. They got away with it.
Noelle Stout: Right. Right. Definitely. Yeah.
Narrator: From the bank's perspective, this was a fantastic mechanism to employ. Right. They faced no repercussions.
Noelle Stout: Yeah, they got bailed out.
Narrator: They got bailed out. Yeah. Yeah. They were given the public's money, right, to help people who wanted to pay their mortgages, and they just took it and told them to—
Noelle Stout: and some— and there was a federal agency called SIGTARP, which was developed to oversee the bailout funds. And so they were supposed to monitor the distribution of funds and And they found that the lenders were not only failing to give money, you know, to qualified borrowers, but they were— there was a lot of fraud. So, you know, we ended up paying for millions of homeowners who never received assistance. So say I was Bank of America and I would say, OK, John got the modification. And so you're going to— the government's going to give me $1,000 for the modification. I dropped John out of the modification program. So he, you know, he loses his home. He goes through eviction. But I keep that $1,000. And that happened millions of times. I mean, we paid them millions and millions of dollars, public, the public money taxpayers did, and fraud was completely rampant. So they were taking advantage of HAMP to funnel more money to the banks. So there were two victims.
Narrator: There's the homeowners who are not getting the assistance that they deserve. And then there's the public, right? The taxpayers, their money was taken to help them.
Noelle Stout: Exactly. Yeah, but SIGTARP had no teeth. I mean, I interviewed a bunch of lawmakers and policymakers, and the idea that SIGTARP had no kind of— they couldn't leverage fines. They had no ability to legislate around fraud. And so it was really just an oversight committee.
John Markoff: I was really interested in the fact that, you know, you go in to look at shame, and you see this bureaucratic thing. It's sort of like you were surprised. Were there other things? You get into the field, the world is not as you expected. I mean, that's one. Was there anything else that you stumbled upon?
Noelle Stout: Yeah, I think I was surprised by— so when I first started interviewing everyone, there's this great journalist, Rachel LeBrock, and she had written a piece for the Sacramento News Review. She's just so smart. She's really inspiring. And she had been through this process of trying to modify her mortgage, which would bring down her payments to stay in her home. And she was working with Caldwell Banker. And so she, in the article and to me, described this process where there was this public organization of HAMP. So there was this public aid fund, HAMP, and then there was her banker, and that she would be getting, you know, one message from one organization, from the pub, from HAMP, and then another from her bank. And that they weren't communicating with each other. And so that was kind of the story to begin with. OK, so there's this miscommunication. It's, you know, inefficiency, bureaucracy between the government and the banks, the private sector. And then I went to interview Katie Porter, who is actually now in Congress, but at the time was the— she was at UC Irvine Law School, and she was also the head of the mortgage— California mortgage settlement. So kind of monitoring where the funds were going. And she said, "Oh, there is no HAMP office. You can't call a HAMP office." She's calling her bank, and her bank is giving her the wrong— like her bank is saying one thing on the one hand and another on the other. And so it was all just within the bank. And so that was a surprise for me, that even really smart people who were involved in the process, who were writing about it, didn't understand the kind of architecture of this program and the depth of the fraud. That, for me, felt like someone really needs to tell this story because there's this sense that even if you're smart and you know what you're doing, it was so hard to get a broader sense of what was happening. I think that was a big surprise for me. Then also just the extent to which people were losing hope. I knew that they would be upset about foreclosure, but a kind of complete sense of just despair about the government and about the banking system and really this evolution of what I call post-middle-class subjectivity, so this arrival of American life after the middle class, where these ideals that had really been developed after World War II about the American Dream and about hard work and —much of that was subsidized by the government, and that's how it worked—but that that was really fading away and that there was this awakening, this moment of reckoning, really, for folks, where they could see that the kinds of expectations that they had for their lives no longer made sense.
John Markoff: So how much does that explain the rise of Trump?
Noelle Stout: I mean, I think it has a lot to do with it, honestly, that there's a kind of sense that it's like, "Let's burn the place down." in a way.
Narrator: You mentioned the bank employees. Yeah. There's this other half of the story here. Yeah. And the people that these homeowners are engaging with, yeah, aren't the puppet masters of the banks, right? These, these are just— they're not even middle management, right? They're just your everyday paper-pushing employee. Yeah. What was their sense of all of this unfolding? How aware of the fraudulent activity were they? Yeah. What were their responses to it? Did they suffer a kind of moral injury?
Noelle Stout: Yeah. Yeah, no, definitely. That's a wonderful question. I think many that I talked to had a kind of sense of optimism when they started. So they thought, I'm going to work, you know, on giving— helping homeowners stay in their homes. So we have all this federal money and I'm working at Bank of America or Wells Fargo. And so we're going to go in and I'm going to help homeowners save their homes. And then they start seeing, okay, so they have 100 cases that they have per week. To work on, and then every week those cases are reshuffled. So you get a list of 100 homeowners, and you start to work with them, and then at the end of that week, that moves to someone else. The computer system, I mean, one of them was still running on MS-DOS, so this idea that they couldn't find any paperwork in the system, and then they start seeing the same homeowners cycle through again and again, and they start understanding that this is really like a clown show. This is a complete joke. Many of them, I mean, one even admitted to me that he wasn't— the training that he received was so minimal, and he was working with— he was barely a Spanish speaker. He was working with Spanish-language customers, and he mistakenly told people that they had received a modification and that their home was saved when that wasn't the case, that it was a trial period of a very short time, and within a few months they would go through the process of default. So just, I think he actually ended up going on antidepressants to stay in his job and then transferred to a different role in the bank where he was working in sales and said his depression lifted once he was out of that role in mortgage modification. So it took a tremendous toll on them. I mean, I talked to one mortgage modification specialist who talked about sneaking out phone numbers of homeowners and calling them after hours and telling them to declare bankruptcy and to stay in their home without paying. Because he had developed an emotional attachment, I mean, he was dealing in one case with an elderly man who said to him, "I go to the store, and I have to decide whether I should get my heart medication or if I should continue to pay my mortgage. I don't know what to do." And this guy had been a— he was a retired teacher. He'd spent his whole life in the public school system. And so he said, you know, he called him after hours, knowing that if that was found out, that he would be fired. And so I think, you know, these were oftentimes people who are from Sacramento Valley. They had friends and family going through foreclosure, and they were also trapped in this financialization process where they had worked in sales before during the boom, and then they were unemployed or retrained as modification specialists after. They were also part of this process of the decline of the American middle class where they were experiencing it in a similar way.
John Markoff: What was the process of finding the employees different from sort of using—
Noelle Stout: Yeah. No, I, some came through connections of people I knew, but mostly through LinkedIn. I would go, yeah, yeah.
John Markoff: So blind, blind cold calling. Yeah. How often did you get the door slammed?
Noelle Stout: That's a good question. I think I've tried to forget that, but it was probably about a 10% yield or something. But then once I met a few, then they knew others in the industry. And so that's, it worked out that way. But then one thing that, you know, I'd love to hear your opinion on, John, is after— when I was publishing the book, I had to change the names of the lenders. So I couldn't actually use Bank of America or Wells Fargo, in part because I, you know, I consulted with a literary attorney who said if I— if it went to court, I would have to reveal my sources. And a lot of these folks had signed NDAs. Some of them were still working in the industry. And so it just felt like a real David and Goliath moment where it's like, I have this great story. And it's time to really call out these, you know, corporate banks and Wall Street banks for what's happened. But if I do, then it puts these people at risk. And so, you know, I don't think it changes the story that much. I think people kind of get the picture, but it was really disappointing.
John Markoff: Did the banking community react to your book in any way that you could measure? Did you?
Noelle Stout: It's a good question. I, I have— I'm actually doing a keynote at the Phyllis Research Group in Irvine in a couple of months where I'll be meeting with the heads of banking unions. So we'll see like how that works out. So it'll be, you know, but I haven't heard from BofA yet. That's what you're asking.
Narrator: Yeah. Yeah. Yeah. Would they just say it's unintended consequences?
John Markoff: They didn't sue you. So obviously. Yeah, it's— I understand the dilemma. I mean, maybe you could put another hat on and do this as investigative journalism and do it in a different context and get away with it. Had you completed this when you came to CASBS?
Noelle Stout: I was still writing. Okay, so you used the time. Yeah, this is the time to finish it.
John Markoff: So did your time at CASBS sort of play any role in your perspective? Yeah. Structurally, what did you have here in terms of the people you could interact with?
Noelle Stout: Yeah, it's interesting. My year, there were quite a few anthropologists, which was great. Steve Feld was terrific and helped me to think about this issue of reciprocity in a different way. He'd been thinking and writing about that for a while. Caitlin Lizalum was here, and she was working on student debt, so college debt. She also has a great book out. But it was honestly not so much the anthropologists that changed my work, but having to expose explain what I was working on to people who were outside my field, and also seeing people really grapple with big questions. So thinking about it not in this siloed kind of mode that anthropologists tend to work in, but to say, "What is the bigger story here? What's the real story I'm trying to tell?" Rather than just this microcosm of a relationship between a homeowner and a lending employee, what's the bigger picture? That push to make it relevant and to kind of tap into a wider story about the American middle class and the transition from an economy that focuses on exploitation of labor to one that focuses on exploitation of people's debts really, I think, took the project to the next level and really forced me to think about how I could carve out a place within public anthropology, and rather than just engage in debates about reciprocity and debt that we've been talking about for centuries. And that really came from just seeing— I was so inspired just to see people who are taking their research at CASBS and trying to answer these really big questions. You know, just to have the luxury of doing that for a year, I think really changed completely the kind of scholarship I do, for sure.
John Markoff: But before we leave, I really want to hear just a little about your interest in AI and machine learning and the related technologies. So how are you going to sort of pick away at this and approach it?
Noelle Stout: Yeah, no, I'm so excited to start a new project. I'd like to do something more cheerful. I don't know if AI and ML is the answer to that now. But I was like, wouldn't it be fun to do like a funny project that makes people laugh when you present your work instead of just freak them out? But so yeah, there are kind of two threads. And this work really, really grew out of work that I was doing when I was at CASBS, where Margaret Levy invited me to help pull together teams of social scientists and technologists to develop AI research that would address major social issues. And it was through that process and those conversations that I saw that they're— how open technologists were to hearing from social scientists early in the process and how well-meaning they were and how they really felt that they were creating technologies that would improve the world. And so maybe I was naïve, but that was a bit of a surprise to me that they felt like they were doing things that were maybe not in the heart of social justice, but in the neighborhood of or adjacent to improving between life for people. And so that kind of intention, I was really impressed by it. I was really curious about it. And what tends to happen is a technology is developed and then they bring in social scientists to study the downstream effects. So we're always really late to the party. It's like way too late to make any changes. And so I became curious about that and started talking to people who were involved. And it seems like, you know, and that's part of what led me to Apple University. But there are kind of two threads within AI when we're thinking about gender. One is a discourse that tends to focus on getting more women involved, more technologists involved. And Fei-Fei Li at Stanford, a bunch of people have been involved with that. It's a really important project. And that's kind of one way that the story gets told. And then the other is, you know, has to do with fairness around AI and ML and issues of fairness. That tends to focus more on class and race. And things like facial recognition, prison sentencing, job recruitment procedures that are outsourced to automation, and less on gender. And so there's this kind of gap there that I'm interested in exploring. And there, I think even if we bring more women, we definitely need more women technologists. Women have a huge, as you know, presence in early computing. In the '40s, they were the first software engineers with ENIAC. And have really— were pushed out beginning in the '60s, but really in the 1980s were pushed out as the personal computer exploded. And so the men had much more experience when they were showing up at computer science departments. That story is really important. I think we should retell it. But more women technologists doesn't necessarily mean that the technology will be more fair. So we can't assume that. All of the technologists really need to learn to do critical gender analysis, which is where we think about What could be the unintended consequences of these technologies that we're developing? How can bias around gender get baked into the things that we're focusing on? And there are some interesting directions. Some, you know, it's feminized voice assistants. A lot of it also could— I'm interested in how we decide what problems need solving with AI and ML. Things like why would caretaking, which seems like a— which I know actually is a very complex task, why would that be open? To automation and other things not. So there seems to be kind of a gendered understanding of labor and work that also gets built into how we design technologies and think about problems that need solving.
John Markoff: You know, it just occurred to me while you were speaking, are you in touch with Monica Lamb? Do you know about her work with Almond? No. Because you were looking— to the extent you're looking for a place to find speech assistance design and stuff, she's working on what she describes as a Switzerland of speech assistants here at Stanford. She's got this open source Almond project. And they're trying to build a system. Her critique of where the industry is, is Siri and Google Voice and what's— Alexa. Alexa are stovepipes and they're about control in a sense. You lock in and she's trying to basically break that. Oh, that's really interesting. But it might be a place to look for— That sounds great. Gender issues as well.
Noelle Stout: Yeah, yeah.
John Markoff: And she's got a good group of graduate students who are doing design.
Noelle Stout: Yeah, that sounds really great.
John Markoff: And she's got industry partners at this point too. Oh, terrific.
Noelle Stout: Yeah, no, I don't think about gender just in terms of women too. I mean, I think what the project will probably evolve into is a more kind of a feminist ethics of AI. So rather than just, you know, how are women represented, to think about what would it mean to have a feminist AI? Like, what is that? What would that project look like? Yeah, yeah.
John Markoff: There are projects moving in that direction.
Noelle Stout: I wish I could remember them, but you probably know them. Meredith Whitaker is working on similar— That's one of the names, right? Yeah, yeah, yeah. So you know those folks. Yeah. No, it's— there's a lot of work to be done. I mean, it's interesting. Anthropologists are really late to the game. There's very little work done. There's a book by Hugh Gusterson and Catherine Besteman called Life by Algorithms that just came out. I have a chapter in it on the algorithmic processes behind foreclosure. So the banks used— this is how I, in some ways, I got interested, because a lot of the people who were making the decisions couldn't explain how the decisions had been made because it was all outsourced to an algorithm, which is not that different than earlier forms of credit lending, but it was unique to them. And so that's part of how I got interested in this. Besides their book, there's not many anthropologists who are working in this area, which seems bizarre because it's such a huge— other fields are really taking it up.
John Markoff: Was there clear gender bias in those algorithms? Maybe obviously, but is there evidence? That's a good question.
Noelle Stout: Within the foreclosure stuff? Yeah. Not so much. I mean, I think the thing with credit lending and the algorithms behind, like, fairness issues there, it's just really— just as we went through from a process of financialization around credit, where suddenly credit lending, all it does is formalizes and seems to make objective and depoliticizes a process of discrimination based on race and class. So suddenly neighborhood becomes a proxy for things like race. And so there's a process of, you know, a kind of a way in which people who are using them can hold up their hands and say, "But we're not— I don't even know who the person is applying. I don't know their race, so therefore it must be fair and equal." But obviously, if you're making the decision based on neighborhood and zip code, then we're in the same position as before. We're at noon.
John Markoff: We should— let's eat lunch. Yeah, yeah.
Narrator: Thank you. Yeah, thank you so much.
John Markoff: Thanks again to our guest Noëlle Stout. As always, to learn more about the topics in this episode, check out the show notes and be sure to take a look at Noëlle's book, Dispossessed: How Predatory Bureaucracy Foreclosed on the American Middle Class. Human Centered is created by the Center for Advanced Study in the Behavioral Sciences at Stanford University, and it is produced by Michael Gattani and Joseph Monzel. I'm John Markoff. Thanks for listening.