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The War on the Post Office

The War on the Post Office

Ellen Brown

The U.S. banking establishment has been at war with the post office since at least 1910, when the Postal Savings Bank Act established a public savings alternative to a private banking system that had crashed the economy in the Bank Panic of 1907. The American Bankers Association was quick to respond, forming a Special Committee on Postal Savings Legislation to block any extension of the new service.

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Privatizing the USPS would be a huge mistake. The “people” have to have a way to send real mail and packages away from the profit vampires of neo-liberal economic privatizing everything to insure profits that aren’t taxed enough already. The more things that are in the hands of profit vampires the more it costs average hard working Americans already strapped to the gills to survive. If Congress can spend over a $trillion a year on the military they can keep the USPS out of the hands of profit vampires. I’ve been hearing about the USPS “problem” my whole life. The “people” have to have a way to send mail and packages away from profiteers. Oh yeah, there are other “choices” to send things if desired so I don’t give me that bulls**t line about “choice”, the neo-liberal standard line of utter nonsense. BTW I am a member of a credit union away from the biggest vampires on the planet, the black banking vampires.

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Will the fees be lower?

And I call “bullshit” on this Republican lie! One of the favorite things in their playbook is to first hamstring an agency and sabotage its ability to perform its mission; then to use the results of their sabotage as an argument for more privatization, which always costs more, for the simple reason that “investors” and private equity firms expect and demand double-digit returns.

Those returns come from net profits, after all operational expenses. Do the math. Don’t fall for their shell game any more!

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When the neocon libertarian privatizers finally drive this country to the precipice of Armageddon ( we’re very close right now at 2 minutes to midnight !), then, hopefully, advocates of the public/planetary interest still left standing will take the reigns. One of the first things we will do is set up a postal banking system to raise up our underprivileged and the just-getting-by, with the Grameen banking model in mind. The ideologues now in power will be exposed for the hypocrites and thieves they are and Congress will pass the NEED Act, HR 2990, creating a sovereign currency and vesting the Treasury with the power to manage it. The Fed and its coterie of private usurers will be tossed out onto the ash heap of history and life on the planet will have a chance to continue and prosper.

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I’m not sure what you envision the problem to be. The cost of the machines is fairly trivial compared to the cost of securing locations for them. The USPS has 31,585 locations and it owns essentially all of them and they have the people to staff them already built in - the extra walk-in business from the banking operation would improve, not reduce, their profitability. Establishing an ATM network and keeping fees low would be easy if congress allows it.

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For some international context

As you can read, the British post office bank before it was privatised was the bank instrumental in creating the free-to-use national ATM system - LINK

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Nothing free about it - it’s just a public option for an unserved part of the population. Check cashing services is a no-brainer considering the rip-off prices that payday lenders charge (remember they are cashing the checks from employers in that case - not a high risk situation). The point isn’t that they will offer everything for free - but they will offer services at a lower cost than commercial banks and payday lenders would because they would have several structural advantages.

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With post offices open 5 or 6 days a week in 30,000 plus locations why would ATMs be needed ?

I have never needed an ATM and function in the mainstream perfectly well.

When I had a consulting gig with USPS 20 years ago I noticed that post offices in areas with a lot of hispanic workers (who sent money to relatives south of the border) sold wads of money orders because they were the most internationally secure and widely accepted (south of the border) financial instrument, bar none.

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You well may be right that Johnny-come-latelys will have lost the initiative. And we know that innovators are often bought out.

But here is a link to LINK

LINK is a not-for-profit membership association owned and governed by card issuers and ATM operators. This allows LINK to keep costs and fees at a minimum, and maintain its position as the scheme of choice for UK ATM transactions.

https://web.archive.org/web/20130625033306/http://www.link.co.uk:80/Pages/Home.aspx

I’m a retired postal worker in the UK and have experienced how privatisation is done by a thousand cuts and in a drip by drip process, producing a case that inevitably results justification for full privatisation. I worked through the early days of automation and computerisation and witnessed the many wasted opportunities. I even saw the valued recognised trade mark Royal Mail changed to Consignia until the mistake was rectified…at a cost, mind you.

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No - I was not. I was referring to “payday lenders” as the name of that industry - not as an identification of a specific service (loaning money in advance of a paycheck). Simply cashing employer checks without getting ripped off is an important issue for the working poor - because it is the payday lending industry that is currently serving that need at exorbitant rates. The issue of whether there would need to be a different charge for cashing checks that are not from employers is another matter, as they do indeed bear increased risk.

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Another reason for the drive to privatize the USPS, not mentioned here as yet, is the hope of snatching all its real estate in prime downtown locations for pennies on the dollar.

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EXACTLY ! Everything is real estate.

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Tom, your post is one of a continual series of reminders that often give me hope. In particular, I always find it hopeful how the extreme income inequality and capitalist excesses of the Guilded Age at the end of the 19th century gave voice to heroes like Eugene V. Debs and Arthur C Townley and to the resulting “moderate socialist reforms” of the Progressive Era that resulted when their advocacy was incorporated into mainstream political thinking. [e.g. Townley’s organizing small farmers against big interests created the NPL that won power in North Dakota and created the state owned bank you refer to as well as state owned grain elevators, mills and even state insurance against hail damage for small farmers.]

Can we make history repeat that pattern? If so, can gains be better consolidated?

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It was one of the parting shots of that Congress, just before the Republicans lost control of it.

Back before they gerrymandered their way back into the driver’s seat just in time to either block
or sabotage anything even a little bit progressive on the part Obama.

Exactly! They would not be paying out a large part of their profits to “investors”. Of course their rates and fees would be much less.

I certainly didn’t mean to imply that either Debs or Townley and their parties (Socialist Party and the NPL) were moderates. I was just saying that their efforts resulted in “moderate socialist reforms” - so we clearly agree on that.

Personally, I think Progressive Democrats today make a big mistake in trying to move their agenda forward when they castigate the radical left. Having a vibrant radical left clearly enhances those that seek such “moderate socialist reforms” as expanding medicare, creating postal banks, or providing public education through the college years. That has been an obvious and continual lesson throughout our history.

Where we disagree is that I have similar feelings about the radical left castigating a progressive Democrat like Bernie Sanders. When progressive democrats see no one to their left supporting them (on issues where they deserve support) their tendency would be to compromise even more than they already do with the right.

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And to crush one more of the last hold-outs of labor unionization in the US.

Well, if we do a cost-benefit analysis on private banking, how large are the social costs? Massive, and they’re growing. Because if we do a cost benefit analysis on the post office providing financial services (at cost), we’d have to take into account the social costs associated with continuing on with private banking, which are massive. At the institutional level as well, it has been proven that there are large inefficiencies associated with large private banks that would simply not be found in public institutions. No massive executive pay, no profits, no lobbying politicians, etc. This is why it is proven that public institutions have less waste than private institutions on a number of services, which tons of studies show. Waste in privatized pension systems (like Chile’s) versus the systems like Social Security, much higher waste in private insurance than single payer systems, Medicare, etc. Less waste and costs in public utilities than private utilities with no negative impact on performance too. Massive amounts of studies showing this. We need public banking, it has proven to work nationally, and it is a means of solving many problems simultaneously. Long past time.

“It’s bad enough they’ve been forced to prepay pension benefits for employees that have yet to be born.”

We could correct this by, you know, changing the law.

Regarding start-up costs; the US government has played a massive role in most every major technology you can think of, either by doing the research or funding it. Most every major technology in cell phones, GPS systems, civilian aircraft, the internet, computers, biotech, nanotechnology, among other things. The government has a proven track record on doing those things, and keep in mind that the government can create money whenever the hell it wants to. Doesn’t have to borrow money that it alone can create. So, if the state wanted to form a public banking network, it could be done easily, and the network could operate at cost, with far less institutional inefficiencies and lower social costs that private banking.

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You said above that there would have to be a cost-benefit analysis of doing this. True, and that is the case with most everything else. Good luck defending the institutional inefficiencies of private banking, the systematic risk of private versus public banking and the massive social costs, in any cost-benefit analysis if you happen to oppose this idea. What are the current private and social costs of doing nothing? Cause it isn’t like this is being discussed because it is a neat idea that some lefty dreamed up. And no one is expecting it to be “free”, nothing is free, including the status quo. Public enterprises have proven to have less waste and often do a better job at delivering services, since there are reasons at the institutional and system-wide level as to why they tend to have less waste/overhead. Of course, public enterprises can be run poorly, but the post office was doing amazingly well until the right wing started to sabotage it. The social costs of private banking are massive and they are growing, and there isn’t tons that could be done without radical changes to make them more efficient and to lessen the risk they pose for the macro-economy. Let’s do the Bank of North Dakota nationally, and let’s do what the Minneapolis Fed has called for, which is to treat all banking as a public utility.