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By Default or Design: The Demise of the Postal Service

Guest Post by Mark Jamison, retired Postmaster Webster, N.C.

This post originally appeared on Save The Post Office Blog. This is Part 2 of three posts and following Invisible Hands: The Businessman’s Campaign to Dismantle the Post Office.

Default.  It’s an ugly and dangerous word.  It gives the impression that the individual or enterprise attached to it has utterly failed.  It implies defeat and irresponsibility.  

The news media use the word with relish.  Like a car crash, a hurricane, or a murder, it sells newspapers.  Combined with the word “bailout,” it’s also a surefire way to advance a particular political agenda.

On August 1, 2012, the United States Postal Service did not make a payment of $5.5 billion to the United States Treasury.  On September 1st the United States Postal Service will fail to make a second payment to the Treasury of $5.6 billion.  The Postal Service, blare the headlines, is thus guilty of an “historic default.”  But it’s all hot air.  The Postal Service is simply not making payments it should never have been required to make in the first place.

Whose fault is the default?

The two payments behind all the headlines were prescribed by the 2006 Postal Accountability and Enhancement Act (PAEA).  The payments were ostensibly designed to pre-fund the health benefits of future retirees from the Postal Service; but, they were actually nothing more than an accounting place holder used by Congress to mask federal budget deficits and to satisfy an arcane accounting system that exists primarily to deceive and dissemble. 

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In 2002, an examination of the postal pension liabilities revealed that the Postal Service was actually overpaying into one of its pension fund by tens of billions of dollars.  But lowering the payments would have added to the federal deficit, so Congress had the Postal Service put the money it was saving from reduced pension payments into an escrow account.

A few years later, when PAEA was being crafted, Congress created a retiree health care fund, and shifted the money from the escrow account to the new fund.  It also mandated that the Postal Service pay off the balance of its retiree health care liability in ten years.  A forty-year payment schedule would have been totally adequate, since the fund was intended to cover retirees for the next seventy-five years, but the payments would have been too small to balance out what the federal government was losing with the reduced pension payments.

The retiree health care fund now has in excess of $44 billion.  As it grows with interest, the fund will have more than enough to cover the costs of retiree health care for decades to come.  The fund, it’s important to note, is not being used for current retirees.  As with most businesses, that expense is paid for out of current revenues, on a pay-as-you-go basis.   The $5 billion payments to the fund were excessive to begin with.  They are now totally unnecessary.

Yet in spite of all this, the word DEFAULT issues from the lips of Congressmen as a foul epithet.  It reverberates through the media as an example of the failure and profligacy of government.  It is worn as a talisman of triumph by those who insist that government cannot, will not, and must not succeed in a utopian world of free unfettered markets.

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The Postal Service has over $320 billion dollars in its pension and health care plans.  These plans are widely recognized to be significantly overfunded.  Claiming that the Postal Service has failed to meet an obligation and has therefore defaulted is a little like saying that a man who fails to add a monthly payment to his multi-million dollar 401K ought to file for bankruptcy. 

Claiming that the Postal Service has defaulted is merely an excuse to further the notion that the Postal Service is an anachronistic dinosaur that ought to be broken up or privatized.  It’s also a means for Congress to avoid and evade its responsibilities to govern effectively.

The reality of the situation is that several groups and forces have combined, through ignorance and cupidity, to dismantle a significant piece of our national infrastructure and to eliminate 500,000 good, solid middle-class jobs. The truth, at this point, is that the fate of the Postal Service is the result of a bad dream, a dream that has us on a runaway train heading for a cliff.  Solving the problem is less a matter of saving the train than simply waking up.

It was a very bad year

I’ve written many times over the past year, on “Save the Post Office”, other websites, and filings with the Postal Regulatory Commission, about the value of the postal infrastructure, the mismanagement of the Postal Service, and steps that could be taken to put things on the right track.

Last August, in post entitled “The Perfect Storm: How everything is coming together to take the Postal Service apart,” I suggested that Patrick Donahoe may go down in history as the last Postmaster General of the United States Postal Service and that he would almost certainly be considered the worst PMG of all time because of his substantial efforts to dismantle and decapitate a cherished national institution.

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In “How to Save the Postal Service Before It’s Too Late,” I offered a series of modest, reasonable, and realistic proposals designed to both calm the growing mentality of crisis surrounding the Postal Service and to begin updating the business model of the Postal Service so it could build on its significant assets and retain its relevance into the 21st Century.

Over the past twelve months, the situation has only gotten worse.  It’s been an endless stream of overwrought claims of impending disaster.  The fire has been stoked by the media, which look for conflict and controversy rather than reason and fact.  The crisis mentality has been furthered by a Congress that seems of incapable of discerning the public interest, let along legislating and governing in a responsible manner.  The situation has been exploited by ideologues, who have used it to advance their agenda of privatization, and by many stakeholders in the mailing industry, who have licked their lips over the prospect of a postal system operated for their benefit alone.

There is a great deal of blame to go around — virtually everyone involved in this theater of the absurd has failed in some manner — yet the simple fact of the matter is that we stand today in a situation that can be easily and reasonably resolved to the benefit of the American people.  A great and useful institution has been damaged and demeaned.  Tens of thousands of jobs have been lost, while ill-considered and even idiotic plans have been advanced.  But the damage is all self-inflicted.  Despite the weighted words of “default” and “bailout,” the postal crisis — at least the one grabbing all the headlines — is essentially fictitious and fraudulent.

An infrastructure that builds infrastructure

The Postal Service has been and continues to be an essential infrastructure.  It furthers our democratic ideals and our commercial opportunities.  The postal network — the thousands of facilities and plants, the millions of miles of routes, the machinery and data processing capacity that supports everything, and the human capital that drive the network — the mailhandlers, clerks, carriers, and postmasters — is a useful and important piece of our national infrastructure.

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Yes, electronic communication, the Internet, cell phones, and all the other modern means of moving information have challenged the postal system.  But the postal network has adapted to technological change before and remained not only relevant but an important driver in the utility and productivity of new technologies.

Those who think that the postal network is no longer valuable should read the recent report from the USPS OIG, Postal Service Contributions to National Infrastructure.  As the report makes clear, the postal infrastructure has enabled the country to grow, businesses to prosper, and new technologies to evolve.  Even in today’s advanced electronic environment, there is still considerable value and benefit in being able to deliver to every house and business, six days a week. There is still considerable value in having a positive and useful government presence in small towns and communities in every corner of the nation.  There is still considerable value in having a means to distribute the printed word across a neutral and trusted network, as well as a system for handling voting by mail.

In addition to the value of the infrastructure and the ongoing opportunity it offers for business and commercial development, one cannot easily discount the social value of the network.  The Postal Service has offered meaningful and worthwhile employment to millions of Americans, and it has lifted many families into the middle class.  We hear all about how postal workers are paid too much and receive benefits that are too generous, and how this is an unfair burden to taxpayers.  But postal workers do not receive a dime of taxpayer money.  Their salaries and benefits have been fully paid for by reasonable and sustainable postal rates that are among the cheapest in the world.

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The postal network has bound the nation together by making the commerce and goods produced in one part of the country available throughout the country.  Thanks to the postal system, a person in a remote region of rural America can shop for the same products as a person in a busy metropolitan area.  Certainly television and the Internet now offer windows into other worlds, bringing the world to our living rooms and now even our phones, but as broadening as those connections are, they lack the unique capacities offered by the physical connections embodied in the postal network.

We have built a tremendous asset in the postal network, yet most of our leaders — our elected representatives in Congress and the executive officers of the Postal Service — seem willing to simply disassemble that asset and consign it to irrelevance or worse.  This cavalier treatment of an asset owned by the American people borders on the criminal.  What is worse, the reasons they offer for what they’re doing are as thin as the paper we claim to no longer need.

The postal network offers unlimited potential.  It could be used to assist local and state governments in their missions.  It could be used to assist federal agencies, the way it helps with the census and elections. The use of the postal network could save millions if not billions of dollars in taxpayer money if we allowed it to be used effectively and efficiently by other governmental bodies.  The network also offers huge potential in data and resource collections through mobile sensors on postal vehicles.  Its vehicle fleet could be used as a proving ground for new technologies.  Its facilities could be early locations for charging stations.

The only thing that stands in the way of a more productive use of this national asset is our lack of imagination, our parochialism, and our ideological inflexibility.  The promise of binding the nation together is an open and ongoing one, providing we are prepared to acknowledge the potential of the postal network.

Instead, that potential is being lost.  Instead of dedicating ourselves to finding value in our national infrastructure, we have donned blinders of self-absorption that limit our vision to only those things that offer immediate return.  The financial crisis was driven by this narrowed vision of immediate gain, and our failure to find a robust recovery is rooted in the same blindness.

Taking the service out of the Postal Service

Once the Kappel Commission of 1968 laid the foundation for the new Postal Service, the agency’s leadership has been fixated on the idea that it must become something other than what the Founding Fathers created it to be.  Rather than performing the essential and necessary work of binding the nation together, the leadership of the Postal Service has been seduced by the idea of privatization. They may not always call it that, but the fact is that when your goal is to jettison every characteristic that makes the postal system a service infrastructure in favor being “more businesslike,” then ultimately the goal is privatization.

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Patrick Donahoe and the current Board of Governors represent the culmination of forty years of dishonest thinking.  Their plans spell the destruction of a public postal network.  They would turn the country’s postal system into a private logistics company. The healthcare prepayments mandated under PAEA and much else that Congress has done are part of what’s behind the current crisis, but Mr. Donahoe and the BOG are also part of the problem.  Their actions have served to undermine the stability of a national institution, and thanks to them, there are 400,000 fewer good paying jobs than there were five years ago.  They say the cuts have been made necessary by declining mail volumes, but Mr. Donahoe and the BOG seem congenitally unable to tell the truth about the state of postal affairs.

One need only look at the Postal Service’s offerings in the Nature of Service Cases before the Postal Regulatory Commission.  In the five-day case, the Postal Service sought to cut 17% of service for about a 3% savings.  In the network rationalization case, they withheld research that showed huge revenue losses as a result of the proposed changes in service standards.  In PostPlan, they propose to reduce service to 13,000 communities for virtually no cost savings. Worse, the plan is little more than a political sop to disguise office closings.

The sum total of their plans has been nothing short of massive reductions in service with the goal of abdicating their responsibilities to provide universal service.  The plans are poorly conceived and poorly presented.  More often than not, they have been revised on the fly, as expedience and publicity requires.  That’s because the plans lack any fundamental basis in preserving our postal system.

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The BOG and Mr. Donahoe have not acted as managers entrusted with a national asset. They have acted more like vulture capitalists stripping the organization of its assets so that what’s left can be sold to the highest bidder.

If the Postal Service stands in dire straits today, it’s because those charged with running the service have done everything in their power to gin up a crisis.  Each month, Mr. Donahoe and his senior managers offer up another prediction of doom.  We’re told there’s a cash flow crisis, but somehow there are billions of dollars available to spend on unproven and still unproductive systems like the FSS machines.  We’re told that volumes are falling precipitously due to the Internet, but instead of showing all the ways it’s adapting to the new environment, the leaders of the Postal Service make ever more hyperbolic predictions of doom.  What prudent business that uses the Postal Service wouldn’t be making alternative plans right now?

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The management culture of the Postal Service is rotten and bankrupt.  For years we have heard reports of managerial bullying.  Just the other day, an arbitrator took the unprecedented step of requiring a District Manager to apologize for the ongoing atmosphere of bullying in offices in the Los Angeles area.  Many have heard the story of Jerry Lane, the former Cap-Metro Area Vice-President who left the Postal Service after assaulting an employee.  How does someone like that reach such a senior position anyway? The behavior that resulted in his “separation” was neither unique to him or others in the organization.

Whether it’s fudging numbers to make a plan more palatable or looking the other way at abusive managers, the senior management of the Postal Service has lost the capacity to be self-critical.  The problems of the Postal Service can be attributed, at least in part, to a management culture and a senior management that have become hopelessly dysfunctional.  No solution to the postal crisis that does not include a restructuring of the senior management and a thorough housecleaning at L’Enfant Plaza will be effective.

Where’s a Congress when you need one?

While senior postal management bears the lion’s share of the blame for our current circumstances, Congress owns the problem.  As the day of the faux default approached, we saw senators screaming that their colleagues in the House were letting the American public down by not acting on a bill to resolve the situation.  But in doing so, they unnecessarily amped up the already overheated rhetoric with misleading talk of “$25 million a day” losses and the impending default.

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The leadership in the House has run from its responsibilities.  Darryl Issa, chairman of the committee with oversight responsibility for the Postal Service, has offered prescriptions that would immediately destroy the Postal Service.  At least Mr. Issa is ideologically consistent.  He stands for a view of America and the American economy that leaves most of our citizens behind and actively denigrates government.  His offerings on postal matters reflect that.  It’s no wonder that his colleagues do not support his bill. It’s easy to argue that Mr. Issa may be the biggest beneficiary of the current situation. When words like “default” and “bailout” start getting thrown around, his radical solutions don’t seem so radical.

The problem is that if the House were to act tomorrow on the bill already passed by the Senate, we would simply be taking bad legislation and making it worse.  Tom Carper, the Democrat from Delaware, plays the point man in postal legislation.  His prescriptions are, for the most part, endorsements of the course Mr. Donahoe and the BOG have set.  They dismantle the institution and the postal network and harm hundreds of thousands of postal employees and thousands of American communities.  Mr. Carper’s proposals seem designed to satisfy the direct mailers, which is no surprise since they are major contributors to Mr. Carper’s campaigns.

Whatever his motivations or reasons, Mr. Carper has increasingly portrayed himself as the savior of the Postal Service.  It is a role similar to the one Mrs. Collins of Maine played during the debate on PAEA, and the results are likely to be the same.

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Many news outlets have opined that Congress ought to get out of the way and let postal management and the BOG run the Postal Service, the more businesslike the better.  Others have simply said the Postal Service is irrelevant and should be privatized.  My response to both of those views is that no government is not good government and it certainly isn’t better government.

While Congress has clearly failed to function as a thoughtful body in governing the Postal Service, that’s not reason for removing the postal system from Congressional control.  We, as citizens, ought to demand that Congress fulfill its role in overseeing the Postal Service in a professional and effective manner.  Those who think no government is a good idea or that the Founders had no faith in government are delusional.  Without a strong government based on democratic principles, the end result will be either anarchy or plutocracy.

The default of leadership

The issue is not large or small government.  The fact is that many of those who argue for small government actually support the expansion of government, so long as that government favors their interests.  The largest expansion of government in our history has occurred under two Republican presidents.  

The issue ought to be effective government.  Clearly those who designed our political system understood the need for infrastructure.  They understood the need for and value of postal services.

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One of the greatest challenges our country faces today is rebuilding our infrastructure. We have done best economically when we focused on investing in foundational infrastructure.  Good infrastructure expands economic opportunity and allows more people to participate more fully in the economy.  Growth built on broad economic participation is growth that is both sustainable and growth that is broadly beneficial.  The postal network has played a major role in providing that kind of growth, and it can continue to do that.

The Postal Service does not have a fiscal crisis.  There are billions of excess contributions in retirement accounts.  Those accounts, including the ones designed to fund retiree benefits, are well funded. The crisis facing the Postal Service is one of management and governance.

The management of the Postal Service has no credibility. It has offered plans that do not protect or utilize a great American asset.  Instead, their plans transfer the assets and revenues of the Postal Service into the hands of a small segment of the mailing industry and serve to dismantle the postal network, a useful and essential infrastructure.

The Congress of the United States has abdicated its responsibility with respect to postal matters. It is not simply about the failure of the House of Representatives to act on a bill.  It goes much deeper than that.  When the legislature of the United States is no longer able to see the value in an infrastructure that sustains not only our commerce but our democratic values, when they are willing to sacrifice services that thousands of American communities rely on, when they are willing to undermine the useful, effective, and economically efficient employment of nearly half a million Americans, when our legislators are willing to do these things casually and cavalierly, then they have failed the country, miserably.

There is no Postal Service default. The Postmaster General and the Congress of the United States have defaulted on their responsibilities to the American public.  Shame.

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About that “State and local governments are closer to the people” thing …

Indeed, they are; state and local governments are closer to the people.  It’s just that the people they’re closer to probably aren’t, well … you. So, here’s a question: Why isn’t, say, Kay Hagan, who’s running against the Speaker of the State House*, or Charlie Crist, who’s running against Florida governor Rick Scott, um, mentioning this in their campaigns?

Beats me, although it may actually be that they don’t know about this, since apparently the news media in these states and the other six that have enacted similar laws hasn’t bothered to report it. It’s part of what I now think of as vacuum-packed politics, in which only the Republicans ever say anything, and in which for nearly six years now we’ve had a Democratic president who doesn’t trouble himself to respond to falsehoods about policy, or ever actually educate the public about, like, anything. Normally, I would expect the president to, for example, inform the public that, as the New York Times puts it in an editorial today, complaining about the self-defeating cowardice of most of the Democratic Senate candidates in “red” or “purple” states, that the reason he has not imposed a ban on travel to this country from “African countries with Ebola cases [is that] most public­health experts say such a ban would be ineffective and could make the situation worse.  But I don’t expect that, because this president just plain doesn’t do explanation to the public.  It’s pretty difficult for a senator or Senate candidate to educate the public about something of this sort, but it would be very easy for the president to do that.

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NOTE TO COLORADANS: You can get virtually identical insurance on your state’s Exchange—and continue to receive the same subsidies to pay the premiums that you received THIS year. Really.

More than 22,000 Coloradans were informed in the past month that their health coverage will be canceled at the end of the year, state insurance authorities disclosed this week, a spike in cancellations already roiling the state’s fierce campaigns for the Senate and governor’s seat.

Republican Rep. Cory Gardner, who’s running to unseat Democratic Sen. Mark Udall, pounced on the news as evidence that Obamacare is disrupting coverage for Coloradans and that Udall, who voted for the law, shares in the blame.

It’s unclear, though, if Obamacare is the reason for the latest wave of canceled plans. The cancellations are nearly all the result of a decision by Humana, a major national insurance company, to cancel offerings for people who buy health insurance on their own. About 3,800 were the result of financial instability at a smaller insurer, SeeChange, which offered plans to small businesses.

The sudden surge, however, comes at an inopportune time for Democratic Gov. John Hickenlooper and Democratic Sen. Mark Udall, both of whom are fighting for their political lives and have been staunch defenders of the health law. Hickenlooper was one of just more than a dozen governors to build a state-run Obamacare exchange last year.

It’s unclear why Humana canceled policies that covered nearly 18,000 people, but the company is participating in Colorado’s exchange this year, offering plans to consumers who live in Colorado Springs and Denver. Although many insurers have canceled plans that fail to meet the minimum standards of Obamacare, Colorado insurance officials noted that Humana had the opportunity to continue its offerings through 2015. Plans may be canceled for many reasons besides failure to comply with Obamacare, too, they noted.

Health cancellations ripple in Colorado, Kyle Cheney, Politico, today

Hmm.  I no longer expect any Democratic candidate for anything–okay, I can think of three, but only three, exceptions: Gary Peters and Mark Schauer in Michigan, and Kay Hagan in North Carolina–to actually respond clearly and directly on-point to this kind of stuff.  But Udall and Hickenlooper could, theoretically, surprise me by pointing out, first, that almost certainly a high percentage of beneficiaries have been able to afford that policy because of the federal subsidies courtesy of the ACA, and, second, that every single one of these folks will be able to get a similar policy, through the Exchange–and receive the same financial assistance via the ACA that they received this year.

Udall and Hickenlooper won’t, of course, point out these things.  Nor, I guess, will the political-news media, which also could, theoretically.  But I thought I’d mention these theoretical possibilities, anyway.

Aaaaargh.

UPDATE: I just thought of a fourth one: Bruce Braley of Iowa.

SECOND UPDATE: And Rick Weiland of South Dakota!  He’s running aggressively as a liberal.

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How Does the World’s Leading Economy and the Rest of the World Prepare for Disease Outbreaks, Epidemics, and Pandemics?

The CDC

invisible hand “As demonstrated in the PHEP funding chart above, CDC continues to work with reduced financial resources, which similarly affects state, local, and insular area public health departments. These and other funding decreases have resulted in more than 45,700 job losses at state and local health departments since 2008. These losses make it difficult for state and local health departments to continue to expand their preparedness capabilities, instead forcing them to focus on maintaining their current capabilities.”

The NIH

invisible hand “NIH has been working on Ebola vaccines since 2001. It’s not like we suddenly woke up and thought, ‘Oh my gosh, we should have something ready here,'” Collins told The Huffington Post on Friday. “Frankly, if we had not gone through our 10-year slide in research support, we probably would have had a vaccine in time for this that would’ve gone through clinical trials and would have been ready.”

It’s not just the production of a vaccine that has been hampered by money shortfalls. Collins also said that some therapeutics to fight Ebola “were on a slower track than would’ve been ideal, or that would have happened if we had been on a stable research support trajectory.”

The PPACA

invisible hand “The health law initially funded the Prevention Fund at $2 billion annually, with slightly smaller appropriations in the first few years as the program scaled up. This would be the only federal budget item dedicated to prevention and public health activities. The deficit reduction package that passed in February 2012 cut $6.5 billion from the Prevention and Public Health Fund, leaving it with the budget you see in green. The cut eliminated just over a third — 37 percent — of the Prevention Fund’s budget. Congress used these funds as part of a “doc-fix” package to keep Medicare provider payments stable.

Congressional gridlock has stopped Republican plans to eliminate the fund altogether from becoming law. But that doesn’t mean it’s safe: The Obama administration plans to use $454 million in Prevention Fund dollars to help pay for the federal health insurance exchange. That’s 45 percent of the $1 billion in Prevention Fund spending available this year — and what’s represented in the graph above, in yellow.”

The WHO

Peter Piot, the discoverer of Ebola responded: “On the one hand, it was because their African regional office isn’t staffed with the most capable people but with political appointees. And the headquarters in Geneva suffered large budget cuts that had been agreed to by member states. The department for hemorrhagic fever and the one responsible for the management of epidemic emergencies were hit hard…I think it is what people call a perfect storm: when every individual circumstance is a bit worse than normal and they then combine to create a disaster. And with this epidemic there were many factors that were disadvantageous from the very beginning.”

How did austerity, starving the beast, and politics get us ready for world disasters? It didn’t and I believe it is pretty plain to see we were unprepared to meet Ebola head-on due a lack of foresight, planning, and funds.

Notes and References:

Republican budget cutting nearly halved CDC’s emergency preparedness since 2006 Huffington Post, October 13, 2014

CDC Preparedness Report – Background “2013-2014 National Snapshot of Public Health Preparedness,” USHH CDC

Ebola in the U.S.—Politics and Public Health Don’t Mix Scientific American October 6, 2014

The Incredible Shrinking Prevention Fund Washington Post, Health Reform Watch blog, April 13, 2013

Ebola and WHO Budgets Controversies in Hospital Infection Prevention blog, October 5, 2014

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Invisible Hands: The Businessmen’s Campaign to Dismantle the Post Office

Guest Post by Steve Hutkins a literature professor who teaches “place studies” at the Gallatin School of New York University.

This is Part 1 in a series of 3 articles as written by Steve Hutkins in 2012. These articles originally appeared on the “Save The Post Office Blog”. Steve lives in a small town in New York’s Hudson Valley. He has no affiliation with the U.S. Postal Service—he doesn’t work for it, nor does anyone in his family. Like millions of Americans, he just likes his local post office, and he doesn’t want to see post offices being closed.

invisible hand The leaders of the Postal Service have made no secret of their plans for reforming the postal system. They have issued white papers, given speeches, presented “optimization” programs, and appeared before Congressional committees. The plans are clear: eliminate the layoff protections in union contracts; cut the career workforce by nearly half while tripling the number of non-career workers; reduce service standards for first-class mail; do away with Saturday delivery; give management control of workers’ benefit plans; consolidate over 250 processing plants; and close 15,000 post offices.

What we don’t see very often are the players making this all happen. We assume the Postmaster General is making the decisions, but he is merely the front man. Behind him are the USPS Board of Governors, the mail industry stakeholders, and the corporate class as a whole. These businessmen (and women) prefer to keep a low profile, so we rarely hear from them in public. They leave it their surrogates — journalists and academics, politicians and pundits — to speak for them. But it’s the businessmen who fund the think tanks, endow universities, make campaign contributions, pay lobbyists, and run the news media. Yet for the most part, they are not to be seen.

In her excellent book Invisible Hands: The Businessmen’s Crusade Against the New Deal, historian Kim Phillips-Fein paints a very revealing picture of how the corporate class operates. Her theme is the way conservative businessmen worked behind the scenes to undo the New Deal. Believing all would be right if government stayed out of the economy and left everything, in Adam’s Smith famous expression, to the “invisible hand” of the market, these businessmen have spent decades working to weaken unions, eliminate social welfare programs, minimize government regulation of their companies, and diminish public services.

attack While the U.S. Postal Service is obviously not a product of the New Deal, that same conservative agenda is behind the attack on the Postal Service we’re witnessing today. Cutting the workforce, closing post offices and plants, and moving toward privatization through outsourcing and divestiture of assets — these are all part of an effort to shape the postal system in ways that serve the interests of an elite business class rather than the good of the country as a whole. The free-market ideology and greed for profits that drove efforts to undo the New Deal are basically what’s driving the “postal reform” movement today.

Power in numbers: The stakeholder associations

As Phillips-Fein explains, one of the most common methods for the businessmen to advocate for their agenda was to bond together. Recognizing the power in numbers, they formed associations like the American Liberty League (organized by the du Ponts) and the Foundation for Economic Education (founded with help from B. F. Goodrich), as well as giving new energy to existing organizations, like the National Association of Manufacturers and other industry trade groups.

In the same way, the mail industry stakeholders — the big direct marketing firms, the pre-sort companies, the periodical publishers, and so on — have formed their own organizations to advocate for their interests.

One of the most important of these groups is one operated by the Postal Service itself. The Postmaster General’s Mailers’ Technical Advisory Committee (MTAC) consists of mailer associations and other organizations related to the mailing industry. Its goal is “to assist the USPS in determining the best course of action to improve service and postal operating efficiency.” The MTAC has a page on the USPS website (it’s part of the National Customer Support Center), and its meeting minutes are published there, albeit in a rather cursory form. But much about the MTAC is cloaked in secrecy.

The MTAC charter says, “A current list of member associations/organizations and corresponding representatives will be published at least quarterly.” Apparently there are 58 member organizations, but good luck trying to find a list of the MTAC members on the Internet. A few years ago, when the APWU asked to join the MTAC, it was denied membership and it took a lawsuit and a year and a half before the MTAC finally relented. A few months ago, word came out that attendance at its meetings would be restricted.

The Direct Marketing Association (DMA) is, according to its website, “the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques.” It’s an international organization representing dozens of industries in almost 50 countries, including nearly half of the Fortune 100 companies. If you want to know who’s in the DMA you will find that the membership directory is off limits — you have to be a member to see the member list.

Floor The National Association of Presort Mailers (NAPM) is, according to its website, “a trade association composed of firms concerned with the present and future of postal work sharing.” Its primary purpose is to represent the interest of presort mailers and to develop work share programs with USPS “to produce cost saving and service benefits to presort mailers and the USPS.” As with the DMA, if you’d like to see the membership list, you’ll need to become a member.

There are many other industry associations that are influencing the policies of the Postal Service, such as the National Alliance of Standard Mailers (NASM); DFW Mailers Association; Alliance of Non-profit mailers; Association of Priority Mail Users (APMU); Mail Systems Management Association (MSMA); Mail Order Association of America (MOAA); Parcel Shippers Association (PSA); National Newspaper Association (NNA); and Magazine Publishers of America (MPA).

The corporate stakeholders represented by these organizations are not monolithic in their views, and there’s a considerable degree of diversity and even conflict. The periodicals industry, for example, is usually more concerned about the timely delivery of their publications than the direct marketers are. And one wouldn’t want to lump the junk mail business together with newspapers and news magazines — delivering the news is one of the most important functions of the mail system.

But most big mailers are primarily interested in keeping postal rates as low as possible. They have generally supported the cost-cutting measures proposed by the Postal Service because they believe the cuts will keep rates down and their profits up. Back in August, for example, the DMA “applauded” the proposed cuts, and in the RAOI Advisory Opinion process, the direct marketing giant Val-Pak made a forceful argument for closing post offices because they lose money and consequently drive up postage rates.

Most of these stakeholders don’t care about post offices because big mailers present their mail at Bulk Mail Entry Units, and Saturday delivery is not a major concern either because ad mail would do fine with even three-day delivery (which the Postmaster General says is coming within fifteen years). The industry doesn’t care about having a blue collection box on every corner — over the past twenty years, half of them have disappeared, even as the FedEx boxes have become ubiquitous — and they don’t care how often the mail is picked up at those boxes. Their interests, in other words, are not those of the average citizen and small business. But they are one of the strongest forces shaping the future of the Postal Service.

Think tanks do the talking

One of the main themes of Phillips-Fein’s Invisible Hands is that the anti-New-Deal businessmen wanted to keep their activities hidden from the general public. Otherwise, it might look like their attack on unions and public services had selfish motives. They also wanted to give their views intellectual respectability. So they founded and funded think tanks and enlisted journalists and academics to write articles and produce studies extolling the virtues of the free market.

In 1943, Lewis H. Brown, president of the Johns-Manville manufacturing company, got several of his allies in the business community together and formed the American Enterprise Association to provide congressmen with legislative analyses that would promote private enterprise. Most of the money came from major corporations like GM, Ford, Con Edison, and du Pont, and the AEA ended up being investigated by Congress, which questioned how it could provide disinterested research with such sponsors.

The AEA eventually morphed into the American Enterprise Institute (AEI), one of the country’s leading right-wing think tanks. The AEI now publishes works like Saving the Mail: How to Solve the Problems of the U.S. Postal Service by R. Richard Geddes. Geddes advocates privatizing the Postal Service, and he shows up frequently in news articles about the plight of the Postal Service. The AEI is responsible for many other publications about the desirability of moving the Postal Service toward a more corporate model, such as this one by AEI senior fellow Kevin Hassett, encouraging the Tea Party to push for postal privatization as a means of fighting big government.

Another of the country’s well-known right-wing think tanks is the Heritage Foundation, founded in 1973 by conservative businessman Joseph Coors of brewery fame, with the help of contributions from Dow Chemical, GM, Mobile, Pfizer, Sears Roebuck, and Chase Manhattan bank. More recently, the Heritage Foundation has received generous support from the Lynde and Harry Bradley Foundation and the billionaires Koch brothers. (Harry Bradley and the Koch brothers’ father were charter members of the John Birch Society.) The Foundation has a long history of advocating privatization of government agencies, including the Postal Service. Check out its 1986 primer on privatizing federal services, and this long list of articles on its website.

Koch The Cato Institute, the nation’s first libertarian think tank, was launched by the Koch brothers, who continue to fund it generously. According to the Center for Public Integrity, between 1986 and 1993 the Koch family gave $11 million to the institute. The Cato Institute holds conferences and publishes books and papers advocating the privatization of the Postal Service, such as Restructuring the U.S. Postal Service, The Last Monopoly: Privatizing the Postal Service for the Information Age, Free the Mail: Ending the Postal Monopoly, and Mail at the Millennium: Will the Postal Service Go Private?

The Koch brothers also founded Citizens for a Sound Economy, and one of its senior fellows was James C. Miller III, a well-known advocate of privatizing the Postal Service. Miller is a member of the Board of Governors of the United States Postal Service.

Citizens for a Sound Economy eventually split into FreedomWorks and Americans for Prosperity. According to the New York Times, FreedomWorks is “the Washington advocacy group that has done more than any other organization to build the Tea Party movement.” It received $12 million from Koch family foundations. Like the other Koch-funded organizations, it advocates privatization of the Postal Service.

How to break a union

In one of Invisible Hands’ most disturbing chapters, “How to Break a Union,” Phillips-Fein examines the war against unions in the 1950s, particularly the efforts of General Electric to destroy the electrical workers union. (In 1954, GM enlisted the help of a failed movie actor named Ronald Reagan to promote its agenda.) From the point of view of the conservative businessmen, organized labor posed a serious threat, not just in terms of how higher wages might impact their bottom line, but also in terms of power and prestige. They also worried that at election time union workers would be mobilized to press for better Social Security benefits, more government spending, and expanded public services. Unions embodied everything the conservative businessmen were against.

The animosity toward unions fuels much of what’s going on with the Postal Service today. The leadership of the Postal Service wants to get rid of the no-layoff clause in union contracts so that it can cut hundreds of thousands of jobs. In a USPS white paper released last summer, the Postal Service stated explicitly that it wanted to reduce the career workforce from 580,000 to 300,000, and since there was no way that could happen through “attrition,” postal management wants Congress to change the law preventing layoffs. The Postal Service also wants to increase the number of non-career employees from 38,000 to 125,000 — yet another way to undermine the unions.

The leaders of the Postal Service aren’t trying to reduce their labor costs just to deal with the postal deficit or to keep the big mailers happy. The corporate class as a whole does not like the good wages that unions make happen. Postal clerks average $25 an hour, while the sales associates and cashiers at Walmart average $8.50 an hour. Good wages at the post office help bring wages up across the economy, while poor wages at Walmart drive them down.

Since union contracts have made it difficult for the leaders of the Postal Service to reduce the size of the workforce as drastically and rapidly as it would like, they have used other tactics. Outsourcing, for example, is a great way to shift work from postal employees to non-union workers in private industry. The Postal Service now contracts out $12 billion annually.

Koch At the top of the list of corporations enjoying a profitable relationship with the Postal Service — with $1.37 billion of business in 2010 — is FedEx, whose founder and CEO, Fred Smith, testified before Congress “closing down the USPS . . . is an option that ought to be considered seriously.” FedEx has also campaigned against legislation making it easier for its workers to unionize.

Work-share arrangements with pre-sort companies are another way to give work to private companies that could be done by postal workers. The huge discounts that these companies are given are often far in excess of what the Postal Service saves by receiving mail pre-sorted, and they end up costing the Postal Service huge amounts of money. The postal unions have been fighting these discounts for a long time, but to little avail. They are a valuable tool for downsizing the Postal Service, and they help move things further down the path to privatization. (For more on presort companies, see the excellent thesis Understanding Postal Privatization by labor historian Sarah Ryan.)

Follow the money

One of the main tactics the anti-New Deal businessmen used to help keep themselves invisible was to support pro-business politicians like Barry Goldwater and Ronald Reagan. These days, with PACs and other modes of funding and lobbying politicians totally out of control, there are very few politicians who are not being overly influenced by the corporate elite. In postal matters, the two most prominent of these politicians are Darrell Issa and Dennis Ross.

Issa is the Congressman for California’s 49th congressional district and chairman of the House Committee on Oversight and Government Reform. In 2011, his committee held hearings (videos here) and called as witnesses various individuals to testify that the Postal Service was heading toward catastrophe if radical reforms weren’t made. Issa’s Postal Reform Act would create an Authority empowered to restructure the postal system and a Commission that would recommend post office closures and consolidations to Congress. These measures would do essentially what the leaders of the Postal Service have been advocating, but the Act would put Issa and his allies in charge, effectively sidelining postal headquarters.

Koch Dennis A. Ross is the Congressman for Florida’s 12th congressional district and a member of the Tea Party Caucus. As chair of the Committee on Oversight & Government Reform, he held several hearings last year on the Postal Service, during which his witnesses attacked the postal unions, argued that the Postal Service needs to reduce “excess capacity” (i.e., post offices and plants), and called for changes in the law that will make it easier to close post offices.

Eleven of the 23 Republican representatives on Issa’s committee received financial help from Koch Industries in the last election. Issa himself was the largest recipient, with $12,500 since 2008. Not that Issa really needs the money. His net worth is about $450 million, making him the richest man in Congress. Ross received $12,000 from the Koch brothers.

It’s not just the Koch brothers who are contributing to the postal legislators. Pitney Bowes is $5.6 billion-a-year business employing 33,000 workers around the world, selling mail equipment and providing marketing through mail. It’s based in Stamford, Connecticut, so no surprise that it has contributed generously to the campaign of Connecticut Senator Joe Lieberman, chair of the Homeland Security Committee, which deals with postal legislation. In 2011, Pitney Bowes also contributed $10,000 to Darrell Issa and $10,000 to Senator Susan Collins of Maine, another key player in postal legislation. (If you’re interested in doing some detective work, Influence Explorer and Open Secrets are useful sites.)

Privatization, the Holy Grail

Phillips-Fein’s book culminates with the election of Ronald Reagan, who represented everything the conservative businessmen had worked for since the New Deal. Reagan made a stand against unions when he fired the striking air-traffic controllers, he made the tax code less progressive (remember Reaganomics?), he cut social programs like Medicaid and food stamps, and he slashed the budget of regulatory agencies like the Environmental Protection Agency.

Reagan also created a presidential Commission on Privatization. Its 1988 report Privatization: Toward More Effective Government recommended that the private express statutes, which mandate the postal monopoly, be repealed to allow competition in the provision postal services. That recommendation has not yet come to fruition, but the Commission also recommended that the Postal Service more actively pursue contracting out. Fulfilling that recommendation was facilitated by changes to the USPS Procurement Manual (also in 1988), which made it easier for management to outsource without worrying about “full and open competition.” Outsourcing has become one of the most useful tools for privatizing the postal system without an act of Congress.

Koch Reagan, however, can’t get the credit for initiating the push toward postal privatization. That goes way back, at least until the 1960s, when a Democratic president, LBJ, charged the Kappel Commission to come up with ideas for reforming the Department of the Post Office. The Commission consisted almost exclusively of corporate executives, with retired AT&T Chairman Frederick R. Kappel as its chair. Its recommendations led to the 1970 Postal Reorganization Act, which “corporatized” the Post Office into the U.S. Postal Service.

It was no secret that turning a cabinet-level department into a government corporation would be a big first step toward the ultimate goal, privatization. In testimony before Congress, Kappel testified, “If I could, I’d make [the Post Office] a private enterprise and I would create a private corporation to run the postal service and the country would be better off financially. But I can’t get from here to there.”

For the past four decades, getting from “here” to “there” has remained the Holy Grail for the conservative business elite. All the books and articles put out by the think tanks and their scholars, all the lobbying and campaign contributions, all the organizing and behind-the-scenes networking— the goal has remained constant. The free market ideologues will be satisfied with nothing less than the privatization of the postal system.

In the meantime, the mantra is the same: The Postal Service needs to act more “like a business.” If it can’t be turned into a private corporation, it should at least act like one. If a post office isn’t bringing in a profit (80 to 90 percent of them don’t, at least the way the Postal Service runs the numbers), then close it. If career employees can be replaced by part-time casuals or contract workers, replace them. If there’s “excess capacity” in the system, get rid of it. If there’s a way to undermine the unions, drive down wages, degrade benefits, do it.

As for average citizens, they just don’t seem to be very important to postal management. They are not big customers. The services they might like to see offered at the post office — like an Internet connection or low-cost banking services — aren’t very profitable. Sometimes one even gets the impression that the Postal Service is intentionally alienating its regular customers — causing long lines by reducing the staffing at the windows, not being responsive to complaints, demoralizing postal workers so it’s difficult for them to be courteous. Perhaps management thinks it’s not so bad if people are dissatisfied with the Postal Service. Maybe it will make them happy to hear about plans to privatize.

Dismantling the legacy

In 1970, when the U.S. population was about 200 million and first-class mail volumes were not quite 50 billions pieces, there were around 43,000 post offices (including contract postal units). Today the U.S. has over 300 million people, first-class mail volumes are about 78 billion pieces, and there are around 35,000 post offices. While population and mail volumes have increased by more than 50%, the number of post offices has declined by almost 20%. Yet somehow we are expected to believe that there are too many post offices.

Almost every one of the country’s post offices is a valued part of the community it serves. If you have any doubt about that, just read a few hundred of the thousands of news articles that have come out over the past few months, describing the frustration, anger, and sadness people express when they hear their post office may close.

While the focus has been on the 3,600 post offices on the Retail Access Optimization Initiative (RAOI) list, the Postal Service wants to close half the country’s post offices. The retail end of the business will continue to be moved to the “alternate retail outlets” the Postal Service claims that customers prefer — Wal-Mart, CVS, Office Depot, Costco, your local supermarket. There are already 50,000 alternative places to buy stamps — more locations than there are post offices. Though the Postal Service never labels it as such, this is yet another form of outsourcing and privatization.

The leaders of the Postal Service are committed to dismantling what they call — with considerable disdain — the “legacy” of “brick-and-mortar” post offices. The legacy hangs around their neck like an albatross, weighing them down and holding them back from progressing into a light and fluid post-office-less future. They say “brick and mortar” to make the post office seem old fashioned, passé, a nostalgic icon of a bygone era.

These leaders want the Postal Service be fashionably chic — like those European countries that are closing their village post offices as part of their privatization programs. Headquarters doesn’t like the way people get attached to their post office, or the way the workers in the post office give a face to the postal system and the government. The bonding to a place and the human connection make people care too much about what happens with the postal system as a whole, and that just gets in the way of what postal leaders are trying to do.

During the Great Depression, the federal government built over a thousand post offices, as well as many schools, libraries, and federal buildings. These buildings are usually an important place in a town, and many are on the National Register of Historic Places. Constructing these buildings put hundreds of thousands of people to work; but, they had another purpose.

Koch The New Deal wanted people to feel connected to their federal government, to have faith in its permanence, to see that it was a part of their community. Considerable attention was also given to the architectural design of the New Deal post offices, and most are adorned with beautiful murals depicting scenes from local history. They bring an element of culture to the community, and they remind people of their past.

Now the country is being told that we cannot afford to keep these post offices. Historic New Deal post offices are being closed and sold off, right and left. Recently the Postal Service has closed and/or sold the historic post offices in Westport, Connecticut; Palm Beach, Florida; Ukiah, California; and Pinehurst, North Carolina. Over the coming months, the same will happen to the post offices in Venice and La Jolla, California. The historic post offices in Northfield, Minnesota; Athens, Pennsylvania; and Camas, Washington are also threatened. Many are closed without even a public meeting because the Postal Service is relocating postal services to another location and not actually “closing” the post office.

The Postal Service says these historic post offices are too big — the mail handlers and carriers were probably moved to an annex years ago, thus creating “excess capacity” — so now it does not make any sense to hold on to them, and selling them would bring in much needed revenue. Maybe so, but, there is something else going on.

These post offices are a proud reminder of the great things our government and our postal system can do. These are indeed icons, symbolic of everything the conservative anti-government businessmen have been crusading against since the New Deal. Closing these post offices and selling them to private businesses, to be turned into real estate offices and restaurants and clothing stores, is yet another mode of privatization and sad proof the attack on the New Deal continues to this day.

The whole thing is sad, really. Depriving workers of a decent salary, job security, and the promise of a secure retirement; treating communities as insignificant and undeserving of a post office, transferring historic public buildings to private hands for private profits, putting the interests of the wealthy corporate elite above those of the country as a whole — it’s more than sad, it’s a crime. It will not be good if the nation’s lawmakers continue to permit it to happen.

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Some things fit and some things don’t; but of the things that don’t, maybe I understand them better*

Guest Post by Mark Jamison, retired Postmaster Webster, N.C.

This post originally appeared at Daily Yonder Blog, entitled Speak Your Piece: Pray in Closet, Not Public

Town of Greece v. Galloway SCOTUS in a 5-4 decision held the town of Greece’s practice of opening its town board meetings with a prayer offered by members of the clergy does not violate the Establishment Clause when the practice is consistent with the tradition long followed by Congress and state legislatures, the town does not discriminate against minority faiths in determining who may offer a prayer, and the prayer does not coerce participation with non-adherents.

Dillsboro is in the southwest corner of North Carolina. It has 232 residents, according to the 2010 Census. The Great Smoky Mountain Railroad has a station in Dillsboro and the town’s business district is focused primarily on tourism. According to a Sylva Herald article (which a retired philosophy professor friend sent me), the town has two churches: Jarrett Memorial, which is a Baptist church, and a storefront nondenominational congregation. The town’s website makes clear that the town’s focus is its business district, which makes the mayor’s contention about being exclusively Baptist perhaps a bit presumptuous.

The mayor of Dillsboro, North Carolina, has decided to open the town’s official meetings with Christian prayers delivered by local clergyman after the U.S. Supreme Court cleared the way for such invocations in a 5-4 vote last month.

invisible hand

Mayor Mike Fitzgerald defended his decision by saying the community will accept the new practice and it is in line with the Supreme Court’s ruling. “They said [public prayer is legal] as long as it’s what your town is used to,” he said in an article in the Sylva Herald. “And we ain’t got nothing but Baptists in town.”

Prior to the announced change, Dillsboro opened its town meetings with a moment of silence.

My initial response to my friend’s email was to suggest that perhaps the town might also find it appropriate to read the lyrics to the Bob Dylan song “God on Our Side” (a beautiful Joan Baez version is here). I sent him a link to the lyrics, and he replied that I’d saved him the effort of raising several philosophical arguments in response to the mayor’s position.

I thought too of Mr. Fitzgerald’s own tradition as a professing Baptist. Matthew 6:5-6 seems to offer a pretty clear stance on public prayers. From the King James Version we are told that Jesus taught:

And when thou prayest, thou shalt not be as the hypocrites are: for they love to pray standing in the synagogues and in the corners of the streets, that they may be seen of men. Verily I say unto you they have their reward.

But thou, when thou prayest enter into thy closet and when thou hast shut the door, pray to thy Father which is in secret; and they Father which seeth in secret shall reward thee openly.

Fitzgerald told the Sylva newspaper that the prayer was about seeking wisdom, not conversions. “We’re not trying to make anybody a Christian,” he said. “We are just going to ask for a blessing on the town’s decisions.”

invisible hand Who wouldn’t want a public servant to hope for wisdom? If we take the mayor at his word that he is not trying to make anybody a Christian, then there’s no reason that he and like minded board members couldn’t gather quietly before their meeting and ask for specific religious guidance. But Fitzgerald’s actions seem designed to demonstrate a particular prejudice, not simply toward a Christian preference but even a denominational one with his presumption that, “we ain’t got nothing but Baptists in town.”

My friend the philosopher said that such public prayers are theologically suspect:

In Christianity, prayer is a human action directed to God which derives its sacred meaning from God. (The same can be said of almost any other great religion.) Prayer directed to anything other than God has no sacred significance and is, in fact, profane in the sense that it is not sacred or holy. Prayer that has its purpose, prayer that is directed to, social and political cohesion is not directed to God and is profane. Prayer whose purpose is social and political cohesion is without sacred meaning. The majority opinion in [a] recent Supreme Court decision included the claim … that the prayer in [another] town had only a “ceremonial function and thus was not a state establishment of a religion.” Such prayer is desecrated.

The Supreme Court’s latest decision on this subject is not likely to be its last. The opinion, including the dissents, is well worth reading and pondering. It should make us think about how we get along with our neighbors in small towns when spiritual and religious beliefs enter the public square.

Despite disagreeing with much of what Joe Carter, author of the blog, “First Things” and a self-proclaimed member of the religious right, says in this post from 2010, I can appreciate the respect he shows in his conclusion:

. . . We must recognize that America is not a “Christian nation,” though we should aspire to be a nation whose Christians are admired as good and noble citizens. America is not a “shining city on a hill,” though we should let our light of freedom be a shining example for the entire world. America is not the “greatest blessing God gave mankind,” though it is a great nation worthy of our faithfulness. Patriotism has a role but must not be allowed to expand beyond certain intellectual borders. We are citizens of both the City of God and the City of Man, and must always be sure not to confuse the one for the other.

I’m more comfortable with Carter’s sentiment than I am with that of a commenter on the Sylva Herald site who intoned: “Fortunately, anti-American goons like Mike Fitzgerald are dying off. Hope he’s in heaven really soon!”

Mayor Fitzgerald’s decision to open town council meeting with prayer seem quick and lacking much thought or insight. I do not think; however, the comment above is an acceptable response. I am not sure what it accomplishes other than to demonstrate that emotional reaction is not solely limited to one side in these sorts of discussions.

My grandfather often wondered why when he opened a window for fresh air, someone else might complain about a draft. My grandfather spent his life looking for fresh air, as he called it. We could use a little as we discuss prayer in the public square and state-sanctioned religion.

* Grace Mountain Express, Ashville, NC

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Sooo …. which of Obama’s economic policies do you want to repeal or defeat, Repubs?? And replace those policies with whose–I mean, what–economic policies, exactly? Do tell!

Barack Obama wanted to galvanize Democrats when he insisted this week that his economic policies are on the ballot in November. Instead, the soundbite has already become the centerpiece of new Republican attack ads.

Kentucky Sen. Mitch McConnell uses the clip in a new commercial, shared first with POLITICO. Kansas Sen. Pat Roberts turned his own ad earlier Friday morning. And New Hampshire Senate candidate Scott Brown is using the clip in a web video against Democratic Sen. Jeanne Shaheen.

“Alison Grimes says this election is not about her support for Barack Obama and his failed policies,” a narrator says over footage of a Grimes commercial that showed her shooting a gun. “But Obama himself says a vote for Alison is a vote for his policies.”

Obama’s comments Thursday came in front of a supportive crowd in Illinois during a speech billed as an attempt to refocus the national discourse on his economic agenda.

“I am not on the ballot this fall … But make no mistake: these policies are on the ballot — every single one of them,” he said.

GOP ads pounce on Obama’s economy comments, James Hohmann and Kyle Cheney, Politico, today

The article goes on to say that Kansas Sen. Pat Roberts and New Hampshire Repub. Senate nominee Scott Brown will run similar ads in their respective states.

To which I say: Please do.  It is, after all, Obama himself, not Obama’s actual economic policies—which most people have no clue about—that creates the problem for the Democrats.  Much less is the problem for the Dems the Senate Democrats’ proposed economic policies— which most people have no clue about.  The economic policies that the Senate Republicans are blocking.

Obama prefaced those comments with some actual specifics about the results thus far of one set of his policies, Obamacare. Justic Sink of The Hill reported yesterday (H/T Paul Waldman):

“There’s a reason fewer [Republicans] are running against ObamaCare — because while good, affordable healthcare might still be a fanged threat to freedom on Fox News, it’s working pretty well in the real world,” the president said.

The day after the anniversary of rollout of the Affordable Care Act’s exchanges, Obama argued that a “dramatic slowdown in the rising cost of healthcare” had led to more individuals being covered and prices staying lower.

“If we hadn’t taken this on, and premiums had kept growing at the rate they did in the last decade, the average premium for family coverage today would be $1,800 higher than they are,” Obama said. “That’s $1,800 you don’t have to pay out of our pocket or see vanish from your paycheck. That’s like an $1,800 tax cut.”

And, Obama said, the cost of government healthcare programs like Medicare and Medicaid are decreasing alongside the costs of private insurance.

“Healthcare has long been the single biggest driver of America’s future deficits,” Obama said. “Healthcare is now the single biggest factor driving those deficits down.” …

“In just the last year, we’ve reduced the share of uninsured Americans by 26 percent,” Obama said. “That means 1 in 4 uninsured Americans — about 10 million people — have gained the financial security of health insurance in less than one year.”

The president also argued that the availability of insurance through ObamaCare meant young entrepreneurs were freed “to strike out on your own and chase that new idea,” rather than remaining in jobs that provided medical coverage.

It’s great that Obama finally deigned to speak publicly about the specifics—including specific results—of one of his policies, Obamacare.  He generally doesn’t do speaking publicly about the specifics (and certainly not specific results) of his policies, or, regarding most of his and the congressional Dems’ economic policies, even the existence of their policies and policy proposals.  Which may be why no one knows the specifics, or even the generalities.

But, the press being the press, and the political punditry being the political punditry, what matters is that Obama said the words, “I am not on the ballot this fall … But make no mistake: these policies are on the ballot — every single one of them.”  “These policies” could mean … well … it doesn’t matter.

As it happens, a majority of the public, even in “red” states, aren’t all that keen on the prospect of the Koch brothers’ policies becoming Congress’s blatant policies.  So the new Republican ads about Obama’s policies being on the ballot should be countered not only with a demand to know which specific economic, fiscal and regulatory policies these candidates want to repeal but also with reminders that the Koch brothers’ policies are on the ballot, too.

Every. Single. One. Of. Them.

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Rolling Jubilee: A Wolf in Sheep’s Clothing?

authored by Alan Collinge of the Student Loan Justice Organization, a grass roots group seeking the swift return of standard bankruptcy protections and other consumer protections to all student loans in the U.S.

“We started by going after Sallie Mae debt because Sallie Mae is for my generation sort of the Voldemort, this cosmic level of evil out there,” Gokey said. But after suggesting that Sallie Mae typically sells those debts for 15 cents on the dollar, St. Peters abruptly changed course and refused to deal with Gokey and Debt Collective, he said. (St. Peters did not return a call seeking comment.) Think Progress, “Debt Activists Just Canceled $4 Million In Student Debt. For Their Next Trick, They Need Your Help”

In recent weeks, much media attention has been focused on a project dubbed the “Rolling Jubilee”- an action whereby people’s defaulted student loans are purchased for “pennies on the dollar” with donated money, and the debt is extinguished. To date, the Jubilee claims to have forgiven some $4 million in defaulted student loan debt at a cost of about $100,000.

Sounds like a great idea, right? After all, who would not want their student loan debt to be paid off for them? Looking at the board members for the Rolling Jubilee (which includes Occupy Wall Street pioneer David Graeber), one could only assume this would be a slam dunk for the 99%. Further evidence that they may be onto something: Sallie Mae’s Douglas St. Peters has criticized the project, and the concept of loan forgiveness generally (if the banks oppose it, its got to be good, right?). Surprisingly however, it turns out that this project is, I am sorry to report a terrible idea with troubling implications. Consider the following and see if you don’t agree:

Putting aside the obvious criticisms- that the project only applies to private loans and does nothing to address the rising cost of college, skyrocketing debt loads, or the uniquely predatory nature of the debt due to the removal of fundamental consumer protections (like bankruptcy) that exist for all other loans, the most troubling aspect of this project lies in the systemic effect of the project- who it helps, and who it really doesn’t. Upon examination from this perspective, the project reveals itself to be, frankly, suspicious.

Think about it. The RJ, by purchasing defaulted debt, only “feeds the beast”, and in fact makes defaulted debt more valuable on the market. This rewards the horribly predatory behaviors that the absence of bankruptcy protections and other factors have enabled in the private student loan industry. Since, after exhausting all existing opportunities for collection of these loans, the debt holders know there is a buyer for the “worst of the worst”, this only encourages the lenders and loan holders to inflate this debt as much as possible, with the knowledge that there is a willing buyer for even the worst performing loans! So that is quite a red flag,

Being a long time Zucotti Park resident myself, I’d almost be willing to overlook this distasteful aspect of the project, and instead focus on the suffering that this transaction eased…but there again, we get an unpleasant shock: The loans that the project buys are almost certainly at or past their statutes of limitations(private student loans still have these), and/or were likely never paid on by the borrower much if at all. So while it is impressive to hear of the large amounts of debt being forgiven, the fact is that the people who are finding their debts erased more than likely won’t care much because they are either no longer under any legal obligation to pay the note and have long since forgotten about it, or never intended to pay the note in the first place, and never would! So these borrowers won’t likely be gushing with praise and thanks, and frankly won’t be helped much if at all by the repurchase of the debt. I suspect that people learning of their debt being purchased and erased were, instead of relieved and grateful, were more perplexed as to why anyone would go to the trouble of clearing up debt that they themselves had forgotten about long ago! By far, the happiest participant in these transactions, are the banks/collection companies who are thrilled to get anything for the loans! People with cosigners for their loans (about 90% of private loan borrowers), and people who have been paying at least something for their debts should not hold their breath if they are hoping to one of the lucky few to get their loans absolved- it simply won’t happen.

So this project does very little for the borrowers it affects, and nothing but encourage and exacerbate the predatory underpinnings of the lending system by rewarding instead of resisting it (Resistance being an oft-repeated theme by the folks running this program, and its affiliated organization, dubbed Strike Debt). There is no resistance, here, only paying into a predatory lending system for almost no real benefit. I wouldn’t go so far as to call bullshit on this project, but it is really, extremely tempting to.

Unless there were grand plans to somehow buy off ALL student loans in the country- and I’ve been told that there isn’t, there is almost nothing good to say about this project, and a lot of troubling questions that cry out for answering.

It is surprising to me that the well regarded people (David Graeber, Andrew Ross, and Astra Taylor) who sit on the board for this project would let their names be attached to it upon reflection.

Notes and References:

Debt Activists Just Canceled $4 Million In Student Debt. For Their Next Trick, They Need Your Help Alan Pyke, “Think Progress”

“The Argument” Alan Collinge, Student Loan Justice Org.

Strike Debt is a nationwide movement of debt resisters fighting for economic justice and democratic freedom. You are not a loan.

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Gail Collins’ don’t-miss column on Social Security—and on Joni Ernst—today

Highlights:

There was this at the Senate debate in Iowa on Sunday:

“I will fight hard to protect Social Security and Medicare for seniors like my mom and dad because our Greatest Generation has worked so hard for the American dream for our families,” said Republican Joni Ernst.

Like many conservatives, Ernst supports some sort of privatization in the Social Security program. She’s a little hazy on the details. But we do know that the Greatest Generation is the name Tom Brokaw gave to the Americans who came through the Depression and spent their young adulthood fighting World War II. They would actually be Joni Ernst’s grandparents.

There are two possible interpretations to her statement:

A) She wants to portray Social Security and Medicare recipients in the noblest light possible.

B) She is promising to protect benefits for everybody over the age of 85.

The Senate race in Iowa is one of the tightest in the country, and the debate drew so much attention that it got a segment on “The Daily Show.” Jon Stewart highlighted the part where Ernst got personal with her Democratic opponent, Representative Bruce Braley. (“You threatened to sue a neighbor over chickens that came onto your property.”)

We are not going to have time to delve deep into the controversy that is known to political junkies as Chickengate. We are focusing on Social Security! We haven’t talked about this issue for a long time, and it ought to be part of our election-year repertoire.

Conservative Republicans still tend to hew to the theory that the system is “going bankrupt” and needs to be turned into some kind of private retirement investment account. They also generally promise to protect people 55 or over from any change.

“I’m not going to take away your Social Security. Don’t worry about it. Anybody over 55 doesn’t have to worry about any reform measure,” said Senator Pat Roberts of Kansas in a recent debate. He added: “You don’t have to worry about doing anything with Social Security in the next part of this session. Harry Reid will block that real quick.”

Mentioning the mendacity of Majority Leader Harry Reid in every other sentence is a verbal tic Roberts has acquired. However, if you break that statement down, what he seems to be saying is that if you’re, say, 52 and want to make sure Social Security stays the way it is, you will have no problem as long as Democrats control the U.S. Senate.

By the way, Social Security is not going bankrupt. In 2033, incoming payroll taxes will no longer be enough to pay for all the benefits. But they’ll still cover about 75 percent of the payments and we could take care of the rest of the problem with a few tweaks — like getting rid of the cap on Social Security taxes. (Currently, all income over $117,000 is exempt from the payroll tax.)

The Center on Budget and Policy Priorities also helpfully points out that “by coincidence,” the amount Social Security would need to stay completely in balance over the next 75 years is almost exactly the same as the amount the government lost when Congress extended the Bush tax cuts for people making over $250,000 a year.

If you happen upon a congressional debate in the next few weeks, feel free to ask the candidates what they’re going to do to protect Social Security. Bring along a 54-year-old friend who might helpfully burst into tears when anyone starts promising to protect the 55-year-olds.

Indeed, but just be sure that the 54-year-old doesn’t confuse a Homeowners Association president with a court clerk.  At least not a Homeowners Association president who’s also a Republican operative.

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It’s the Dems, not the Repubs, that should ‘nationalize’ this election. Here’s how:

Best as I can tell, the concept of “nationalizing” this election has been used exclusively to mean that the Republicans want to make this election all about Obama, Obamacare, and such.  Therefore, if the election is “nationalized,” the Repubs win, right?

In a post here at AB two weeks ago, I listed some of the many important financial-matters legislative accomplishments of the Dem-controlled Congress of 2009-10 that most people don’t know about or have forgotten about, and that I would love to see the Dems run on.  Three days after I posted that post, Elizabeth Warren gave this short, impromptu video interview to New York Times reporter Axel Gerdau, in which she discussed, among other things, the Senate Republicans’ filibuster earlier that day of an important bill she had sponsored that would significantly lower interest rates on former students’ student loans.  Warren used it as an example to illustrate the very essence of what is transpiring in Congress, courtesy of the Republicans, and (in the Senate) of Mitch McConnell.

Just as with the financial-industry legislation enacted during the first two years of the Obama administration, virtually no one even knows about the student-loan interest-rate bill, much less why it won’t be enacted.  The clarity and passion with which Warren spoke, about that bill and, more broadly, about the situation in Congress is something to behold.  A simple playing of that videotape as an ad, especially in Kentucky, but also in the other states that have pivotal senate races, would matter critically, I believe—especially if Warren would cut a follow-up ad explaining the filibuster situation.

What political pundits and Dem politicians and consultants don’t get about Warren’s popularity is that her issues are not presented as “women’s issues” but instead as hugely important financial issues that make a difference to men as well as women.

As regular readers of my posts know, I usually pepper my posts with attempts at humorous sarcasm.  But there’s nothing at all funny about so many Democratic candidates’ and officeholders’ consistent failure to educate the public about non-gender-based economic-populist legislation—legislation that has already been enacted, and legislation that has been proposed but languishes.  Off-hand, the only two Dem senate candidates who have done that are the two who are doing well in the polls: Gary Peters in Michigan, and Kay Hagan in North Carolina.

AB is just a little blog, with only a couple thousand views each day, so unless my point is picked up by other, more-widely-read blogs, my comments here will go unnoticed.  I’m certainly no political consultant, but the ones the Dems use apparently think it’s still 1992. (They’ve all been around since then as consultants—many of them since before then—haven’t they?)  This is so painful for me to watch.

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