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Former Deputy PMG Ron Stroman discusses mail delays and threats to the election

H/T: When I woke up.. blog. Everything you don’t know that you don’t know..

Former Deputy Postmaster General Ron Stroman was on MSNBC with Nicolle Wallace. His take on the Senate hearing yesterday, the delays going on at the Postal Service, and the risks for voting by mail is fantastic. Stroman believes that there is a ‘significant question’ whether delays in mail are intentional, and he expresses concerns over the disenfranchisement of thousands of voters in light of significant delays in mail delivery.

I had more to this and somehow deleted it. So, I am starting over with “why” I think we need to heed former Deputy Post Master General’s concerns.

Sen. Gary Peters (D-MI) asked PMG Louis DeJoy, “Will you be bringing back any mail sorting machines that have been removed?” To which PMG Louis DeJoy answered, “There is no intention to do that, they are not needed.” This occurred during a Senate Homeland Security & Government Affairs Committee. I am not sure if Senator Peters pursued this further; but, I believe this needs a “Why” question and maybe 4 more until he has satisfied he has an answer to a potential problem such as a lack of capacity. PMG Louis DeJoy does not look like the type who would wander around a Postal Sorting facility such as located in Pontiac, Michigan from which 12 of these machines were removed. Pontiac, MI is a major sorting facility which might cause issues with ballots being delivered timely. There is more to DeJoy’s answer than we do not need them anymore.

And the old machines, what happened to them?

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Innovation

The customer goes online and chooses a face mask from those listed on the USPS Web Page and places an online order. Their order goes direct to the factory making the mask of choice where it is filled within minutes or less and dropped in the on-site USPS bin that is picked up several times a day. The USPS then delivers the order to the customer. The USPS could enhance its revenue stream by charging a very small fee for advertising on its Web Page

Background: For the last maybe five years I have, for the most part, limited my substitute teaching to AP and Honors Economics, Government, History, Physics, and Environmental Science. These are subjects where I can wing-it; take that late call where I know that there will not be a lesson plan. On my way in I thinking of subject matter related questions. I begin by asking the class where they are, then go Socratic asking questions that require that they apply what they have been studying. History took the longest to figure out the applied; I’ve shown some of how I do the History here at AB. I seldom lecture, don’t feel that I have to teach the subject matter; do want to help both the teacher and the students.

High Schools, desperate for ways to help their students succeed, can be too quick to fall for the buzzword economic solutions such as Entrepreneurship, Free Markets, … and offer them as panaceas without much justification. Both Entrepreneurship and Free Markets get my attention. If the students bring either of them up, I open it up to discussion then segue to innovation by pointing out that all Musk and Bezos did and are doing is asking how it should be. Something that they as students could do. The huge success Musk and Bezos enjoy comes from successfully implementing the changes. Walmart had asked the question of how it should be; Bezos saw what Walmart had done and asked the next logical question in re brick and mortar. I bring the class around to what’s next. I’ve no doubt that Bezos has fully realized that his warehouse model is already antiquated and that the next step is direct from factory as in my USPS example, that’s the way his mind works. Sorry Jeff, this time it goes to the USPS.

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Need proof changes at the USPS are slowing down the mail?

Here you go!

Save the Post Office is edited and administered by Steve Hutkins, a literature professor who teaches “place studies” at the Gallatin School of New York University. Prof. Hutkins (Steve) is the author of this commentary. (Angry Bear Blog has had a long relationship with both authors Steve Hutkins and Mark Jamison both of whom author the “Save The Post Office Blog.”)

Everyone knows the mail has been slowing down. News reports are filled with stories from postal workers and customers about delays. E-bay sellers are complaining about shipping problems with the USPS, and many say they have been switching over to private carriers. Talking Points Memo has an ongoing column based on reports from the field.  Ask anyone, and they can tell you about problems they’ve had getting a package or an important letter.

For a while, it seemed that the pandemic was causing these problems, and there’s no question that the surge in packages was a challenge for the Postal Service to keep up with.

But then came Mr. DeJoy, the new Postmaster General.

Within weeks of his taking office in mid-June, changes were being made at processing plants and post offices that appeared to be causing delays not just in parcel delivery but for letters and flats as well. In a memo to postal employees, DeJoy admitted it: “Unfortunately, this transformative initiative has had unintended consequences that impacted our overall service levels.”

These “service levels,” aka “service performance,” refer to the percentage of the mail that is delivered on time, i.e., within the “service standard” for each type of mail. For First Class mail, the standard is 2 days for local mail and 3 to 5 days for regional & national mail. Marketing Mail has a service standard of 3 to 10 days. Typically, about 85 to 95 percent of the mail is on time, although in some cases the performance scores can be lower and the delays can go on for several days.

The Postal Service shares quarterly service performance reports on its website and with the Postal Regulatory Commission (PRC), which posts them here. The most recent reports cover the third quarter, April 1 – June 30. This table based on those reports compares the third quarter performance for single-piece First Class mail in 2019 and 2020. It shows declines in near every district. In some, the drop was striking. Nationally, performance on 2-day mail dropped from 93.9 percent to 92.4; for 3-5 day mail, from 86.5 to 81.4 percent. Presumably, these declines were due to the pandemic.

As for what happened after June 30, the Postal Service hasn’t provided any details about the delays. It knows, of course, exactly how bad the delays are and where they are occurring, as reported internally in weekly performance reports similar to the quarterly reports. But these weekly reports are not shared with the PRC or the public.

One can, however, get a good sense of what’s in those weekly reports by looking at some charts that appear in two USPS presentations given earlier this month that were published on PostalPro, a website where the USPS shares information with its business customers.

As seen in the following charts show the on-time performance for the Pacific and Eastern Areas on a weekly basis for the past few months.  The charts prove that it’s not your imagination. The mail has clearly been slowing down since the beginning of July — dramatically.

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Real personal income, spending, and consumer sentiment for July

Real personal income, spending, and consumer sentiment for July

July personal income and spending were reported this morning. Since real personal income drives one important election model, I have been waiting to see if July would reflect the end of the emergency Congressional assistance. It didn’t.

Real personal income rose less than 0.1% in July. While it is down by -6% from April, it is up a huge 7.1% from July 2019. Real disposable and Per Capita income show similar trajectories:<

April represented the $1200 stimulus checks as well as the Congressional emergency assistance. The former was one time only; the latter ended at the end of July.

 

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Weekly indicators for August 24 – 28 at Seeking Alpha

by New Deal democrat

Weekly indicators for August 24 – 28 at Seeking Alpha

 My Weekly Indicators post is up at Seeking Alpha.

The economy as a whole is being driven by lower interest rates, unprecedented Fed supply of new money, stock market gains, and – through July – the Congressional emergency stimulus and unemployment benefits. This is still showing up in all indicator timeframes.

It took a few weeks for the effects of the pandemic lockdowns to show up in late March and April. I am still looking for effects of the end of the Congressional emergency assistance.

As usual, clicking over and reading should be educational for you, and rewards me with a couple of pennies for the efforts I put in.

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Jobless claims slowly continue to get “less worse,” while longer term deadweight loss builds

Jobless claims slowly continue to get “less worse,” while longer term deadweight loss builds

The good news in this morning’s jobless claims report is that the trend of “less worse” news continues. The bad news is that the improvement has slowed to a snail’s pace, at levels worse than the worst levels of the Great Recession.

On a non-seasonally adjusted basis, new jobless claims declined by 68,038 to 889,549, a new pandemic low. After seasonal adjustment (which is far less important than usual at this time), claims declined by 98,000 to 1,006,000, the second-“best” level of the pandemic after 2 weeks ago. The 4 week moving average also declined to a new pandemic low of 1,068,000.:

Continuing claims, on both an un-adjusted and seasonally adjusted basis also continued to decline to new pandemic lows, by 272,941 to 13,909,872, and by 223,000 to 14,535,000 respectively:

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More evidence that housing has roared back

More evidence that housing has roared back

This morning we got the final important July housing reports: new home sales and house prices.

New single home sales are very volatile and heavily revised, so it is always wise to take the initial report with a grain of salt. On the other hand, it is the most leading of all the reports.

With that caveat, this morning’s report of 901,000 sales annualized is the highest reading since December 2006! It is also in line with peak home sales in all periods prior to the 2000s housing bubble:

The below graph focuses on the last 8 years, and compares with the much less volatile single-family permits (red, right scale):

 

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More on the bifurcation between the booming stock market and the bust of an economy

More on the bifurcation between the booming stock market and the bust of an economy

 I wrote that new stock market highs in the face of the worst US economic downturn since the Great Depression were primarily a function of a few stocks that are particularly tied to the global economy rather than tethered to the US; that those stocks also benefited from delivering online content or physical stuff to homebound consumers; and that the background long leading indicators favor an expanding economy once the pandemic is behind us.

In addition to Paul Krugman, here are two more commentators who have weighed in on the issue, making much the same points as I did.

“[I]t’s not rare for a small group of stocks to account for a large percentage of the S&P 500. What is important is the relative performance of those 10 stocks to the other 490 stocks. The ratio fluctuates based on which group is outperforming, resulting in a continuous battle between mega cap stocks and the merely large and mid-sized stocks.

“….

“What makes 2020 so unique is the externality of the pandemic and societal-wide lockdown. The economic impact hasn’t been evenly distributed. Large international tech companies essential to remote office work and people stuck in their houses have thrived. Add to that how much better the rest of the world has managed its response to the pandemic versus the U.S.’s bungled response. One would be hard pressed to find another era when circumstances led these two groups of companies to diverge as much as they have of late.”

Ritholtz links to an earlier piece from about a month ago:

 

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FDI in a Risky World

by Joseph Joyce

FDI in a Risky World

The pandemic has shown that global supply chains are vulnerable to shocks. Output contracted as factories were closed in China and the impact was transmitted to firms further along the chains and the distributors of the final goods. Foreign direct investment had already slowed in the aftermath of the global financial crisis of 2008-09, and there were questions about its future (see here). How will multinational firms respond to the new shock?

The McKinsey Global Institute seeks to answer this question in a new report, Risk, Resilience and Rebalancing In Global Value Chains. The authors point out that the pandemic is only one of a range of shocks that can disrupt production. They distinguish between catastrophes that are foreseeable (such as financial crises) and those unanticipated (acts of terrorism), as well as disruptions that take place on a smaller scale. The latter can also be divided between those that are foreseeable (climate change) and those that are unanticipated (cyberattacks).

The report then measures the exposure of different business sectors to the various shocks. Those that are heavily traded are more vulnerable. These include communication equipment, computers and electronics, and semiconductors and components, all industries that are seen as promoting growth. Apparel is another sector that is vulnerable to risks, such as the pandemic and climate change.

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Whining About Lack Of Academic Leadership

Whining About Lack Of Academic Leadership

 At my so-called university named for the fourth president, the slave-owning “Father of the Constitution.”  No, I am not going to talk about the racism issue, which there is some effort to deal with on campus, notably in renaming three buildings named for Confederate figures, with our Provost originally from South Africa speaking reasonably intelligently about that issue.

No, we had our annual general faculty meeting to begin the year, classes supposedly beginning on Wednesday, supposedly a mixture of live and online, although likely to go totally online any minute as Eastern Mennonite University also in Harrisonburg just went totally online and delayed student move-in due to an outbreak of the virus, and Facebook is full of photos of our students partying without masks and packed together on balconies. We will not be far behind on that one.

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