Anyone who has followed British politics has watched the British Labor Party dive head first into the pool of the Loony Left. Their new leader, Jeremy Corbyn, is an open member of the LL.
Britain’s turn to the hard left is potentially a harbinger for the Democratic Party. For the first time, a majority of Democrats now favor socialism over free market capitalism. In this environment, it should come as no surprise that socialist presidential candidate Bernie Sanders (I-Vt.) can openly advocate policies that would emulate Corbyn’s open embrace of a government-run economy. The self-described democratic socialist has proposed abolishing tuition fees, enacting a “People’s Quantitative Easing” to fund green energy schemes, nationalizing public utilities, and calls the terrorists from Hezbollah and Hamas “his friends.”
It is no surprise that Sanders has gotten behind a hare-brained scheme initially proposed by Fauxahontas herself, Sen. Elizabeth Warren (D-Mass.). Warren dreams of replacing the private short-term loan industry with a government-run loan program run from the model of efficiency, the United States Post Office.
Sanders endorsed the scheme last week, arguing that turning the post office into a bank would help the eliminate the need for check-cashing companies and payday lenders while infusing needed cash into the government’s dinosaur.
The Post Office lost $1.5 billion second quarter of 2015. Officials were joyous at the number as last year the Post Office lost $1.9 billion in the second quarter of 2014. In fact, the Post Office has lost at least $46 billion since 2007. Only could people in government take an organization that is losing billions every year could, propose entering a market with a near 40% default rate, and think they could turn a profit!
According to the U.S. Postal Service Inspector General, supporters of the initiative claim they would make $8.9 billion a year off of what they describe as “non-banking financial services.” According to the IG report,
Services could include reloadable prepaid cards with features that encourage people to save money, mobile transactions, and products that help the underserved take part in e-commerce. They also could include new ways of transferring money both domestically and internationally, and perhaps even include small loans that would help customers overcome unexpected expenses. As society becomes increasingly cashless, the Postal Service’s ability to provide a physical link to the new digital economy will become more and more vital.
Does anybody really think it a good idea to put the Post Office in charge of all of these services? It is very likely that this will lead to massive cash flow losses by the Post Office and a requirement for even more overcompensated individuals to become postal workers?
This isn’t the first time the Postal Service tried to become a bank. During the Great Depression, postal banks held a little over billion in assets but people soon realized that banks were better at being banks. Nearly 50 years ago, the Postal Service got out of the business as deposits declined precipitously. But bad ideas are like Dracula — they never really die.
With the left at war with short-term lenders, Warren and Sanders recognize that there is a need for so-called “payday loans.” They just don’t want anyone to profit from them — but the government. And we know that the Post Office will take a product that has proven profitable, and make it unprofitable in no time.
The postal service can’t deliver the mail. Only a socialist would think it could turn a profit by becoming a lender, too.
Cross-posted at The Blaze