The background is that as many as 3,700 post offices are going to be closed. The union hates that. The union is spending big bucks on a slick ad campaign in an effort to stave off the inevitable.
“We must dispel the persistent myth that our work is funded by taxpayers.”
The ads show happy postal workers and all that mail they drive around. The heart of the UPWU message is:
"The post office is funded solely by the sale of stamps and postage."
By what magic does the PO do all that good stuff they do without sucking at the taxpayer teat? Easy. They borrow billions at near zero interest rates from good old Tim Geithner. Tim is responsible for the Federal Financing Bank. This is an off balance sheet funding vehicle (“SPIV”). Take a look at the balance sheet as of June 30, 2011.
So the PO has wracked up 12 large. What’s the Vig on this? Nothing! The debt is being rolled over at less than 20 basis points.
This is a perfect example of what is wrong with America. When faced with a problem what do we do?
(I) Lend money to the problem in the hope it will go away.
(II) Hide the debt in SPIVs.
(III) Burry the problem with zero cost debt.
(IV) Lie to the public and say there is no cost.
(V) Kick the can down the road and declare success.
The PO issue is small potatoes. But in a much bigger way all of D.C. is following the lead of the PO. Steps I through V are being played out as I write. It may take a few days for the markets to figure this out. But they will.
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Yeah, I was gonna say--if the public is not paying for the PO, then why are they showing slick ads trying to influence us?
ReplyDeleteIf the PO is fully funded by stamps, how come they need to close those offices?
This is an ad campaign that makes no sense. But maybe throwing good money after bad is what the PO does best?
Jim,MtnViewCa,USA
Great post, Thx
ReplyDeleteHow can I get some of that there "offbalance sheet funding"? I would like some of that.
ReplyDeleteNo way, huh? How about a magic, platinum coin then...
Where will this water stream or stream of consciousness end but crashing into rocks?
ReplyDeleteWhat will follow is the loss of jobs and the dignity of people at the Post Office, not any loss to all the crafters of these political solutions who walk away and wash their dirty hands of such baseless thinking that leads to the destruction of so fundamental a function as the nation’s post office. As you say, one day, the markets will find out of this stream of thinking, and that the White House is a cockroach motel.
When I heard this propaganda, my first thought was: I hear they lost over $5 billion last year, and they also lost money for many of the years before that. If they have a union, and they are (supposedly) self-funding, how did their "retained earnings" escape notice of the union leaders?
ReplyDeleteEvery year, their "excuse" for raising first-class rates is, "We need to stop the red ink."
Additionally, how does a business with a service monopoly continue to lose money every year? Easy; they're part of a government program.
It is the era of smoke and mirrors. Just like the communists who proposed building a dam across the Sea of Aral so that from the waterfront in Aralsk everything appeared normal (while in reality the body of water had pretty much disappeared), the west now does the equivalent with their accounting. As long as everythig appears in order, the reality is ignored. Style over substance.
ReplyDeleteJohn McCain = More of the Same
ReplyDeleteBarrack Obama = More of the Same (formerly "Change We Can Believe In")
Who'd have thunk a "business" like the post office would run into problems paying their postal carriers $80,000/year to deliver mail. The job of delivering mail should be an example in the dictionary of what a minimum wage job is - it is insane that the postman is paid $80,000 to do that. Note to the Postmaster General - if you can train someone to do a job in 10 minutes, it's a minimum wage job - not one that deserves $80,000 a year and likely ridiculous perks, vacations, healthcare, to go along with it. Probably promised them ridiculous pensions too, right?
ReplyDeleteWhy has Congress ordered the PO to PREPAY health benefits for retired employees to the tune of over $5 Billion per year, especially at the same time the economy is tanking? Then too, why will not the Postal Rate Commission allow them to raise rates to allow them to operate at a level that is at least break even? This is a sure formula for the default and destruction of the PO to the detriment of everyone. Say what you want, but most people including elected representatives are completely naive as to the intricacies of the PO. I am equally critical of the internal operations, but something is truly going south with the overall squeeze being created by the very entities who should be assisting instead of destroying the PO.
ReplyDeleteAlso, there exist many thousands of independent contractors who perform all of the same duties as employees, but get no benefits or subs, etc. They are charged with providing their own vehicles, maintenance, etc., and get paid in many cases barely breakeven operations. They must even pay self-employment social security but do not fall into the IRS definition of independent contractors -- no justice there, except that they save the PO $Billions which might have caused them to default prior to now. These contracts are not approved unless the PO knows that the cost to them ultimately will be less than 1/4th of what it would cost them to operate the same routes in-house.
ReplyDeleteRoll it all into UPS and FedEx
ReplyDeleteWhy not roll UPS&FedEx into the PO? We go house to house daily!
ReplyDeleteNo Fed Ex and UPS do not go house to house on a daily basis. They only drive by. The USPS is the only entity which literally goes to every home and business virtually every day. $80,000 per year for a job that you can train to do in 10 minutes is not true. In some areas of the country perhaps but not in most. I challenge anyone to carry a route, you would wise up very quickly. Too many believe they have it all figured out.
ReplyDeleteYep, 10 minutes to learn the job is quite possibly to short a time. Some postal workers are too stupid to learn it in 10 minutes.
ReplyDeleteThe average Letter Carrier earns about 50K, trained for weeks (if not months) to learn the craft, studied, tested and scored in the top per-centile of the literally thousands that took the test at the same time, puts up with being micro-managed, over-worked, and barely appreciated for thirty+ years, to carry not only the important letters from your loved ones, but additionally, thousands of pounds of junkmail on his or her back, in inclimate weather, sometimes 7 days a week (until his/her seniority allows days off), just so that the public can actually have satisfaction knowing that their letters sent are safe. How dare anyone comment about minimum wage and 10 minute learning time! For every Letter Carrier that represents the Service, you should talk to all the hundreds that could not make the cut, or quit because of the micro-managing and stress that goes along with the job! Walk a mile in their shoes (or ten, carrying 35 pounds of weight, on a time schedule, for 10 hours straight, skipping lunches and breaks, just to stay on time, scanning points and packages all day long, just so that management can watch you without actually being there to watch you, all the while being told you are never good enough, fast enough, accurate enough, etc.) before you become an expert on why the Post Office is losing money. Start focusing instead on the pitiful management that runs the operations, and the junkmailers that get such a good deal, that they become too valuable to say "no" to.
ReplyDeleteI just bet that if we put the postal "workers" in charge, and got rid of the union, that those workers would turn the PO into a profitable enterprise.
ReplyDeleteI'm former union, they all become bureaucratic fiefdoms just like government where the only desire is to cash in.
Notice Every person at every Level at the VERY top is a
ReplyDelete*************JEW*************************
Goggle , all tragdies and find th the " Jew "
Who is me !! When they created it
From Rome-to Greence-to Russia-toGermany-to
Euro-to America to
the Crucifixion
of Jesus the " Jew " and his
Look-up / Google (Hype -Island=Fed)
Read Shakespeare
All westenm finance is contolled by a
______(Nationality) (AS EVERY nation has Home -
Made Jews (From thier migration (Ask World
Jewish Congress held Yearly ) (NO JOKE) (They
decide the Worlds' Future )
Thesae are Fact Read " Anthony Sotton )
Decesed West Virginis Professor / Or Ellen
Brown s' " Web of Debt )
Silver are there
ASK MICHAEL MILLKEN or Mr. Kastings
ReplyDeleteif above is " True or not " Or Bernie Madoff