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“Trump fatigue” is a horrible malady as part of which the afflicted turn their backs on even the most zany and outrageous of President Trump’s proposals for America and turn their attention to more intellectually challenging pursuits — like handicapping the outcomes of “The Golden Bachelorette” or joining up with the team from “Expedition Bigfoot.” Someday, possibly during the midterm elections, things will go back to normal. That’s what we tell ourselves.
Jack McKinney lives in New Gloucester. But behind all the bile and hyperbole spewing from 1600 Pennsylvania Ave., there are actually some outright stupid (if not incredibly dangerous) ideas being floated that could seriously damage our country.
Today, I’d like to look at some of the loose talk regarding the U.S. Postal Service.
I’ll start by directing you to a report titled “ USPS Privatization: A Framework ,” dated Feb. 27 of this year and issued by the equity research department at Wells Fargo. You might remember Wells Fargo in connection with a credit scandal that broke about 10 years ago; some geniuses in its sales department thought it would be a good idea to “invent” tens of thousands of imaginary accounts to bolster the company’s balance sheets.
The problem was that these imaginary accounts were drawn up in actual people’s names. About 85,000 people had a combined total of $2 million in account fees tacked on to their credit reports. Fortunately, the Consumer Financial Protection Bureau stepped in and helped to correct the situation.
I mention the CFPB here because (also in February of this year), Trump & Co. gutted the leadership of the agency and then turned Elon Musk loose on it. If we get into any trouble from Trump’s many financial plans for America, please don’t look to the CFPB for any help.
Back to the report. Wells Fargo acknowledges that it will take legislation to move forward with privatization and that the chances of that type of bill passing through Congress on its own are essentially zero. Instead, the authors propose to tack it on to a piece of “must-pass” legislation, like the federal budget, and sneak it into the Congressional Record.
In layman’s terms, this is called blackmail. We all get something we like (continued government function) while Wall Street gets to carve up a tasty federal asset. But it’s really not that tasty of an asset.
The report highlights the idea of “harvesting” an estimated $85 billion of value in Postal Service real estate but neglects to mention that the Postal Service rents almost three-quarters of its facilities. Those rents are known as liabilities in the financial world and Wells Fargo does not mention how they are to be paid for. The chief liability the report mentions is about $400 billion of pension and health care obligations that the USPS has to its employees.
That sounds like a lot — until you consider that the Postal Service has about $300 billion in assets to put toward it. Yeah, I know, $100 billion is still a big chunk of change, even more so when you read the part of the report where Wells Fargo proposes shouldering the taxpayer with it. Also on the liability side, the report also fails to mention a financial term called “deferred maintenance.
” Allow me to explain this. If a company has up-to-date equipment and a well-trained workforce, the owner will probably not sell it. Instead, he or she will continue to operate and reap the financial benefits of doing so.
If a company has a 30-35-year-old fleet of vehicles, inventory software from the 1980s and a high rate of employee turnover (like the Postal Service), you can probably buy it on the cheap, but you’ll have to pay for some costly upgrades and modernization. This is called deferred maintenance. Don’t look for an explanation of it in the Wells Fargo report; it isn’t there.
Yes, the Postal Service has its problems. As a former business executive turned rural carrier, I see them every day. But there are a lot of ways to solve them without gutting the institution.
Wells Fargo does point out that USPS’s delivery rates are too low and could be raised by over 100% in some cases. This would be a good start. Ridding the management of political toadies would also help — micromanagement by the government is the cause of most of the Postal Service’s present difficulties.
The key thing is to focus on enhancing the one thing that Wells Fargo forgets and that I haven’t mentioned yet — the very high degree of public trust that the USPS has always enjoyed. That’s why I went to work for the Postal Service and, if I can distract my boss from the op-ed page, I look forward to continuing to do so. We believe it’s important to offer commenting on certain stories as a benefit to our readers.
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