Tuesday, February 4, 2014

Banking Goes Postal

         Let’s try to think up something new, something really stupid.  I mean REALLY stupid, so stupid that no one would believe it.
         Like this:  Because the poor don’t have much money, they can’t afford to use delivery services like Fedex and UPS.  Among the clientele of those two home delivery services, the poor are under-represented.  So, in order to even out the home delivery playing field, let’s mandate that failing banks go into package delivery for the poor.  That way the poor are helped and so are the failing banks, who can charge for their services.
         But what has package delivery got to do with banking, you ask?  Nothing much, that’s for sure.
         It doesn’t matter. 
         I know it sounds preposterous.  But don’t shut it down too quickly.  All I’ve done is reverse the latest Democrat brainstorm, this one from Elizabeth Warren, the native American white woman from Massachusetts.  In the wake of government interference that drove banks to impose fees on things like previously free checking accounts, fees that made it harder for the poor to enjoy basic banking services (government intrusions that she supported), Warren suggests now that we use the Post Office to supply banking services for the poor.
         Yes, the Post Office.
         Because the Post Office is about 5 billion dollars in the red, it needs more revenue.  It can get that revenue, Warren insists, by providing checking accounts, small loans, and other banking services for the poor.  What has package delivery got to do with banking, you ask?  Nothing, like I said.  But staggering disconnects don’t stop progressives.  They view non sequiturs not as obstacles but as challenges.   
         A moment’s reflection raises even more questions.  For example, if the Post Office makes small loans to the poor, and if the poor have, because of their poverty, little or no collateral by which to secure their loans, how can the Post Office make smart loans and avoid losses if they must loan to folks who are greater loan risks?   And which postal letter carriers are trained to assess loan risk and have the time to track down delinquent borrowers?  And if your mail isn’t delivered one or more days per week because postal service talent has been redirected into checking accounts and ATM cards, will you be OK with it?  And if, instead of redirecting letter carriers into banking, the Post Office has to recruit and then hire (1) trained and experienced loan officers, (2) checking and savings account counselors, and (3) ATM gurus, and if they need desks, chairs, phones, and electronic equipment to do the job well, how will the Post Office pay for it all and where will they house it?
         Don’t ask those questions because, after all, it’s for a good cause -- the poor.  You’re not against the poor are you?  You aren’t one of those hateful, selfish Republicans who’d rather get mail than help the poor with Christmas Club savings, are you?  You aren’t a shameless one percenter, are you?
         Here’s another question not to ask:  don’t ask a progressive for objective historical indicators that turning post offices into banks has actually raised the poor.  They’ll just look at you in quizzical disbelief.  Why are you asking questions, they’ll wonder.  Can’t you see that they care?
         I am compelled to state the obvious:  There is no idea so ridiculous and so disconnected from reality that some progressive somewhere won’t propose it as a legislative breakthrough and excoriate you as a heartless bigot for opposing it.  Progressives are so twisted and warped that prudence looks to them like hatred.  I haven't heard such nonsense since somebody suggested we task NASA with Islamic relations.  So we did, on the basis that if we could put a man on the moon in less than a decade, our astrophysicists can turn al Qaeda into pacifists.  
         I am not impressed by the bold and unembarrassed ignorance of the progressives.  I deride it.  My response to combining the Post Office with small banking is found by combining the two delivery services mentioned above:  FedUps.

Saturday, February 1, 2014

MyRA: The Ugly Truth

        When I want to know what will happen in the wake of a particular piece of legislation, I don’t listen to those who proposed it or who voted for it.  That just tells me what they want me to think.  I don’t let them tell me what to think.  Neither should you.
         When I want to know what will happen with a particular piece of legislation, I don’t bother with the stated intentions of those who proposed it or who voted for it.  Good legislative analysis is not rooted in good intentions.  I don’t care a whit about their stated intentions; that’s just acting; that’s just a pose.  I care about results.  I look at what actually has been done in the past with legislation of this sort.  History, not histrionics, tells the tale.
         When I want to know what will happen with a particular piece of legislation, I don’t even read it.  The executive branch, the legislative branch, and the judicial branch do not think themselves constrained by mere words.  They are not led around by legislative language.  They lead legislative language around.  (Hint:  remember John Roberts.  He is the Chief Justice.  He can change laws by judicial fiat in order to make them Constitutional in ways he sees fit.  Remember Barack Obama.  He thinks the three branches of government are himself, his pen, and his phone.)  No, those folks aren’t constrained by language.  They make language do whatever they wish, and have done so for decades.   You remember:  “It all depends on what the meaning of “is” is.So, why should I feel constrained by legislative words when no one else does?  I don’t care what it says.  I care what they’ve done with similar language and legislation in the past.  I read them, not the text.  We do not live under the rule of law but of law twisters.
         This is not cynicism; it’s realism.  Actually, it’s both.  Cynicism is where realism leads.
         So now, MyRA:          
         MyRA is the worst political idea I've heard in many years.  It's government applying the alleged pseudo-wisdom behind Obamacare to your retirement:
         "Like your IRA? You can keep it.  Like your investment counselor, you can keep him.  Period."
         Sounds familiar, right?  You already know the words and intonations by heart.  You can play them over and over at will in your head.  You already know the rule of thumb -- the government makes promises and does not keep them.  It works like this:  When you lie to Congress, it’s a crime.  When Congress (and the president) lies to you, it’s politics.  Get it?
         So, how did they talk and what did they do the last time they tried to manage our retirement, with Social Security?  They argued that everyone needed to be secure.  They would supply the security.  They said that folks couldn’t be trusted to save money for their own retirement.  They said that individuals and their families could not be trusted to make their own way through life.  They said we all needed government to do it for us.   They’d take money out of our paychecks and save it for us.  They’d keep it securely in a lockbox so that when we needed it, it would be there.  And we were comforted.
         Then somebody picked the lock.  Like crooks, like thieves in the night, somebody snuck into your lockbox, took all your money, and spent it on their favorite political items.  Shockingly, the “somebody” who stole and spent all your locked up retirement money turned out to be the same government folks who said they’d lock your money away.  They did.  They locked it away from you.  They spent it.  But they left you a chit, an IOU.  No, really, they did.  There really are paper chits promising to pay.   Really.  It’s guaranteed.  How do I know?  The government said so.  The crooks promised.  They left a chit.  You doubt a chit?
         The money they swiped went for all sorts of keen projects, like shovel ready jobs that either didn’t exist or were not needed; shovel ready jobs for which there were no shovels and no jobs.  We can only hope, even while we deeply doubt, that they got your money’s worth.
         But you’ve got a chit.  Be happy.         
         Do not ask yourself this troubling question:  If they are trying again to fix my retirement, then doesn’t it mean that they failed to fix it last time?
         Yes, that’s exactly what it means.
         And don’t ask yourself this question:  How well did the government do wiping out poverty when it declared a war on it?  If you do ask that question, here’s your answer:  They lost.  They’ll do as well wiping out your poverty in the future as they did wiping out poverty in the past.  Look at Detroit and see your retirement’s urban metaphor. 
         Regarding MyRA, I’m telling you this:  Pay no attention to what they say or write.  It’s all part of the ploy.  “We’re the government.  We’re here to help you.  We’ll take your money and we’ll manage it for you, or else we’ll pick someone to do it for us.  We’ll make sure that we reduce the risk of loss for you.  Trust us; don’t trust market volatility.  We’ll guarantee results.  We’re the government.”
         So, what sorts of companies does the government invest in?  To date, they’ve invested in at least 34 green energy companies, 17 of which have already gone bankrupt, despite the enormous influx of government, i.e. taxpayer, money:  Evergreen Solar (25 million dollar loss), Solyndra (535 million, or a million dollar loss for every Senator and Representative in Congress), Sun Power (1.2 billion), Fisker (529 million), and A123 Systems (279 million), just to name a few.  With genius investments of that sort, you can forget about Charles Schwab or Edward Jones.  You don’t need them.  You’ve got an ideologically deranged community organizer making your investment decisions.  You’ve got the government, and you’ve got those companies they will pick to handle investments.  Who will they pick?  Probably those companies like AIG, into which Washington already has its hands deeply plunged, companies so bad at investment and foresight that they had to be bailed out, and who owe their life to government.  They will play along.  I haven't seen hands that deeply involved since I witnessed a heat transplant.  The government's hand-picked lackeys will direct your money wherever the politicos desire.  Don’t worry.
         Even though government bureaucrats are human beings, and even though human beings are creatures of incentive, don’t bother yourself to think about the incentives this program entails.  Ignore this:  With private investment companies, the incentive is for you to stay alive and stay invested.  They get their money when you stay invested year after year.  When you die and your money is withdrawn, their profit dies.  With government-run programs, however, their incentive is for you to die sooner so they can keep your money.  They can’t give it back to you because it’s already spent.  If they give you money at all, it’ll come from one of two sources, both bad:  (1) higher taxes, which means you pay you to replace the money government confiscated and spent, or (2) inflated money, the value of which has been drained by fiat dollars, which they are printing 24/7.  Inflated money is also a tax.  It’s the unspoken tax that shrinks every one of your dollars every moment of every day.  And if the money itself doesn’t materialize, they will give you a chit.  But if they don’t really want to give you either money or a chit because you are a Tea Party constitutionalist, they won’t pay.  Either they’ll sick the IRS on you and make you pay, or (because they control health care) they have the means to their desired end, which is not paying you by removing you from the scene, once you get old and more expensive.  Even when you die, your beneficiaries will not get all your money, much of which will be eaten up in various taxes and fees.  Remember, there’s even a death tax.  Dying isn’t free.  Dying won’t free you from Uncle Sam’s long arms.
         Even after you die, they’ll have lots of pet projects to fund and an unsustainable debt to pay off or to service with your cash.  Even dead, you will do the paying and the servicing.  OK, forget about paying off the debt.  They don’t really intend to pay it off.  All they intend is for you to cash in your chips.  And if you think government doesn’t kill its own citizens by the hundreds of millions, you’ve got a reading assignment:  R. J. Rummel’s Death by Government.
         Government will sell this bill of goods to you by convincing you that the market is too volatile to be trusted.  But if your investments are doing really well without the government, they know you won’t believe them and won’t want to give them your money, which, to them, is a problem.  In a prosperous market place, what’s an Alinskyite like Obama and his ilk to do?
         Create a crisis, that’s what, a really big one, which they determine will not go to waste.  If you think government doesn’t create financial crises and make them worse, you have another reading assignment:  John Taylor’s Getting off Track:  How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis.   In the wake of the government’s manufactured crisis, they’ll promise to protect you against losses, against the evil wiles of the greedy fat cats on Wall Street, the notorious 1%, whom they will blame for what went wrong.  Once enough folks are sufficiently scared that they agree to participate in the government program, government will move forward.  “Forward” means that what was sold as voluntary will be managed as required.  You will participate because you must.  You will give your money over, one way or another.
         They’ll guarantee good results, even if they can’t guarantee to put up a working website.  They’ll protect you.  They’ll make so it’s always a bull market.  And if they fail, they’ll give you a chit.   Bull chit.