Postal Banking

Regarding the recent posts on the Privatizer General’s — I mean, Postmaster General’s — proposal for “postal banking:”

BEWARE – It’s not postal banking.

We used to have a real US Postal Savings System, which operated between 1911 and 1967. I had my first little interest-bearing savings account in it. We started in school with little cardboard books, which had places to insert and hold our pennies, nickels, dimes, and big quarters until we could deposit them at the post office. We needed to amass $5 to make a minimum deposit, which is was a big in the early 1960s, about $37-$39 in today’s inflation-adjusted dollars. We got a certificate of deposit in return, which the cardboard book also held for us. All this was part of our arithmetic and home economics lessons. The CD’s earned 2% interest, compounded annually, which was grist for our arithmetic problems. 2% sure sounds great today when many of the big banks are paying 0.01-0.05% on savings accounts and the highest rates, with a lot of conditions, pay 1% at best.

In junior high school I had to close that account and put my earnings from paper route, lawn mowing, lunch money change, coins found on the ground, etc. into a more expensive commercial bank that really didn’t want my little account anyway. I count the closure of the Postal Savings System as one of my radicalizing experiences. The fools running the country were losing the civil rights fight for fair housing and the war on poverty in a stupid war in Vietnam — and now they just shut down our postal bank!

We need a return of the Postal Savings System to serve 68 million unbanked people, a quarter of all households, who are ripped off by the predatory payday loans and high-fee prepaid cards and money transfers.

BUT – What the Postal Service is proposing is a public-private partnership (i.e., public pays for private profit) with the big commercial banks for NON-BANKING financial “services.” Now the corporate banksters (who have already mostly muscled out local gangsters in the loan sharking business in poor neighborhoods) will get more legitimacy (US government approved!) for their predatory financial “services.”

Greg Palast explains this story in these two articles:

Truth Out would not print these stories because they criticized their beloved Democrat savior, Elizabeth Warren, for her endorsement of this scam. So Palast resigned from writing for Truth Out. Good for him.

For a good discussion of the US Postal Savings System, see Chapter 13 in Preserving the People’s Post Office by Christopher Shaw, Foreword by Ralph Nader (Washington DC: Essential Books, 2006).

The US Postal Service is profitable if you subtract the prefunding of 75 years of future health insurance for postal workers (most not yet born!) in 10 years required by a 2006 act of Congress that was blatantly designed to destroy and privatize the postal service.

A recent column by Bernie Sanders gives the details and the current legislative picture. But in the last paragraph, Sanders falls for the postal service’s non-bank financial services scam.

Or did he? He published this piece in the Rupert Murdoch’s Wall Street Journal. He needs big bucks because he wants to run for president.

Barack Obama had the ultimate superficially progressive identity with which to implement Wall Street’s economic policies without provoking much protest, for which the financial oligarchy paid handsomely in campaign funding. (See Richard Wolff, “Barack Obama’s Economic Significance,”

Now who can our oligarchs find to play that role in 2016? Who better to legitimize the system and keep it basically unchanged than to back an “independent socialist” who over the years has increasingly limited his efforts to small ameliorative reforms rather than transformative structural reforms that expand political and economic democracy? Sanders opposes cuts to Social Security, supports a higher minimum wage, and proposes a carbon tax and fee program that is too low, too slow, and leaves the decision-making power in the hands of the energy oligopolies. It won’t avert climate catastrophe. This kind of program will satisfy liberals and the financial oligarchy can live with it as the price of maintaining the legitimacy of the system and their power in it.

Sanders professes not to know whether he should run as an independent or Democrat. (See John Nichols, “Bernie Sanders: ‘I Am Prepared to Run for President of the United States’,” The Nation, March 6, 2014.

If Sanders can’t make up his mind on the first principle of socialist politics — working class political independence — and can’t decipher the scam in the postal service’s non-banking financial services proposal, he should run as a Democrat. If it walks like a Democrat and talks like a Democrat, it’s a Democrat.

— Howie Hawkins