Elizabeth Warren wants to turn Post Office into a bank (2 Viewers)

[fatguyinalittlecoat]

Here's where I think I am with this... I find the payday loan and check cashing places to be somewhat morally repugnant. However, I don't really want the government legislating them out of business on the basis of my morality. Similarly, I find Rent-A-Center and its ilk to be just as slimy and morally objectionable, but I wouldn't want the government legislating them out of business either. Philosophically, I also don't like the idea of the government (especially the federal government) competing against those businesses solely on the basis of morality.

For that reason, the idea above re: post offices leasing kiosk or similar space to private businesses appeals to me. However, as the above post notes, I'm not sure what problem that solves. I wouldn't think that simply changing the location of check cashing businesses (from wherever they are now to inside a post office) is going to significantly alter the costs and practices of these businesses.

All that said, I'd like a reason other than morality to support the original idea. Is there one?

Is "morality" different from "helping poor people"? I think I'm confused.

It is different to me in this context, yes. For example, food stamps should probably be considered "helping poor people", and we have that program in place specifically to help poor people, not to prevent unscrupulous "insert food stamp business here" from preying upon the poor. I'm suggesting that "punishing/preventing unscrupulous check cashing businesses from preying on the poor" isn't enough of a reason for me to support this policy.

Intuitively, I like the suggestion, but I feel like the reason it appeals to me is emotion based simply because I want to punish what I consider to be sleazy check cashing businesses. For the same reason as "ick" isn't a good reason to support bans on gay rights, "ick, sleazy" isn't a good reason to support a policy of increasing government responsibility and power.

"Helping poor people" is an entirely different reason to me. To support it, I'd at least want to know the following: 1) can government provide these services more efficiently (i.e. cheaper to the consumer), and 2) while adhering to #1, can the government provide these services in a deficit neutral fashion. Also, I'd want to ensure that government would play by the same rules as the private providers. Even then, I'm not certain this is really the proper role of government, which is why the idea of simply leasing space within the post office to private providers appeals to me.

Any time the government provides a service, it hurts the ability of some private company to provide that same service. Some stuff is too important to leave purely to private industry.

 

[SacramentoBob]

Here's where I think I am with this... I find the payday loan and check cashing places to be somewhat morally repugnant. However, I don't really want the government legislating them out of business on the basis of my morality. Similarly, I find Rent-A-Center and its ilk to be just as slimy and morally objectionable, but I wouldn't want the government legislating them out of business either. Philosophically, I also don't like the idea of the government (especially the federal government) competing against those businesses solely on the basis of morality.

For that reason, the idea above re: post offices leasing kiosk or similar space to private businesses appeals to me. However, as the above post notes, I'm not sure what problem that solves. I wouldn't think that simply changing the location of check cashing businesses (from wherever they are now to inside a post office) is going to significantly alter the costs and practices of these businesses.

All that said, I'd like a reason other than morality to support the original idea. Is there one?

Is "morality" different from "helping poor people"? I think I'm confused.

It is different to me in this context, yes. For example, food stamps should probably be considered "helping poor people", and we have that program in place specifically to help poor people, not to prevent unscrupulous "insert food stamp business here" from preying upon the poor. I'm suggesting that "punishing/preventing unscrupulous check cashing businesses from preying on the poor" isn't enough of a reason for me to support this policy.

Intuitively, I like the suggestion, but I feel like the reason it appeals to me is emotion based simply because I want to punish what I consider to be sleazy check cashing businesses. For the same reason as "ick" isn't a good reason to support bans on gay rights, "ick, sleazy" isn't a good reason to support a policy of increasing government responsibility and power.

"Helping poor people" is an entirely different reason to me. To support it, I'd at least want to know the following: 1) can government provide these services more efficiently (i.e. cheaper to the consumer), and 2) while adhering to #1, can the government provide these services in a deficit neutral fashion. Also, I'd want to ensure that government would play by the same rules as the private providers. Even then, I'm not certain this is really the proper role of government, which is why the idea of simply leasing space within the post office to private providers appeals to me.

Any time the government provides a service, it hurts the ability of some private company to provide that same service. Some stuff is too important to leave purely to private industry.

Where exactly were "payday loans" on the important list?

 

[fatguyinalittlecoat]

How about...

We're off on a tangent where we discuss whether it would be good policy to allow the Post Office to serve in a "Western Union" capacity, regardless of what the actual suggestion in the OP says?

To be honest, I like that discussion better than whether the Post Office should be an actual bank. Turning it into a bank with deposit accounts seems considerably more fraught with issues.

Yeah, well part of the problem is that the OP is just a quote from an article discussing an Elizabeth Warren op-ed which derives from a Postal Service OIG White Paper. I don't think it's really a tangent to discuss stuff that's in the White Paper but didn't make it into the few paragraphs of the OP.

 

[Slapdash]

If they were profitable customers, banks would take their business. Banks aren't in the habit of turning down profit.

Sure they are when it hurts margins.

 

[fatguyinalittlecoat]

Here's where I think I am with this... I find the payday loan and check cashing places to be somewhat morally repugnant. However, I don't really want the government legislating them out of business on the basis of my morality. Similarly, I find Rent-A-Center and its ilk to be just as slimy and morally objectionable, but I wouldn't want the government legislating them out of business either. Philosophically, I also don't like the idea of the government (especially the federal government) competing against those businesses solely on the basis of morality.

For that reason, the idea above re: post offices leasing kiosk or similar space to private businesses appeals to me. However, as the above post notes, I'm not sure what problem that solves. I wouldn't think that simply changing the location of check cashing businesses (from wherever they are now to inside a post office) is going to significantly alter the costs and practices of these businesses.

All that said, I'd like a reason other than morality to support the original idea. Is there one?

Is "morality" different from "helping poor people"? I think I'm confused.

It is different to me in this context, yes. For example, food stamps should probably be considered "helping poor people", and we have that program in place specifically to help poor people, not to prevent unscrupulous "insert food stamp business here" from preying upon the poor. I'm suggesting that "punishing/preventing unscrupulous check cashing businesses from preying on the poor" isn't enough of a reason for me to support this policy.

Intuitively, I like the suggestion, but I feel like the reason it appeals to me is emotion based simply because I want to punish what I consider to be sleazy check cashing businesses. For the same reason as "ick" isn't a good reason to support bans on gay rights, "ick, sleazy" isn't a good reason to support a policy of increasing government responsibility and power.

"Helping poor people" is an entirely different reason to me. To support it, I'd at least want to know the following: 1) can government provide these services more efficiently (i.e. cheaper to the consumer), and 2) while adhering to #1, can the government provide these services in a deficit neutral fashion. Also, I'd want to ensure that government would play by the same rules as the private providers. Even then, I'm not certain this is really the proper role of government, which is why the idea of simply leasing space within the post office to private providers appeals to me.

Any time the government provides a service, it hurts the ability of some private company to provide that same service. Some stuff is too important to leave purely to private industry.

Where exactly were "payday loans" on the important list?

I don't have the whole list tabulated yet.

 

[Slapdash]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So the govt legislated away the ability for banks to provide these services so they could could complain these services didn't exist and offer them itself. No conflicts there.

I don't think Warren's idea is for the USPS to start charging $40 overdraft fees per transaction.

 

[Slapdash]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So then it's a moral issue? Financially, how is it a good idea to have them take on these customers that banks won't because they can't make money on them?

What are you referring to?

I'm trying to follow your reasoning. If banks don't want to take these customers on because they aren't profitable, why would they be profitable for the USPS?

They are not unprofitable, just less profitable than normal customers particularly when banks have to lend to them under the CRA. Banks have insanely high profit margins.

Still not following. Don't see why banks would turn down profits, or how the USPS (with negative profit margins) would be a more efficient way of handling these customers.

Basically, it seems this is being portrayed as a "win/win", which I don't really think adds up.

Not every company has the same regulatory constraints as banks that are backed by the government. Regulations that make taking deposits from the poor yield less do not apply to other companies.

The USPS is not going to be taking these customers from banks.

 

[Koya]

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

'Tis true. Unions, in concert with local government, have blockaded many of these neighborhoods from getting larger (Walmart, etc.) stores. Particularly in the northeast, like DC and NYC.

That's a very minor part of the reason. The Grocer / Foodmarket / Supermarket industry is exceptionally competitive, with razor thin margins. The reality is the demographics of many / most poor areas simply do not meet the thresholds for certain chains / brands, resulting in less competition and lesser companies that end up setting up shop and/or good companies that specialize in a more urban product (or geared toward a more poor population), which results in slightly higher margins for them (higher prices) and more off brands (less selection, worse food - and forget about produce and meats).

To blame this on unions and local gov't is, imo, misguided. It's the market that dictates far more than anything else.

 

[SacramentoBob]

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

'Tis true. Unions, in concert with local government, have blockaded many of these neighborhoods from getting larger (Walmart, etc.) stores. Particularly in the northeast, like DC and NYC.

That's a very minor part of the reason. The Grocer / Foodmarket / Supermarket industry is exceptionally competitive, with razor thin margins. The reality is the demographics of many / most poor areas simply do not meet the thresholds for certain chains / brands, resulting in less competition and lesser companies that end up setting up shop and/or good companies that specialize in a more urban product (or geared toward a more poor population), which results in slightly higher margins for them (higher prices) and more off brands (less selection, worse food - and forget about produce and meats).

To blame this on unions and local gov't is, imo, misguided. It's the market that dictates far more than anything else.

What about when unions actively campaign to keep places like Walmart out? Walmart would bring a better quality of product at a cheaper price, relatively speaking, so the unions seem more concerned with a political win than actually helping the poor people get access to good food.

 

[Koya]

Anytime I buy food in poor areas, it's more expensive and lower quality than what I get elsewhere.

'Tis true. Unions, in concert with local government, have blockaded many of these neighborhoods from getting larger (Walmart, etc.) stores. Particularly in the northeast, like DC and NYC.

That's a very minor part of the reason. The Grocer / Foodmarket / Supermarket industry is exceptionally competitive, with razor thin margins. The reality is the demographics of many / most poor areas simply do not meet the thresholds for certain chains / brands, resulting in less competition and lesser companies that end up setting up shop and/or good companies that specialize in a more urban product (or geared toward a more poor population), which results in slightly higher margins for them (higher prices) and more off brands (less selection, worse food - and forget about produce and meats).

To blame this on unions and local gov't is, imo, misguided. It's the market that dictates far more than anything else.

What about when unions actively campaign to keep places like Walmart out? Walmart would bring a better quality of product at a cheaper price, relatively speaking, so the unions seem more concerned with a political win than actually helping the poor people get access to good food.

I think that's the exception rather than the rule, at least for poor areas, and moreso for poor, urban areas. These fights certainly happen, but I don't believe its the reason that Walmart etc. is not located in the more economically distressed locations, but moreso in poor middle class or middle class areas where such protests seem to occur, and especially in "more well to do" places that don't want the big box nor the competition for local (and/or politically connected but larger) outlets.

 

[humpback]

Banks aren't failing to reach poor people because of a real estate problem. They can get real estate cheaper than anyone else can. The problem is the payroll costs of manning the real estate.

I'd say the real problem here is that banks do not want to take deposits from people that they cannot (or will not) sell loans to. Particularly since the government has regulated away many of the fees that banks used to make money off of poor customers.

So then it's a moral issue? Financially, how is it a good idea to have them take on these customers that banks won't because they can't make money on them?

What are you referring to?

I'm trying to follow your reasoning. If banks don't want to take these customers on because they aren't profitable, why would they be profitable for the USPS?

They are not unprofitable, just less profitable than normal customers particularly when banks have to lend to them under the CRA. Banks have insanely high profit margins.

Still not following. Don't see why banks would turn down profits, or how the USPS (with negative profit margins) would be a more efficient way of handling these customers.

Basically, it seems this is being portrayed as a "win/win", which I don't really think adds up.

The marginal cost for a bank to serve the poor might well be higher than that of the post office, given that one of the issues the post office has is not enough business.

It might be, but it also might be lower (more likely IMO).