Thread by @usacsmret

Post Office Banking Is Another Crappy Socialist Idea That Already Failed thefederalist.com/2019/05/15/pos…

Karl Marx and Vladimir Lenin wrote about doing things that had never been tried before.Unfortunately, people eventually tried them. Socialists in the 21st century have an advantage their predecessors lacked: they can learn from the past and see which of these policies failed.

Those who accuse conservatives of an unreasonable attachment to tradition and history now harken to a mythic past and blind themselves to the many holes in their socialist story. Their movement has not had a new idea in a century.

That brings us back to postal banking, a moribund idea dusted off by the 29-year-old Bronx Bolshevik. It is a hoary idea from the high tide of American progressivism, one many on the left thought was a great innovation in 1911.

AOC’s contention that people need a “public option” was arguably true 100 years ago, but even then it was contentious. The law enacting it was extremely limited, capping interest rates at 2 percent and not allowing a customer’s account to exceed $500 (or about $13,000 today).

Moreover, the lion’s share of deposits accepted by the Postal Savings System was then redeposited in local banks. Another fact unmentioned by the Little Octobrist: these were just savings accounts; no checking, no lending, and none of the other services of banks.

It’s not unreasonable for an average American to want to opt out of that system. Localism is coming back in many sectors, and banking might be no different. Is this a way that postal banking could be of use to the ordinary citizen?

Alas, no. For one thing, moving your account from Wells Fargo to the U.S. Postal Service merely replaces one unaccountable bureaucracy with another. Do you think dealing with Citibank is hard? Try fighting with the Post Office.

The creaky old system that struggles to break even despite a monopoly on mail delivery would fare no better when given a new mandate in the banking sector.
The post office may have branches in nearly every town and city, but it is no more local than any federal bureaucracy.

For real localism, would-be depositors can look to community banks, just as they always have. They can also, with increasing ease, choose to bank at credit unions.

Ocasio-Cortez and Sanders are not looking for a new solution to a real problem, they’re looking for a new excuse to impose the old discredited solutions that their ideology demands.

Creating a “public option” in banking sounds good to incrementalists on the left for the same reason a “public option” in health care sounds good: it adds to the government’s power.

Consider how the public option in education works: many people can’t afford to pay property taxes and tuition to private school. The public option becomes the only option for all but the rich.

It is probably a good idea for regular folks to leave big banks for the local, responsive, privately run options of community banks or credit unions. That’s going to be a better fit for both parties, and it is an option brought about by choice within a free market.

Put government’s thumb on the scale and these other options will quickly disappear. Postal banking can either be the unattractive option that was put out of its misery in 1967 or, worse, made so attractive through the government’s deficit spending that it becomes the only option.

That might suit the socialists, but it’s a harmful scenario for everybody else.