The role of the President is to manage the federal government. To administer it completely and make darned sure it can do what the Constitution & subsequent laws intend it to do — that’s what we elect Presidents for. Among other things, this means making sure our troops’ paychecks are produced & distributed, Park Rangers are hired and given the supplies to do their jobs, and making sure the Post Office is adequately staffed to meet anticipated volume.
Failing to react to expected upticks in volume at the Post Office is Administration mismanagement. This November tens of thousands of citizens will opt to vote-by-mail for the first time. The USPS needs requisite staff & tools to try to meet the challenge — that’s their job. The President should direct his Postmaster General to quickly identify those needs & pursue funding from Congress.
President Trump, however, refuses to take the steps necessary to ensure our Postal Service can handle the increase in mail volume due to mail-in ballots in the November election. He refuses, once again, to take any responsibility or to do his job. In fact, he has placed one of his lackeys (who payed dearly in campaign contributions to be considered for the privilege) in charge of the Postal Service specifically to ensure that mail delivery efficiency decreases.
Is it incompetence alone that has led President Trump to make these decisions? No, he is guided by a diabolical political calculus. This calculation figures that voters who do not support him will be unwilling to vote in person because of the fear of contracting COVID19 & inadequate voting capacity in their communities.
Over the
weekend, the Fed cut the prime rate to 0.0 – 0.25%.[1] Virtually nothing. Consumers cannot get that rate. Businesses can’t get that rate. It is offered only to the banking industry.
That’s OK. Banks have decades of experience in validating credit risks & making decisions about who to loan money to.[2] Additionally, banks often create & maintain relationships with their corporate & consumer-level customers. One of the tenets of good management is to assign a task to the person with the skill, passion, and ability to accomplish the task. The Congress & the President should consider tasking the Banking industry to help provide financial relief.
We have
decided that consumers and businesses could use a shot in the arm during the
COVID-related financial crisis. It is
clear that many corporations wantonly redistributed their tax windfall two
years ago and are unprepared for the significant financial disruption caused by
the pandemic. A handout to these
companies – or entire industries – often is tied to a raft of rules,
regulations, and complex legislative language.
To try to do that in a matter of days with any sort of quality is likely
impossible.
Two
possibilities are most likely in a rushed corporate bailout: (1) Rushed legislation results in
unanticipated side effects that are just as dangerous as the problem trying to
be solved or (2) industry lobbyists get unrelated concessions harmful to their
competitors or American taxpayers.
A
more reasonable and achievable option would be to direct banks to make more
loans at lower interest rates at record-breaking speed. They can do it. Their people are working from home and need
distraction from the neighbor’s dog’s incessant barking. Banks should be directed to invest at all
levels of the economy. Banks have
special privileges and responsibilities in the U.S. Criteria can be created by Congress and/or
regulators to incentivize such a response.
With proper oversight, some of which will have to be done in the rear
view mirror, direction can be provided to the banks; it would utilize those with the necessary
expertise to help alleviate the financial stress.
Obviously,
it’s a little more complicated than that.
Banks will want risk relief from the government. They shouldn’t get it –
they’ll get really cheap money instead and it will be up to them to use it
wisely. Banks that do a better job during
the pandemic and related financial crisis should get greater benefits and those
that fail to do so should not. If the
Fed rate weren’t already artificially low, they could get a lower rate. I am sure regulators can come up with both a
carrot and a stick to use with banks.
Bank regulators have a great deal of experience and talent in that.
Lastly, debt relief needs to be a part of the picture. Credit cards often carry “finance charges” of greater than 20%, all while they are getting virtually free money from the Fed. Reducing the interest rates on those charges and / or providing a finance charge holiday until the end of the crisis would make a big difference to thousands of consumers whose livelihood has been interrupted. Similar actions can be taken on business and consumer loans to help tide them over, as well.
[2] I
refuse to characterize their decisions as good given the Financial Crisis of
2008 & the Savings & Loan bailout a generation earlier. However, the fact remains that banks have
given out trillions of dollars in loans in the meantime and have real
experience in this regard that does not exist elsewhere.
