Going Postal

I've got nothing against postal workers. But I do have a bone to pick with their union (American Postal Workers Union, "APWU"). Have you seen the APWU ads on TV and print lately? I think the ads are a lie.

The background is that as many as 3,700 post offices are going to be closed. The union hates that. The union is spending big bucks on a slick ad campaign in an effort to stave off the inevitable.

APWU President Cliff Guffey had this to say recently:

“We must dispel the persistent myth that our work is funded by taxpayers.”

The ads show happy postal workers and all that mail they drive around. The heart of the UPWU message is:









By what magic does the PO do all that good stuff they do without sucking at the taxpayer teat? Easy. They borrow billions at near zero interest rates from good old Tim Geithner. Tim is responsible for the Federal Financing Bank. This is an off balance sheet funding vehicle (“SPIV”). Take a look at the balance sheet as of June 30, 2011.




So the PO has wracked up 12 large. What's the Vig on this? Nothing! The debt is being rolled over at less than 20 basis points.



This is a perfect example of what is wrong with America. When faced with a problem what do we do?


The PO issue is small potatoes. But in a much bigger way all of D.C. is following the lead of the PO. Steps I through V are being played out as I write. It may take a few days for the markets to figure this out. But they will.