Imagine a business losing $1B a month. Its brand name is well known by consumers, but associated with bureaucratic inertia and occasional acts of workplace homicide. Management has a scheme to massively cut costs and modestly raise prices that, with luck, may return the company to break even five years from now.
Would you like to own a share of this outfit? Too late. You already do.
The inevitable, if not imminent, demise of the US Postal Service is one of the recurring themes here at BMA. Aside from affording me the opportunity to poke fun at Washington, and make predictions that are safely in far off in the future, I keep returning to the topic because it is an example of one of the core ideas of this blog, that vague and wishful thinking is no match for the reality of dollars and cents.
The Post Office is in serious trouble. If it were a normal corporation with private creditors it would almost certainly be in Chapter 11 by now. Deficits are large and getting larger. The top line is shrinking quickly.
Mail volumes are down 23% since 2007. And that decline is part of a long term trend, not some short-term effect of the Great Recession. Overall volumes peaked in 2006, but first class mail, which is is the real money maker for the USPS, peaked in 1999.
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As I have written several times in the past (e.g. here and here) there seems to be no subject on which I am more out of step with normal folks than those plastic cards, credit and debit, that we all use to buy stuff.
In the past I have politely implied that this is a failing of mine, that I am just too old or too dense to understand what everybody else does. I hope nobody was fooled by that. I really think I may be the last person in America who can think clearly about plastic.
A few weeks ago, SmartMoney ran a round-up of the best credit card deals. The listing of best offers for the various categories of credit cards was fine, but the introductory gloss managed to encapsulate just about all the craziness (and I do mean craziness) that clouds thinking about cards in America.
… credit cards have lately emerged as the surprise champs, offering fewer fees and better rewards than the typical debit card.
Surprise to who? As far as I know, credit cards, in general, have always had lower fees and better rewards than debit.
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I should probably come clean right at the start of this and admit that I have a thing about energy saving light bulbs. You might call it a pet peeve. What bothers me about them is not that they give off light of a slightly different hue than I am used to. Nor do I have any reason to believe that they do not use less energy, as advertized.
What drives me up the wall is the pious focus on them as a great green savings of energy and/or money. A focus which some years ago resulted in the federal government actually banning the old-fashioned Edison bulb.
Do not get me wrong. I agree that switching to energy saving bulbs will save energy. My point is that it will save only a tiny amount of energy. An amount that really only works as a symbolic act, and symbolism is in the eye of the beholder. What some may see as a visible sign that we love the planet is for me a sign we are governed by innumerate twits. I am here referring to both our politicians and the citizens who elect them.
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Normally, this is the time of year that money advisors and gurus trot out the old canned advice on end-of-year tax planning. Not this year. This year we are all just too confused.
Generally, we can do little things in November and December to slightly lower our tax bill because, generally, we can predict what the tax rates will be in January. Not this time. Congress managed to adjourn for the elections without doing anything at all about the expiring Bush tax cuts, and when they reconvene for the lamest of lame duck sessions today I do not foresee a sudden clarity of purpose.
Could there have been any larger indication that the Democrats were in very serious trouble than that they passed up an opportunity to enact tax cuts a few weeks before an election? Yes, there were (and are) differences of opinion on what bits of the Bush cuts should be extended, but those differences ought to have been bridgeable. Instead, the Democrats became frozen in fear and indecision, petrified (and not entirely without reason) that any legislation they passed, whatever the particulars, would cost votes.
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As election day approaches, I thought this would a good time to discuss a bloated federal program that wastes taxpayer dollars, annoys the citizenry, and uses up our precious natural resources. I am talking about the minting of coins.
I was reminded of this continuing national tragedy by a post at The Consumerist about a brave grass-roots effort to address this issue. Apparently, there is Dunkin Donuts shop somewhere (for obvious reasons of safety its location was not disclosed) that now rounds all purchases to the nearest nickel. If a customer for some reason actually wants the pennies (the mind boggles) the shop will provide them.
I think this is an excellent first step and one that I hope more courageous shop managers will employ. I am sure this must be a violation of federal law (why else has it taken so long?) but if all stores do it the feds will be overwhelmed. I think the Secret Service must be in charge of enforcing the penny laws.
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