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Unleash Prosperity Hotline
Issue #1190
01/28/2025
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1) Trump Should Tell Postmaster General Louis DeJoy: You're Fired

Why does Louis DeJoy still have a job? He was hired as a turnaround expert, but instead he's turned USPS into a perpetual raider of the taxpayer piggy bank, while he gets further captured by the agency he was supposed to reform.

Since he took over at the helm, USPS has received $120 billion in taxpayer handouts via the Inflation Reduction Act and other Biden debt bomb giveaways.

In his latest act of almost criminal financial negligence, instead of culling the herd of union workers, DeJoy last year converted 125,000 part time USPS employees to full-timers with full benefits - much to the delight of the postal union. USPS already faces an unfunded pension liability of $98 billion. Take two guesses on who's going to pay off that debt.

DeJoy promised as part of a recent 10-year bailout plan, USPS would break even in 2023 and run a $1.7 billion SURPLUS in 2024. Instead, USPS lost $6.5 billion in 2023, and $9.5 billion in 2024. Whoops!

USPS claims it made $12 billion last year on packages – by attributing zero of its overhead costs to that service line. It's a shell game.

Why do we need USPS to be losing taxpayer money to compete with FedEx, UPS, and other private package services that provide overnight delivery with a 95% on time record?

DeJoy needs to go - and right away!

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2) Rohit Chopra Needs to Go, Too

One of the most puzzling not-yet-fired Biden regulators is Rohit Chopra, the hyper-regulatory director of the Consumer Financial Protection Bureau.

Trump had to contend with a liberal CFPB director for much of his first term when Richard Cordray refused to resign, but ultimately the Supreme Court ruled: "The CFPB Director... must be removable by the President at will."

So what's taking Trump so long this time?

Our friends at the WSJ editorial page explained how Chopra's new lawsuit against Zelle is an object lesson in why he needs to go, ASAP:

We're told Rohit Chopra is trying to persuade the Trump team to retain him as director of the Consumer Financial Protection Bureau. Elizabeth Warren would love nothing more as she made clear this week by praising her acolyte's new and dubious lawsuit against the peer-to-peer payment app Zelle.

The CFPB sued Zelle and its bank owners last month for not doing enough to stop fraud. There's no doubt consumer scams are multiplying as criminals exploit technology such as artificial intelligence, and law enforcement has struggled to keep up. But Mr. Chopra wants to make banks reimburse swindled customers...

This will encourage more fraud. Customers will be less circumspect if they know banks are on the hook if they get conned. Scam artists could also exploit Mr. Chopra's diktat by falsely claiming they were conned. Banks could have to reimburse the criminals.

The lawsuit follows a new CFPB rule that requires banks to share customer data with third parties upon a customer's request. As we reported ("Jamie Dimon vs. Rohit Chopra"), the rule would let scammers initiate payments from customer accounts. Mr. Chopra's Zelle lawsuit seeks to force banks to reimburse customers for fraud that will result from his own rule.

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3) Trump Should Embrace a 15% Solution

We're free traders, but also intrigued by Trump's concept of taxing the consumption of imports more and taxing things made in places like Michigan, Maine and Maryland less. This would mean a 15% income tax in exchange for, say, a 15% tariff.

UP cofounders Steve Forbes and Stephen Moore argued for a 15% flat tax in the WSJ recently ([link removed]) , but maybe the concept could be combined with Trump's tariff idea. Tax everything at 15% - including wages and salaries, business income, capital gains, inheritances, dividends, and all imports.

The two charts below show that the American tax system is WAY too dependent on wage and income taxes - which discourage work and investment. Income/payroll taxes account for about 70% of federal revenues while tariffs and duties are closer to 2%. Most other nations gather a much higher share of their revenues via a VAT/tariff on American goods with a rate that can go as high as 20% to 25%.

The 15% tariff, combined with sharply cutting income tax rates to 15% could be pro-growth and achieve Trump's goal of trade reciprocity.

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4) Tears for Fears

Oh, the horrors of being an overpaid and sanctimonious federal worker in the new era of Trump. This, from a New York Times front page headline a few days ago:

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At the Department of Labor, staff members watched a colleague who had been recently hired to a civil service position be escorted out because she was a former political appointee. One employee said her manager required her to scrub the website not only of the words "diversity, equity and inclusion," as the executive order required, but also of references to "underserved" and "marginalized communities." Afterward, she said, she went into a closet, called her mother and wept.

On Tuesday morning, Moriah Lee, an analyst at NASA, joined a virtual town hall to learn what all the orders would mean for her small team, which monitors and audits projects in the space program. The acting supervisors, people she had known personally for years, made it clear to everyone that they were not inclined to show flexibility, she said.

Gone was the weekly speaker series that had been organized under the diversity program, which had brought in deaf people, combat veterans and others to share their experiences. Gone was her ability to live in Nashville and go twice a month to an office two hours away in Huntsville, Ala.

And then this tear-jerker from the leftist Daily Kos which rages: "there's a hostile takeover of the federal civil service":

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I've been an OPM employee for nearly a decade and a Federal Employee for almost 20 years. I've never witnessed anything even remotely close to what's happening right now. In short, there's a hostile takeover of the federal civil service.

The very backbone of American Government, the HR of all HR in the U.S. Government has been taken over by outside politicals. In just five days, they managed to push aside dozens of non-political, career civil servants who were there specifically to prevent the civil service from becoming the President's henchmen...

The non-political civil servants here at OPM are watching helplessly as our government is being systematically dismantled bit by bit. Even the IGs are being fired to prevent them from investigating the numerous whistleblower complaints we've filed.

What is so deceptive about this claim that Trump is "politicizing the civil service system" is that there is perhaps no institution in America that is more politicized (other than The New York Times newsroom) than the federal bureaucracy. Remember, 92.5% of the vote in DC went to Kamala in November.
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5) Germany Is Broken

Wolfgang Münchau, the editor of the Eurointelligence newsletter, reports that this campaign is different because at least one party leader - Friedrich Merz of the Christian Democrats - is actually saying that the German economic model is broken and needs dramatic reform and pro-growth policies.

Specifically, Münchau explains, European anti-tech laws are crushing economic growth:

The fact that Germany, and other European countries, are failing to exploit their data is one of the deep causes behind this current, historically unusual, economic slump.

Europeans are protecting individuals from abuse of their data by companies.

Whereas the Americans are protecting the companies from outside hackers, but maintain a much lighter data protection regime. The Europeans thought they can force their general data protection regime onto the rest of the world.

The reality is that it is becoming unsustainable for Europe itself. Implemented in 2018, (the EU's data law) was the beginning of a long series of anti-tech laws that is leaving Europe stuck in the digital dark ages.
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6) Trust the Science!

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