Your bad idea of the day

One of the possible benefits of living during crisis times is that, out of desperation, policy ideas previously thought to be out of bounds are given serious consideration.  One of the definite problems with this kind of environment is that there are some seriously dumb-ass ideas out there that are now going to soak up a lot of attention.  For Exhibit A, I give you Michael Lind's op-ed in today's New York Times:  America's financial landscape is changing before our eyes. The absorption of major Wall Street investment banks by commercial banks threatens to create colossal universal banks that are too big to fail and might need to be bailed out in the future. Meanwhile, the structure of public and private finance in the United States chronically fails to address four problems: the almost 10 percent of Americans without a bank account; the concerns of all Americans about the security of their savings; the growing indebtedness of the country to foreign governments and financial institutions; and underinvestment in public assets like sewer systems and bridges. These four problems may seem unrelated. But they can be addressed in the United States, as they have been in similar countries, by a single institution that is at once new and old: the postal savings bank. To be fair to Lind, if there was any moment when a postal savings bank might make sense, now would be the time.  In a world where commecial banks seem to be going insolvent by the second, an government-run account that promises low but guaranteed rates of return seems attractive.  The thing is, FDIC guarantees render postal savings accounts superfluous, so I'm not sure how much additional savings such accounts would create (Lind suggests that it would encourage savings among immigrants, but I don't see how the post office is going to build more trust than banks on this score).  The big problem, however, is what happens when the government gets their hands on the money.  Lind gets a bit cutesy at this point:  Japan’s postal savings bank, privatized during the heyday of market fundamentalism a few years ago, was criticized because it encouraged too much saving and too much investment in infrastructure. If only the United States had such problems!  Yes, this is funny, except that Japan during the nineties did save too much and the government engaged in infrastructure project* that served no purpose other than to provide a fiscal stimulus.  The result was a lost decade of growth and large amounts of misdirected investment.  How many bridges to nowhere would be built through Lind's plan?  I'm not unsympathetic to the idea of greater infrastructure investment.  A postal savings plan, however, strikes me as a really ill-suited way of going about it.