Another crisis: the U.S. Postal Service

Dateline: Tue 06 Sep 2011

University of Wisconsin law prof Ann Althouse blogged Monday on the possible end of the Post Office as we know it -- yes, it's another bloated federal agency with debt out the wazoo that, for whatever reasons, has never embraced no-Saturday delivery, as the postal system in Canada has done.

From the post:

"Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees....

“'The situation is dire,' said Thomas R. Carper, the Delaware Democrat who is chairman of the Senate subcommittee that oversees the postal service. 'If we do nothing, if we don’t react in a smart, appropriate way, the postal service could literally close later this year. That’s not the kind of development we need to inject into a weak, uneven economic recovery.'”

Althouse's answer is similar to what I said about the Indianapolis Star under Gannett leadership and its myriad of problems: do nothing. Let it fail.  Heresy. I know. But there it is.

Althouse writes, of the Postal Service and her larger belief system....

"My preference is always: do nothing. That's the presumption you need to overcome. It's good for government and it's good for your individual life too. (For decades, my personal motto has been: Better than nothing is a high standard.)

"Why not let this propped-up competitor to FedEx and UPS (and the internet) fall? There would be losers but there would also be winners."

Then she quotes Rahm Emmanuel, "You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before."

OK, so do nothing, but then -- the paradox -- instead "do things you think you could not do before" -- that sounds like change. It is radical, down to the root; it's the beginning of something: to create something new where there is nothing.

This nation is in the deep freeze of a terrible financial crisis; the Russian leader Vladimir Putin called us a "parasite on the world economy" due to our enormous debt that threatens to topple global markets. Hate to say it, but his point resonated.

"A hard rain is gonna fall," said former Star reporter George Stuteville on this blog, and I do believe that. Forget all the wasteful angry rhetoric about the tea party vs. the Democrats, and who among us can solve the debt-ceiling crisis. The truth is, the economy is dead in the water, and we don't have enough jobs (and it's much worse for minorities). The middle class is being squeezed into consumerless oblivian; the poor are ever more dependent on food pantries, other handouts and the charity of strangers.

Clearly, some institutions and ways of life that we have taken for granted are going down. It's inevitable.

Do nothing. Let the old unworkable entities pass. See what evolves.

And even as I write this, I have to say at one level I hope it all is just crazy talk: I hope the Star gets what it needs to restore staffing, that the post office chugs along, that life as we know it can go on.

But it's fair to say that reasonable doubt has been introduced....


Pasquale [unverified] said:

This was in The New York Times yesterday, which is where she got some of her stuff. Sounds like it is kind of complicated to straighen it all out and includes changing laws, etc. The union problem sounds like a mess, too.

2011-09-06 10:21:13

Pasquale [unverified] said:

Oh, she linked to it but just didn't mention it in her post. Sorry.

2011-09-06 10:28:17

Whitebeard [unverified] said:

Stopping Saturday delivery makes sense to me.

It's a prime time for mailboxes to be raided by thieves. People go out of town for the weekend and their Saturday mail sits exposed for all to see.

Would save the postal service big $$$$ and has been talked about for years, but....

2011-09-06 11:58:21

Jason [unverified] said:

I agree with Whitebeard.

My father worked for the Post Office for many years at the end of his civil service career, and often remarked that the the Post Office was the only government body to never receive a dime of tax money. They make most of their money on bulk-rate mailers and advertising, so I'm not sure why they're loss of all the first-class mail is affecting their bottom line. My understanding, as your column alluded to, is that FedEx and UPS are far more automated.

Years back, USPS spent around $30 million (back when that was a lot of money) on automated sorting machines, which actually worked out quite well. Then it was determined that every carrier should double-check all the sorting just to make sure the machine got it right. So they more or less spent boat loads of money to make the process longer. My dad said this type of thing was very common.

2011-09-06 13:50:18

Tell The Truth [Member] said:

Still one of America's best bargains: drop a letter in the mailbox tonight, to west coast, it's there in two days, for less than a half buck.

Beat that with a stick.

Thanks, Ben Franklin.

2011-09-07 08:10:58

John M [unverified] said:

"The truth is, the economy is dead in the water, and we don't have enough jobs."

And so, as a partial solution to this, we should allow an independent federal agency, an agency that has financial problems but generally is self-sufficient, to go belly-up instantly. We should do that even though the USPS employs over 500,000 people, more than any private employer other than Wal-Mart. Undoubtedly, FedEx and UPS would absorb some of those employees, but if labor costs are the USPS's major problem, presumably it wouldn't come close to absorbing all of them. Ann Althouse is a walking definition of "glibertarian."

Further, as TTT notes, the existence of the USPS isn't some New Deal overreach. It's in the Constitution! Even the founders, who couldn't have conceived of Social Security or a federal income tax, understood a postal service to be an essential function of government.

The problem is that for some reason, it has emerged as bipartisan consensus that these tough economic times should be dedicated to deficit reduction. Unfortunately, cutting government spending means cutting government jobs. And cutting government jobs at a time when the private sector isn't creating jobs won't help anything.

2011-09-07 10:37:49

jstickel [Member] said:

USPS Workers w/ expensive benefits? Whodda thought?

Relaying a story from my Dad, who has paid extraordinarily health insurance premiums all of his working life (he never worked for a company that paid great benefits):

While recently playing golf w/ his USPS worker friend, the friend went on a rant about how he was about to be forced to pay something like $50 per month for family health insurance, something he never had to do before. Dad, who averaged paying over $500/month for poor coverage for just he and his wife, almost buried his nine-iron in the guys you-know-what.

C'mon guys, feel some pain like the rest of us. I wonder what %-age of "labor costs" goes to employee health insurance.

2011-09-08 09:12:02

Tell The Truth [Member] said:

I never cease to be amazed at what folks THINK they know about others' health benefits. If these myths go uncorrected, they take on a life of their own.


Perhaps, JStickel, better health insurance was traded in negotiations, for no pay raise, or a smaller pay raise, or less-than-good working conditions, or whatever.

A little context, please. No postal retiree is living in high cotton. No moreso than some other retirees.

Can we stop beating up folks who step up to claim benefits to which they're rightfully entitled, via collective bargaining, seniority, or whatever? If we think they're overly generous, then we can alter it for new hires.

The horse is out of the barn.

2011-09-08 15:32:01

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