The Imminent Death of the U.S. Postal Service?

http://www.the-american-interest.com/article.cfm?piece=614

by mhb • 17 years ago

14 27 17 years ago

quoderat• 17 years ago

FedEx and UPS take the most profitable business from the USPS, while the post office serves everywhere and everything, very nearly. If it weren't for the universal service requirement, the USPS could operate like the private companies. But personally, I like getting my mail no matter where I live.

You do the math on that universal service vs. choosing the profit maximization thing.

Talking about the post office's losses without citing that context is disingenuous.

Also, from having worked at a mailing house, I can tell the author doesn't understand much about how the post office actually routes mail.

colins_pride3• 17 years ago

FedEx and UPS take the most profitable business from the USPS, while the post office serves everywhere and everything

That is an awesome insight, it really cuts through all of the noise.

If it weren't for the universal service requirement .. But personally, I like getting my mail no matter where I live.

This part I question .. shouldn't people who live in expensive to serve places and/or people who want to send mail to those places pay for the costs that they're imposing on the system?

sachinag2• 17 years ago

There's a long-standing tradition that communication between any two of a country's citizens is important to protect as it is a public good. Postmaster General was a cabinet position for many years because of this. The desire to impose market pricing on market costs for everything is unsettling to me.

rsheridan62• 17 years ago

>FedEx and UPS take the most profitable business from the USPS, while the post office serves everywhere and everything, very nearly.

Yes, they actually send unprofitable packages through the USPS.

jerf• 17 years ago

Your argument is basically that universal service is "nice".

Yes, I know you wouldn't phrase it that way, but it is what it boils down to.

The counterargument is the simple fact that as the system is working and structured now, we can't afford it.

An awful lot of the problem with the way we've been responding to this economic crisis is the way that people have been acting as if we can just wish for nice things that we can't afford, and somehow it'll all just work out. Car companies may be losing money by the billions, but it sure would be nice if they made a profit, so let's wish a few more billion at them to lose, rather than making the hard decisions. It sure would be nice if the postal system could make money without making the hard decisions, so let's wish a few more billion at them.

At some point, you have to make the hard decisions. People spit at the word "profit" because of the various (mostly stupid) negative connotations given to it, but remember that no matter how socialist or even communist you may be, SOMETHING has to make a profit! Whether it's a profit in money or a profit in credits or a profit in sweet, sweet love, something has to generate more value than the effort you put into it, or you have no money or credits or love to subsidize your other desires with.

Now, if you make the right hard decisions, we can probably keep universal service. The article has several constructive suggestions. But some hard decisions will have to be made. (And for all the exciting rhetoric from the Obama administration about making hard decisions, I can't hardly name one actually hard decision he's made, rather than wishing more taxpayer money at things that make no money.) Individually, maybe we could afford a postal service that loses billions, but against an economy where everything is having trouble, we probably need to go to a model where the post office at least breaks even... and if that means losing something "nice", well, so be it.

gojomo3• 17 years ago

Talking about the post office's losses without citing that context [universal service] is disingenuous.

The article devotes much discussion to the Universal Service Obligation; its origin, rationale, effects, and ways it can be updated without generating the tens to hundreds of billions of dollars of losses the USPS is now racking up. Did you read the article?

But personally, I like getting my mail no matter where I live.

Should the rest of the country pay tens to hundreds of billions of dollars for your convenience, if they don't share your preference?

rsheridan62• 17 years ago

I used to work for the post office, and I think their big problem is universal service, unionized labor, and lack of investment in labor-saving technology (for whatever reason). They also can't just adjust prices as needed.

If they're not responsible like a real corporation, nobody told their management that. The work environment there is like a pressure cooker, and they chew out carriers for going 5 minutes over their allotted time. But there's really nothing else they can do besides acting unpleasant because it's almost impossible to fire a carrier after they've passed their probationary period.

I doubt that a private corporation would do much better with the same constraints. Of course, in the age of the internet and telephones 6-day/week universal service may not be as important as it was in the 19th century.

Also, what's this BS about calling the post office a "ponzi scheme" because they rely on advertising and we're in a recession? Are google and broadcast TV also ponzi schemes? Is the recession going to last forever?

lliiffee• 17 years ago

It seems that these days "Ponzi scheme" == "Anything I don't like that involves money"

sho2• 17 years ago

Here's where I stopped reading:

[..] some 20 percent of direct-mail advertising volume is comprised of credit card, mortgage and other financial offers. So yes, the USPS has contributed in a subtle yet very real way to our burst economic bubble.

Ludicrous. If that's the level of the author's insight, why bother reading the rest?

Nogwater• 17 years ago

It's funny. That's where I stopped too.

gojomo3• 17 years ago

Then you missed a lot of meaty info because of a throwaway line.

Compared to other subsidies the government has been giving bad actors, this USPS subsidy to the credit industry is minor, yes. But it's surprising how merely mentioning it closes your mind to the rest of the analysis. It's almost like you've got a post-hypnotic suggestion preventing you from questioning certain monopolies!

sho2• 17 years ago

Hardly. I don't live in America, in fact I'm in a country mentioned as an example of a "good" post office.

The assertion that a subsidy on direct mail somehow contributed to the ongoing financial crisis is just stupid and calls into question the author's basic understanding of the subject and ability to identify relevant information. You might as well say that coffee contributed to the crisis because it enabled bankers to stay up later and write more bad contracts. Hell, name anything you want and I'll connect it to the crisis using some bullshit six-degrees-of-separation methodology like the author used for direct mail.

whatusername• 17 years ago

Do you truly have universal service? I know that some of our (Australia) more remote locations get less than the 5 days per week we get in the cities. Even in some of the outer outer suburbs of Melbourne (I'm talking Cockatoo) -- I know there are some roads/areas that the postie wont deliver to - instead the residents have to pickup from the local general store/"post office". (remembering that we have 21 mil people in an area almost the size of the lower 48 states - and one of the highest urbanization rates in the world - so it's big big cities with lots and lots of open space in the middle)

gojomo3• 17 years ago

I really like the tone of this article. While informed by the market-liberal/competitive-economics viewpoint, it's not doctrinaire. It's respectful of the historical rationale for the USPS and realistic about the political environment for reform. It makes practical suggestions with examples of the companies and other countries that have succeeded with similar policies.

The Imminent Death of the U.S. Postal Service?

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