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Can the United States Postal Service be saved … and should it be?

Can the United States Postal Service be saved … and should it be?

Back in the days when the United States Postal Service (USPS) was starting up, I am quite sure there were all kinds of pleas to save the Pony Express – claiming it to be an essential service.

Today, the question is what to do about the Postal Service.  It is not the same as it was in my youth – speaking of the Postal Service, not the Pony Express.

In times past, the Post Office Department was a part of the federal government.  The head of the Department was a member of the Cabinet appointed by the President.  In 1971, that Department became the quasi-independent United States Postal Service – more or less a regulated private corporation.

At the time, it was argued by proponents that the new USPS would eventually be self-sufficient – running on its own income generated by customers.  As is almost always the case with government promises, it did not happen – not even close.  The USPS requires billions of dollars in taxpayer-funded subsidies to remain open.

What the subsidies do is enable the USPS to keep rates down.  That gives them a competitive advantage over special delivery services, such as FedEx, UPS and Amazon.  Despite the advantage, the USPS has lost a lot of package business to these other services, because they provide better services – faster delivery, better insurance coverage against loss or breakage.  Larger shippers handle merchandise too heavy or bulky for the USPS.

Technology brought another blow to the old-fashion custom of letter writing.  It is called email.  Not too many years ago – when my business included managing NGOs – I sent out hundreds, and even thousands of letters, flyers, invitations and notices every month.  Today, virtually all of that is done over the internet.  Even birthday and Christmas “cards” are sent and received by email.

In the past year, I put postage stamps on less than half-dozen envelopes.  On the other hand, I received hundreds of emails every day – and send out maybe 20 or 30.  For some creditors, I use “paperless billing” – meaning it does not go through the Post Office – and autopay.  That also means I use only about two or three checks from my checkbook each year.

The point is … times they are a-changing.  For sure, we can continue to supply the USPS with enough money to survive.  If we had applied that philosophy in the past, we could still have the Pony Express riding horses throughout the country.

We also have to keep in mind that you and I are paying to keep the USPS operating in the old method.  What we avoid in rate increases, we pay for in subsidies.

The Progressives are all in on giving the USPS whatever it needs to cover the losses.  That is because it makes postal employees essentially government workers – dependent on money from Uncle Sam a.k.a. you and me.  The socialist brand calls for government control of the means of production and the workforce.  Government’s role – according to the left – is to guarantee even unneeded jobs.  It is how they operate.

MSNBC’s Ali Velshi recently offered up a full-throated plea to give the USPS whatever money it needs – whatever it wants.  He claims it is an essential service upon which every American depends.

Velshi is correct when they say that mail and package delivery is an essential service.  But even with all the favoritism and subsidies provided to the USPS, the innovations of private businesses have already taken a HUGE share of postal commerce – and if the postal service were to go out of business, the private sector would fill the void and essentially employ all those needed workers.  The demand – albeit lessened – is still there for daily home delivery, so it would be met either by the USPS fundamentally re-inventing itself – just as Kresge’s Five and Ten became K-mart – or other new enterprises will fill the gap.

Oh yeah.  It is true.  Rates might have to go up to meet the market realities, but it would be more than offset by the billions of dollars currently being poured into the USPS as life support for a dying operation.  Efficiencies might offset the inefficiencies of government-run and subsidized business enough to avoid any large increase in rates.

We do have an example of what happens if a government-run service is turned over to the private sector.  The City of Chicago sold off its parking meters to a private company because the City was losing money.  The private company did nothing that the City could not have done – increased the number of metered parking spots, introduced credit card payment and raised rates – and the company is making millions upon millions of dollars in profits.  That money could have been flowing into the City coffers, but that is not how government works.

We Americans do have a romantic feeling about our traditional mail-delivery service.  It is a cultural icon that we celebrate in song, theater and movies. We see our local delivery person as a bit of a friend – more so than that guy or gal from UPS or FedEx.  Of course, we still express cultural romanticism about the Pony Express. But that is not a good basis to prevent a failing system from changing – or being replaced.

So, there ‘tis.

About The Author

Larry Horist

So,there‘tis… The opinions, perspectives and analyses of Larry Horist Larry Horist is a businessman, conservative writer and political strategist with an extensive background in economics and public policy. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman. He has served as a consultant to the Nixon White House and travelled the country as a spokesman for President Reagan’s economic reforms. He has testified as an expert witness before numerous legislative bodies, including the U. S. Congress. Horist has lectured and taught courses at numerous colleges and universities, including Harvard, Northwestern, DePaul universities, Hope College and his alma mater, Knox College. He has been a guest on hundreds of public affairs talk shows, and hosted his own program, “Chicago In Sight,” on WIND radio. Horist was a one-time candidate for mayor of Chicago and served as Executive Director of the City Club of Chicago, where he led a successful two-year campaign to save the historic Chicago Theatre from the wrecking ball. An award-winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He is praised by readers for his style, substance and sense of humor. According to one reader, Horist is the “new Charles Krauthammer.” He is actively semi-retired in Boca Raton, Florida where he devotes his time to writing. So, there ‘tis is Horist’s signature sign off.

11 Comments

  1. RAVEN

    ”DO AWAY with the ”Snail-Pace Pony Express (USPS)”-Cost of Billions of Tax Payer’s dollars is a waste of public funds.Use Fed Ex.UPS.and Amazon, to replace the ”Pony Express”,As of Right Now!”

    Reply
  2. Mike

    Joe, You are on a roll today, continuing to misinform your readers. How about doing a little research for once to understand why the post office is having their problems instead of blithely asserting “let them die”. Republicans in Congress have made it necessary for the Postal Service to fund their retirement plan that is far greater than private industry. This requirement costs them billions of dollars a year. If we truly want the post office to be competitive, then this requirement needs to be lifted to level the playing fields. Republicans are opposed to onerous regulation, except when they aren’t. So there tis…

    Reply
    • Knock Knock

      Well Mike – you just sound like a jerk. If this is how you approach political conversations it would explain why nobody wants to sit next to you at Easter dinner.

      Reply
    • Larry Horist

      Mike, I am responding since due to a technical problem, the commentary temporarily had the wrong author. You are correct that the super-duper pension plan for postal workers is PART of the problem, but not nearly all of it. You must admit that eMail has cut into the USPS business a lot — in addition to other delivery services. FedEx did not even exist until 1971 and Amazon in 1994. You are wrong, wrong, wrong to blame the luxury pension plans on Republicans. The fight against these excessive pension plans — including those currently bankrupting places like Chicago, Detroit and New York — are the hallmarks of Democrat governance. The only question is … should we keep using our tax money to give us lower rates. Uncle Sam is NOT subsidizing the USPS. We are.

      Reply
  3. Nightlight

    Everybody seems to believe, or to long have long been led to believed, that the postal service should be/has to be a government operation/department when this is not, nor ever was, true.
    In fact a privately owned and run postal service, which had become our only postal service by beating all the other competition, would be vastly superior to the USPS we have now.
    The gross incompetence, mismanagement, and wasteful spending of the USPS is an undeniable fact, a joke in bad taste, and a constant reminder that this corrupt institution should have been scrapped long ago.
    In the mean time, we the taxpayers are paying for this monumental mess.
    The USPS should not be bailed out; it should be allowed to self-destruct and replaced with a private company.

    Reply
  4. George Blumel

    FedGov cannot ever run a business efficiently as there are too many political demands that interfere with sensible market demands and choices. The employees’ union is a lobbyist and its pension plans are always going to be underfunded because there are no taxpayers represented at the negotiating table –only the union and politicians who want their support for reelection. So the pols pass on the responsibility to the next generations. That’s how we get $zillion debt. Solution:
    Sell the Postal Service to private companies, sell all the Post Office buildings and vehicles and equipment –and put ALL of the proceeds to pay down the debt. It would make a small dent in the national debt but it would stop ADDING to the debt every year!

    Reply
    • DB

      The Federal Aviation Administration did just that with their Flight Service Stations. The deemed that briefing general aviation pilots of conditions along their routes and other special data, giving them weather reports, sending in flight plans, dealing with emergency aircraft operations and lost aircraft, taking weather observations, performing teletype operations which could today be on a keyboard like this, was deemed to expensive and the FSS and people were sold off to Lockheed Martin who fired almost everyone, hired in new or rehired old people to do the same job as before but at half the price, ,then they closed the hundreds of facilities around the nation except for 3, West Coast, East Coast and one other location. When a pilot went to file a flight plan and was in Key West he might be talking to a person in LA who knew nothing of the keys and get nothing. So pilots started ignoring them. So what did we end up with a nothing that the government still funds through a contract. Lousy service by people that can only read paper or a screen to you. You are better off doing a self briefing but LM still gets them money! The USPS needs to be shelved the same way.

      Reply
    • Lowell

      I don’t know about all areas, but at least in my area the post office buildings are privately owned and are under lease to the USPS and letter carriers use their own vehicles.

      Reply
      • Larry Horist

        The fact that the USPS leases space is irrelevant. They are losing money big time. As far as carriers using their own vehicles, I assume if that is true you live in some very remote place. And do you know if they get mileage compensation?

        Reply
  5. TCT

    I’m all for this from the poster above.
    “Sell the Postal Service to private companies, sell all the Post Office buildings and vehicles and equipment –and put ALL of the proceeds to pay down the debt. It would make a small dent in the national debt but it would stop ADDING to the debt every year!”

    What I see is an antiquated service that has fallen behind the times.
    Sell it off to private industry.

    Just about every time I have to go in to mail something it ends up in a mess. Long wait – three people don’t know what to charge.
    The automated machine came out in 1970 and they are still using it.

    Put in full automation on packages and letter postage to mail it.
    A machine can weigh and size anything.
    Then give you choices.
    Not like the ones they have in there now or behind the counters.

    Sell it all off. Print is coming to an end as stated above – automation in billing and paying.

    Make it private. Companies can bid for the spot and hire the carriers, expand the routes with realistic amounts of work.

    Let’s step into the 21st century here.

    Reply
  6. Thomas

    The losses are prefunding health care cost for retires ,the PO should fund medicare A B D & G for its retires and drop all other medical coverage and allow retires to purchase coverage for services medicare doesn’t cover.

    Reply

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