Pity the poor Post Office . . . NOT!

I'm infuriated by this report in the New York Times today.

The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

“Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, said in an interview. “If Congress doesn’t act, we will default.”

. . .

The post office’s problems stem from one hard reality: it is getting squeezed on both revenue and costs.

As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.

At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. 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.

. . .

Mr. Donahoe’s hope is to cut $20 billion of the $75 billion in annual costs by 2015. To do that, he wants to close many post offices and slash the number of sorting facilities to 200 from 500 and trim the agency’s work force by 220,000 people, from its current 653,000. (A decade ago, the agency employed nearly 900,000.)

The postal service has the legal authority to close facilities, although community opposition can make the process difficult. To placate critics and cut costs, officials say they would seek to run some postal operations out of stores like Wal-Mart or to share space with other government offices.

Cutting the work force is more difficult. The agency’s labor contracts have long guaranteed no layoffs to the vast majority of its workers, and management agreed to a new no layoff-clause in a major union contract last May.

But now, faced with what postal officials call “the equivalent of Chapter 11 bankruptcy,” the agency is asking Congress to enact legislation that would overturn the job protections and let it lay off 120,000 workers in addition to trimming 100,000 jobs through attrition.

The postal service is also asking Congress for permission to end Saturday delivery.

Given the vast range of stakeholders, getting consensus on a rescue plan will be difficult.

There's more at the link.

The whole Post Office boondoggle is symptomatic of the 'too big to fail' mentality that led to the bailouts of General Motors and Chrysler, the Federal takeover of billions (perhaps trillions) of dollars of toxic bank and mortgage debt, and many other actions that have caused our current massive deficit. Every measure discussed in the article, and all those quoted, fail to address one simple question that should be asked before anything else is said or done:

Why should the Post Office survive at all?

Is there any good reason why the Post Office shouldn't be disbanded? Cease to exist as an organization? After all, there are many private companies (including FedEx, UPS, and many other courier companies) who'd happily offer to handle all routine mail deliveries (for an appropriate and commercially viable fee, of course). They'd do so using modern technology and business practices, not rooted in the old days of foot and horse transport. They'd also offer jobs to hundreds of thousands of new employees to handle the business. Of course, they'd pay them a market-related compensation package, rather than the feather-bedded union contract deal currently enjoyed by Post Office staff.

Quite frankly, I don't think there is a solution to the present impasse over the Post Office. Congress wants solutions that are palatable to the electorate, more than it wants solutions that make business sense. The Post Office employee unions want solutions that secure the privileged position of their members, more than solutions that make business sense. The Post Office's managers want solutions that support and strengthen the organization's privileged position, rather than opening up the sector to commercial competition (which is the only approach that makes business sense). Since all three stakeholders are focused on solutions that don't make business sense at all, how can we expect anything to come of the present imbroglio?

The article ends as follows:

Fredric V. Rolando, president of the National Association of Letter Carriers, warned of disaster if partisanship keeps Congress from acting.

“This is about one of America’s oldest institutions,” he said. “It survived the telegraph, it survived the telephone, and we have to do everything we can to preserve it and adapt.”

Why the hell should we 'do everything we can to preserve it and adapt'? The telegraph is dead. The telephone (in its original, wired form) is going that way. The buggy whip industry died a long time ago, and US car manufacturers (unless they improve very fast) are confronted with a similar fate in the face of smarter, leaner, more nimble international competition. Why should the Post Office be any different? And why should we be forced to pay, through taxes and user charges, for the survival of a commercially non-viable anachronism?

On the facade of the James A. Farley Building (the main post office building in New York City) appears this inscription, based on a quote from Herodotus' Histories (8.98):

Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.

Legend has it that a disgruntled customer once wrote on another portion of the facade, "Well, what is it, then?" One might ask that same question of both the current management and union leadership of the US Post Office, concerning their inability to understand and/or accept reality.





Peter