Question: On Friday, the U.S. Postmaster General released a plan to transform the postal service into a more efficient, less costly entity. Is this the best way to fix the postal service? UPI National Political Analysts Peter Roff, a conservative, and Jim Chapin, a liberal, face off on opposite sides of this critical question.
The U. S. Postal Service, a symbol of sloth and inefficiency, lost $1.6 billion last year.
It is hard to imagine how a monopoly can lose market share and money, but the USPS consistently manages to do both.
They blame the terrorist attacks, anthrax, and the new protective measures for much of the deficit. These are this year's excuses. In other years, increases in the price of gasoline have been blamed. It's always something.
The USPS rarely puts sensible reforms on the table. The proposed cuts are usually the thing consumers appreciate the most rather than what makes the most sense.
Postmaster General John Potter is suggesting, in the name of economy, that some post offices may be closed and that Saturday delivery may have to be curtailed or ended. These are, of course, the things that are most likely to provoke the American people to demand congressional action to save the postal service -- allowing the waste and inefficiency to continue.
The cost of a first-class letter is set to increase to 37 cents this spring. Some analysts project another increase is soon to follow, raising the price to 40 cents because the post office continues to hemorrhage money.
Before the price of stamps can increase, the Postal Rate Commission, an independent body, must approve. Unfortunately for everyone, another of the reforms the postal service advocates is to bring the rate setting function in house -- letting the Postal Service set its own rates under the guise of streamlining and providing more predictability to changes in the cost of postage.
With the USPS's current monopoly over "the last mile," as delivery service is sometimes called, moving the rate setting function inside the USPS further subsidizes the waste while eliminating incentives to cut costs.
Real reform will come only through competition and through a change in the way that the postal service labor force is organized,
The post office is the nation's second largest civilian employer -- second only to the Wal-Mart retail chain. The workforce is unionized, but the unions are organized around job functions. The letter carriers have one union, the postal workers who sort the mail have another. These unions work very hard to keep a firewall in place that makes it difficult for job functions to be combined. The workforce is inflexible.
The attrition rate among postal workers is, historically, about 3 percent. In the last few years however it has risen to 6 percent. A soft-freeze, allowing the USPS to hire only enough workers to address half of current attrition, would bring the workforce back to a financially manageable level in short order.
If the post office is really losing market share -- as it leaders and union officials claim -- to competition from UPS, FedEx, and the Internet, among other things, it is only sensible to allow the workforce to shrink naturally. It is certainly better then killing Saturday mail and raising the price of stamps yet again, which is why the postal service and its allies will likely oppose such a move.
Is the Post Office a Monopoly?
Of course not. Competition in many areas of mail and package delivery is allowed, and indeed encouraged.
But making money is not what the post office is designed to do. It has to provide service to every village and hamlet in the nation, at the same price.
When one competitor has to serve everyone, it allows the others to "cherry-pick" the people they choose to serve and the services they choose to provide. They can deal with those who will pay the most for their services, while driving the "universal" service to the financial wall.
Of course, that's what conservatives love. It's just like the educational system -- in which all the disruptive kids and the failed ones are assigned to the public schools, and the private schools get to compete "equally" for the better students.
But in education, at least no one expects the public schools to "break even" -- public K-12 classes are free.
That's not true for the post office. The post office is supposed to break even, and it is supposed to provide mail delivery even to hamlets and hermits -- even to Ted Kaczynski .
If the post office really existed to make money, it could do so very simply by doing what the big airlines did under deregulation -- cutting off service to the small towns and rural areas around America. There is an irony here -- those same small towns and rural areas are in "red" country. They are the districts that elect Republicans.
It is the Republicans who benefit by the USPS's obligation to provide universal delivery everywhere at the same price -- which is a hidden subsidy from the Gothams that elect Democrats to the Podunks in their districts. And at the same time, having made sure that the USPS will lose money, they can parade around declaring that its failure to break even proves that government is "less efficient" than private enterprise.
This game, which is called the "socialization of loss, and the privatization of profit," is one of the old standbys of American conservatism. Saddle government with all the losing features of the economy, and give everything that works to the private sector ("give," in the case of everything from drug technology to TV band width, is an entirely accurate description).
When things go wrong, invoke "lemon socialism," which means giving all the lemons to the government while keeping the peaches in private hands. For instance, if the big insurance companies don't want to pay for the losses of 9-11, get everyone to pay for it. Or shovel money to the "private" airline companies -- not too much complaint about their inability to break even!
Setting up two-track systems like this is the conservative goal for every sector of the economy. It's what conservatives want to do to the medical system and the retirement system as well.
It's a bad idea everywhere, and that includes the post office. There's a reason the USPS was the first great institution of the new America founded in 1789. Equal communication at an equal price is still a primary social goal for our nation.