All Things in Moderation

The Wrong Focus?

13 Responses

1. 

   yellojkt, on May 18, 2012 at 6:47 am said:

   As the joke goes, they lose money on every letter but make it up in volume.

   Charles Pierce made an observation the other day that assaults on the Post Office are really aimed at destroying our sense of community and our faith in the good works of government.

   Benjamin Franklin started both the post office and the first lending libraries and both institutions are always under continuous assault.

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     ScottC, on May 18, 2012 at 7:18 am said:

     yello:

     Charles Pierce made an observation the other day that assaults on the Post Office are really aimed at destroying our sense of community and our faith in the good works of government.

     He read me like a book. That is exactly what I was doing!

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2. 

   Michigoose, on May 18, 2012 at 7:02 am said:

   Who should the US taxpayer be more concerned about having to support with a taxpayer funded bailout, the US Postal Service or JPM Chase?

   Good lord, Scott. False equivalency much?????

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     ScottC, on May 18, 2012 at 7:19 am said:

     Mich:

     False equivalency much?????

     Could you expand on this?

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3. 

   lmsinca, on May 18, 2012 at 7:02 am said:

   Food for thought:

   To send a letter by UPS from one city to another in the same state costs either $15.16 or $22.29 depending if you want it there in one day or two. To send a letter across the country will cost you either $18.75 or $19.84.

   Also, I just read a piece in this morning’s local paper that banks are getting into payday loans……………………….

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4. 

   Brent Nyitray, on May 18, 2012 at 7:35 am said:

   He read me like a book. That is exactly what I was doing!

   Smithers, we need to make every Johnny Lunch Box in Springfield distrust their government and put their faith in me!

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5. 

   novahockey, on May 18, 2012 at 7:42 am said:

   I’m not sure how I would improve the post office. I try to use the machines to the extent possible.

   We made an appointment at a branch to have passports done. We confirmed that they will take passport photos. We get there — and they won’t take my son’s picture, because he’s a kid and not tall enough to stand in front of the white screen they have. and they won’t let him stand on a chair. and the clerk doesn’t know how to use the camera anyway. so we go across the street to CVS and have pictures taken. in and out in 10 minutes. when CVS is beating you, something has gone horribly awry.

   Amtrak – I have extended family who work for Amtrak. who knew that punching tickets will get you within striking distance of a six-figure income.

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6. 

   jnc4p, on May 18, 2012 at 7:46 am said:

   As it so happens, I’m writing this post while traveling on Amtrak. Amtrak Business Class is still a civilized way to travel.  If I was to do an ad campaign for Amtrak, it would show a line of people with shoes in hand in the full body scanners at the TSA station at the airport with the tag line: “Amtrak – Travel without the BS”. 

   Couple of points:

   1. The Charles Pierce piece is amusing in that it glosses over the propaganda effect inherent in statements like “”The New Deal sought to make the national government’s presence felt in even the smallest, most remote communities…. The post office was ‘the one concrete link between every community of individuals and the Federal government’ that functioned ‘importantly in the human structure of the community…. [The post office] brought to the locality a symbol of government efficiency, permanence, service, and even culture.”” That’s easily on the same level as anything the conservatives are doing with commentary about Post Office efficiency, etc.

   2. Comparing subsidies/bailouts between the Post Office and the banking industry, especially TBTF banks isn’t necessarily false equilivency, but it’s worth deconstructing a little bit as to why that’s the case. 

   The Postal Service is currently structured as a semi-autonomous agency that is expected to be self funding, but also comply with various Congressional mandates. If it was viewed like most other agencies of the Federal Government, such as the Defense or Justice Departments, it would make no sense to ask if it was profitable or not. Conversely, if it was completely private there would be fewer restrictions on what lines of business it could go into in search of profits. Looking at other countries such as Japan and Germany, the postal services there often have ancillary banking businesses which help to subsidies their activities. For me, the current issues with the Postal Service seems to be another cautionary tale of public or semi pubic agencies that have both a public service mandate and a profit seeking or at least cost offsetting mission as well. I.e. like Fannie Mae, Freddie Mac, etc.

   Given that the Postal Service is one of the enumerated responsibilities of the Federal government from the Constitution, the arguments for subsidizing it are probably stronger than most, but that doesn’t change the fact that the current economic model that it is using is based on the way mail was handled in the past and will not be viable in the future, if it’s expected to be self financing. 

   Andy Stern had a comment about the old industrial unions which seems applicable to the current Post Office as well :

   “… I think they seem like a legacy institution and not an institution of the future. And legacies get shed. The question is does anything replace them?”

   http://voices.washingtonpost.com/ezra-klein/2011/02/andy_stern_it_may_not_end_beau.htm

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7. 

   yellojkt, on May 18, 2012 at 7:57 am said:

   jnc,
   I agree that the Post Office is hamstrung by having government level responsibilities while being expected to operate under corporate guidelines. Universal single rate service is a huge impediment, much like mandated routes are to Amtrak.

   And aren’t most of the Post Office’s losses bookkeeping issues governing unfunded pension responsibilities?

   I for one am happy for never expiring stamps because the rate increases have become too granular to keep track of.

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8. 

   jnc4p, on May 18, 2012 at 8:33 am said:

   yellojkt, on May 18, 2012 at 7:57 am said:

   “And aren’t most of the Post Office’s losses bookkeeping issues governing unfunded pension responsibilities?”

   A chunk are, but it’s worth noting that the prefunding pension requirements were designed to prevent huge unfounded pension liability in the future, not “deligitimize the Post Office”. It’s a case of pick your poison.

   Like so many of our issues, there are real structural problems here involving a workforce and fixed infrastructure that are more than is needed for the current and projected mail volume

   “I for one am happy for never expiring stamps because the rate increases have become too granular to keep track of.”

   I think technically that’s called being part of the problem.

   Steve Pearlstein on Postal Service reform:

   http://www.washingtonpost.com/wp-dyn/content/article/2010/03/30/AR2010033003857.html

   http://live.washingtonpost.com/pearlstein:-business-and-economy-033110.html?sid=ST2010033104700

   & WaPo Editorial Page

   http://www.washingtonpost.com/opinions/on-postal-reform-the-senate-mails-it-in/2012/04/26/gIQAxnl0jT_story.html

   http://www.washingtonpost.com/opinions/the-time-for-real-postal-reform-is-now/2012/04/14/gIQAA1oyHT_story.html

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9. 

   Fairlington Blade, on May 20, 2012 at 1:08 pm said:

   I would make one point of false equivalence. The USPS is required by Congress to keep money losing operations open. Small post offices. Charging the same rate for delivery everywhere. Furthermore, the USPS does not have control over its pension costs.

   If the USPS is to be compared with a private company, then it must be done only as a private entity. Parenthetically, I’m cool with that.

   BB

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10. 

    Kevin S. Willis, on May 21, 2012 at 8:24 am said:

    “And aren’t most of the Post Office’s losses bookkeeping issues governing unfunded pension responsibilities?”

    My understanding, and I could certainly be wrong, is that the USPS has the onerous responsibility to pre fund their pension liabilities 75 years into the future (or something like that). I recall hearing that no other government agency (and certainly no private entities) have such an onerous expense written into law. I understand the rationale behind such pre-funding, but I don’t think any entity could break-even with such pre-funding obligations, if I recall them correctly.

    From this:

    On the other hand, its pension is overfunded to the tune of around $11 billion. It is also required by law to make an annual payment of nearly $5.5 billion to prepay for health benefits for future retirees, a mandate imposed on no other company — or government agency — in America. Simply ending that onerous prefunding requirement and reclaiming the excess pension money would go a long way toward shrinking the losses.

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11. 

    Kevin S. Willis, on May 21, 2012 at 8:27 am said:

    From this:

    I caught up with Fredric Rolando, President of the 300,000 member association, asking him if Congress did indeed create the USPS fiscal crisis.

    FR: Yes, that’s precisely what it did. The congressional notion was that the Postal Service was making lots of money selling its products and services, and so it might be a good idea to put those profits into pre-funding future retiree health care benefits for the next 75 years and do so in a decade. No one else, public or private, does this – but it would put the Postal Service that much more ahead of the game in terms of future liabilities. And so, in 2006, Congress mandated that the USPS do so, at a price tag of about $5.5 billion a year.

    The problem is that shortly after that was put into effect in 2007, the economy started to enter the worst recession in 80 years. Businesses were hurt, unemployment rose, and as a result mail volume dipped.

    Despite all that, the Postal Service has performed well, achieving $611 million in net operational profits delivering the mail over the four fiscal years since 2007, in part through increased worker productivity and close management-labor cooperation. On-time delivery and customer satisfaction are at record levels. But because of the recession, the profits were not enough to pay for the $21 billion cost of pre-funding over that period. And so, the Postal Service had to dip into its profits, its savings and its borrowing authority.

    Any private company would have said that this was a noble idea, to try to do something no one else does – pre-fund these benefits 75 years out – but let’s revisit the idea when the recession ends, the economy returns to normal, and profits are sufficient to do this. But because of the congressional mandate, the USPS didn’t have that option.

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