Tag Archives: Losing

Even parts of government that look like a business never get run
with the efficiency of a business. Just look at the post
office.
They buy commercials and tout their services the way private
businesses do. They offer a service that customers want.
But a real business can’t get away with losing billions every
year. (I guess in the era of bailouts, I should say
shouldn’t ;get away with it.) The post office lost $16
billion last year, despite having all sorts of advantages that most
private businesses don’t have.
They have a near monopoly on first-class mail delivery. You want
to deliver something to someone? You better not put it in their
mailbox — that’s illegal. The U.S. Postal Service doesn’t pay
sales tax or property tax. They don’t even pay parking tickets.
With advantages like that, how do they lose money?
They are part of the government, under the thumb of Congress,
and that invites calcified, inefficient behavior.
“We are expected to operate like a business, but Congress has
not allowed us the flexibility to operate like a business,” said
Postal Service Board of Governors Chairman Mickey D. Barnett on my
TV show. It’s all “part of being a quasi-governmental entity.
That’s how the cookie crumbles.” Barnett added that the post office
has “union contracts that have no layoff provisions.”
Reality is at odds with the proud claim on the post office’s
website that “Since Ben Franklin … the Postal Service has grown
and changed with America.” But it’s barely changed. You don’t tend
to see change in “quasi-governmental entities.” You see
stagnation.
This year the post office tried to limit Saturday delivery to
save money. But Congress forbade the change. The politicians’
constituents like getting their mail six days a week.
“They don’t want a cut in Saturday delivery,” Rep. Alan Grayson,
D-Fla., told me.
“The USPS does need reform,” Rep. Sam Graves, R-Mo., told the
Kansas City Star. “However, reducing core services is not a
long-term plan. I worry that reducing services will lead to other
reductions like closing rural post offices.”
But the post office should do both. The government maintains
hundreds of tiny local post offices, each of which brings in less
than $700 a month. Running those offices costs much more than that.
Some are just one mile away from other post offices.
People like “universal service,” which has been taken to mean
that every American must get mail service, no matter how deep in
the boondocks they live. The post office even hauls mail by mule to
the bottom of the Grand Canyon.
“The post office provides something that’s extremely valuable
and has to be maintained, and that’s universal service,” Grayson
told me. “There are countries a lot poorer than the United States,
including the Congo … that try to provide universal mail service
to everybody. … People don’t want post offices closed!”
On the floor of Congress, Sen. Al Franken, D-Minn., proclaimed
that universal service is required, saying, “It’s in the
Constitution.”
But it’s not. The Constitution says, “Congress
shall ;have the Power ;to … establish Post
Offices.” But it doesn’t have ;to use that power.
Cato Institute budget analyst Tad DeHaven argues, “People living
in rural America aren’t living there by force. … Go back to
history. Private carriers picked up the mail from the post office
and took it the last mile, or people came to the post office and
picked it up.”
And private alternatives are much better today. We have e-mail.
UPS delivers 300 packages a minute and makes
a ;profit. Federal Express, UPS and others thrive by
finding new ways to cut costs. They don’t do it because they were
born nicer people. They do it because of the pressure of
competition. They make money — while the post office loses $16
billion.
Why not just privatize it? No more special government
protections, no limit on competitors offering similar services.
Then mail service would be even better than before. The market
delivers. … Read More