US Postal Service: a public employee pension and healthcare management organization that delivers ma

Things are so backwards from where they once were. It used to be that the Post Office served the taxpayers. GM used to build cars that people wanted to buy. State government was set up to protect taxpayers. In all of the above cases, those notions have been turned on their heads. The Post office now primarily serves its employees and their unsustainable pension obligations. Same with GM. Same with the state government. As was pointed out not long ago by Mark Perry:

A quote from a few years ago: "If you're not familiar with General Motors, it's a health care benefits management firm that sells cars for a loss as a side venture."

Updated version: "If you're not familiar with the state of California, it's a public employee pension management organization that runs a state on the side with a large $19 billion deficit."

Add to that the US Postal Service (USPS), which is now essentially a public employee pension and healthcare management organization that delivers mail on the side with a large $33.5 billion deficit. This year, the USPS is set to lose another $7 billion that it doesn't have because it is entirely paid for by the taxpayer. The USPS is also faces $54.8 billion in unfunded retiree health and pension obligations and we are on the hook for that too. It will be paid by the bankrupt federal government that continues to spend more that a $1 trillion over what it has every year by borrowing from foreign countries that don't necessarily like us and printing money that devalues our currency. Did I mention that we are $100 TRILLION short in liabilities for social security and Medicare? Doug Bandow has this great piece on the USPS that was picked up by the Oakland Press: Postal Bankruptcy: U.S. Postal Service drowning in debt and out of lifelines

...In early July, the post office, which can hike rates on its own if the increase doesn't exceed the inflation rate, filed for a special increase of two cents for first class mail and varying increases for other services with the Postal Regulatory Commission. The commission rejected the hike in September, ruling that the Postal Service's problems were structural, rather than a result of the recession. In any case, raising rates won't save the Postal System.

The USPS is in crisis. It is locked in a declining market. It can only survive with indirect taxpayer subsidies and a ban on private competition. Instead of forcing Americans to pay more for less service, Congress should open mail delivery to all comers.

Article 1, Section 8 of the US Constitution gives Congress the power (one of 17 enumerated powers) to establish a Post Office. But:

...Congress is not required to institute government mail delivery, let alone a public mail monopoly. Today there is competition only in packages and urgent delivery. For regular mail, you must use the USPS, or else.

It's interesting to note that packages delivered to your local Post Office are outsourced to UPS or FedEx. Natch. I gotta think that either of those two would do way better with regular mail delivery too. But it's not about value added to the taxpayer. It's about maintaining the public employee healthcare and pension benefits. And the USPS will defend its turf:

In 1844, for instance, the noted libertarian Lysander Spooner set up a low cost delivery service among Boston, New York, Philadelphia, and Baltimore. Congress responded by imposing fines on private mail carriers. More recently the post office threatened to sue Boy Scouts who proposed delivering Christmas cards during the holidays. When the USPS learned of companies sending international mail abroad with traveling employees, it demanded payment for services not rendered.

All the while postal rates steadily rose, more than 50 percent faster than the rate of inflation. A first class stamp today would cost 27 cents rather than 44 cents had rates merely matched the inflation rate since 1960. In contrast, bulk mailers enjoy artificially low rates due to the political clout of these businesses.

As with other taxpayer-funded monopolies, the money on the inside stays on the inside via corruption:

The post office also takes care of its own. In September came revelations of no-bid contracts to former postal executives for "knowledge transfer." One former vice president received a $260,000 contract to talk to the man who replaced him.

In short, the post office has a "customer last" philosophy. Americans exist for the postal service, not the other way around.

And that, ladies and gentlemen, is the key nugget of that article. There' more good info there (such as: since 1971 the post office has lost money in 24 of 38 years, the USPS workforce is over 700,000, the average USPS salary is $83,500 making postal employees among the highest paid semi-skilled workers around, there are 36,500 post offices in America - 26,000 of which lose money - which is more than the combined number of Starbucks, McDonald's, and Walgreens, but the average number of weekly postal customer visits was 600, or one-tenth the average at Walgreens alone) so I recommend reading the whole thing. Meanwhile, the Post Office wants to get paid all its money but deliver mail fewer days. As I wrote in August: Postal workers to protest 5-day delivery plans at Detroit rally, union prez: "ending Saturday mail service would slow service, drive away business and lead to the demise of the world's most efficient, affordable and trusted postal system". The Post Office is efficient and affordable? Even Obama would laugh at such an assertion. In fact, he pointed out last year that the Post Office "always has problems" relative to private companies like UPS and Fed Ex:

If Congress were to take away the Post Office's monopoly on first class mail, I bet that private companies would do far better in delivering it. And did you know that the Post Office contracts with private carriers for its packages? What does that say about "efficiency?" The Post Office doesn't know what efficiency and affordability are. Speaking of UPS and Fed Ex, that reminds me of this from last year: Video: UPS vs. FedEx

As usual, powerful unions are in the middle of the problem.

http://theblogprof.blogspot.com/2010/10/us-postal-service-public-employee.html

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