God help those who do not help themselves.
Wilson Mizner
The USPS: No More Government Bailouts:
Time to Privatize
This commentary will not go over well among my relatives: there's a member of my family whom once worked for the USPS.
Before going into specifics of the commentary, everyone has their fair share of postal horror stories. I'll just summarize 3 of mine. [9/16/11 edit: An earlier version of these incidents appeared in an August 2009 post when Obama was using the USPS as a model of public sector competition. There are some subtle differences (i.e., supplemental details between writeups); when I wrote last week's version, I didn't recall the earlier post discussion. The incident writeups were not salient to the core points of either post; they were there to provide personal testimony regarding consumer dissatisfaction with a government-protected monopoly on local mail delivery. I was more interested in the "fair competition" and business models (with a fiat currency printing press, massive deficits, unsustainable personnel compensation and intrinsically uncompetitive collective bargaining agreements, never mind glacial bureaucratic responses to market condition changes and trends).]
When I was a UTEP professor, I had ordered a piece of PC software with a money-back guarantee via direct mail (Internet downloads were in the future). The software didn't work and I exercised my option to return the software for refund, mailing the package back insured. Long story short, the vendor, probably lying, insisted they never got the package and refused to process the refund--and ignored any further communications from me. The Post Office wasn't satisfied with the communication I received from the vendor saying they hadn't gotten it. It was MY responsibility to get the vendor to sign a form certifying, under threat of prosecution for fraud, it had not received the package. I pointed out that the company had refused to respond to any communications with me--what leverage did I have to get them to voluntarily sign something that might get them prosecuted? I insisted this should be between the vendor and the post office; I was not a party to the delivery attempt, so I had no way of knowing what happened at the end of the delivery chain. Presumably if the USPS gave me some evidence it did deliver the return package, I could force the software vendor to process the refund. But if the USPS was at fault, I needed to recover from my postal insurance. The problem was that both companies insisted the burden of proof was on ME to prove they were at fault for failing to complete my paid delivery transaction several hundred miles away. I couldn't get a definitive written statement as to delivery status from either party.
I was at an impasse at the front counter at my local post office when one of the postal supervisors came to the front to usher me to his back office so I wouldn't disturb the other patrons. First word of advice--NEVER do something like that: no witnesses! It's your word versus theirs, and guess whom the authorities are going to believe? The conversation in back, originally one-on-one, went exactly the same as in front: it wasn't their problem--it was mine to get the vendor to sign the form. About 5 to 10 minutes into the meeting--I remember the Latino supervisor and I weren't seated but standing, when a group of about 6 to 8 Latino postal employees entered the room behind me in a semi-circle. I did find their presence somewhat intimidating and didn't know why they were there. The supervisor, to the best of my knowledge, hadn't called them in; we were having a disagreement, but he hadn't requested me to leave. We continued to have our argument when all of a sudden I felt a hard punch to my kidney from behind me. I whirled around to confront the criminal whom not only assaulted me but did it behind my back, but of course all of them denied it ever happened.
I filed a complaint with the USPS regarding the criminal assault by one of their employees (unfortunately, I didn't have eyes in the back of my head to identify the coward whom attacked me), and I got a lip-service written apology (you know, 'I'm sorry you think you were assaulted'). I never thought it was racially motivated, but I lost a lot of respect for postal worker integrity. To follow up on the original context of the story, the Post Office finally agreed to take the initiative on looking at what happened to the delivery, and I seem to recall a few weeks later, the vendor suddenly "discovered" the returned parcel and processed the refund.
But this is precisely the kind of incident that points out what Doug Bandow recently wrote:
In short, the post office has a "customer last" philosophy. Americans exist for the postal service, not the other way around.EXACTLY! This also applies to other government functions as well; I have written several posts talking about usability issues in government. As a professional DBA, I always investigated seriously user complaints, almost invariably wrong at face value (users tended to scapegoat the database for software or network related problems--my favorite story was when this new user was creating every other invoice blank; his supervisor hadn't noticed anything wrong with what he was doing, but I immediately caught the problem: he was double-clicking instead of single-clicking the relevant screen button); I invariably followed up with users having experienced a problem. This was not a requirement from my boss; it was something I did as a professional.
Other examples: I had once spent money on a nice jewelry box with stained glass on the inside. I sent it regular parcel post. My mom got her gift to find the stained glass all shattered during delivery; my dad told me I should have known better and sent it first class, because then it would have gotten more professional care.
My final example: My mom about 2 or 3 birthdays back had mailed me some unique, irreplaceable gift package but had specified a delivery mechanism which would not allow my apartment office to sign for me (a delivery mechanism I had warned her against multiple times in the past). The incompetent postman somehow lost the package (to this day it has never surfaced) but reacted in a particular defensive way, resulting in a feud between us; I think I was trying to get confirmation that the apartment complex never signed for the package because the post office couldn't find it although their records showed they received it back from the carrier. The apartment management thought it was some expensive item they didn't want to accept responsibility for and didn't want to be in the middle of a hassle between a tenant and the Post Office; they temporarily refused to accept packages for me, the notice of which the feuding deliverer, whom had specifically gone to the apartment management to tell them HIS side of the story resulting in their decision, gleefully left in my mailbox. If you work for a living, that's a hassle. I remember the first time I went to pick up the package; the small post office was in downtown (with about 8 parking spots for customers). After waiting 45 minutes in line, I was told they didn't hold packages there (which you would think they would put on the item notice). I had to call some number. And that wasn't the end of it. Now my mom needed to try to collect on the insurance, there was fingerpointing between source and target post offices, there were delays while they continued trying to find the package. And it caused friction between family members, because the item, whatever it was (I still don't know), wasn't worth the hassle.
I'm sure readers have other examples, but let's get some details out of the way: the USPS is the second largest employer (next to Wal-Mart)--over 700,000 and an average $83,500/year (for semi-skilled labor!); about 80% of the costs are labor. How important is this? CATO notes if we were pricing stamp costs against the cost of living since 1960, the price of a first-class stamp today should be 27 cents versus 44. Bandow points out the USPS has liabilities of over $33B and unfunded retirement liabilitiesof $55B. They will lose over $9B this year and are close to defaulting on a $5.5B payment due this month; their volume has dropped over 20% in the past 5 years and expecting to drop at least another 20% by the end of the decade. The USPS gives preferential treatment to bulk mailers and is largely exempt (unlike UPS or Fed Ex) from taxes, regulations and even parking tickets. Union contracts ban or limit layoffs, outsourcing, contract work, or part-time work.
Yes, the USPS is specifically established in the Constitution, BUT NOT IN THE FORM WE SEE TODAY (see the CATO citation for more details). One analogy is comparing the traditional post office as a warehouse/wholesaler versus a retail outlet. The basic model was intercity (NOT intracity, e.g., home) delivery along established postal roads between cities (or defined foreign routes). Intracity monopolies were established by statute (in 1872), not the Constitution, and, at minimum, should be repealed. The expensive household/retail delivery model as operated by USPS is simply unsustainable; over two-thirds of over 36,000 post offices run at a loss (more locations than popular fast food or pharmacy networks), even though the post office serves a mere fraction of the customers you see in a number of retailers, like Walgreens.
The CATO piece lists a long number of other countries which have opened up the retail delivery market: in fact, some privatization in the European Union should occur by late next year, and several countries in the east European region have some mix of private-sector mail delivery.
In short, the USPS is the poster child for bloated federal government run amok. No more bailouts for failed business models! Let's get rid of the USPS or, at minimum, limit it to its traditional mandate of intercity transport and jettison morally unjustifiable, corrupt labor contracts.
Political Humor
"Mitt Romney revealed a 59-point job plan at a big auto dealership. That shows you how smart Romney is. He knows that a politician only looks honest when he’s standing next to a car salesman." - Jay Leno
[Romney has a job plan for each of Obama's 57 states, and then he's writing reference letters for Obama and Biden.]
"According to the latest poll, a record 73 percent of Americans think the country is headed in the wrong direction. But the good news: Gas is so expensive that we’ll never get there." - Jay Leno
[Well, as soon as Obama drove the car out of that ditch, he didn't stop to ask job creators for directions along the way.]
Musical Interlude: My Favorite Groups
Air Supply, "Even the Nights Are Better"
