What Should Become of the USPS?

235-year-old system dates back to Ben Franklin

Friday, December 03, 2010

The current Postmaster General is retiring this week with a nearly $5.5 million retirement package. The U.S. Postal Service has lost over 100,000 jobs and about $8.5 billion over the past decade. The numbers do not look good, and as electronic communication leeches away more and more business, they're not expected to improve. So, what should be done with the USPS?

Postal Service carrier Bill Kirby calls in from his post office in Massachusetts, and Tad DeHaven, a budget analyst for the CATO Institute, shares some of his ideas.


Tad DeHaven and Bill Kirby

Comments [17]

Bob Gardner from Randolph, MA

Express mail is very profitable for the USPS because most of it can be delivered by regular carriers. Eliminating it would cost the USPS money, not save it.

Dec. 05 2010 05:58 PM
Scott Petersen from Omaha, NE

1) Residential Mail delivered every other day. Group 1 on MWF, Group 2 on TTHS. How many of us really need our residential mail delivered every day?
2) Get USPS out of overnight delivery. Does anyone think they can do it better than FedEx or UPS?

Dec. 04 2010 11:07 AM
Libertyscott from London, UK

One of the abiding problems for some in the US is to fail to see the experience in other countries. The US is seen as a socialist dinosaur by most other OECD countries in the postal sector. The debates raised by others in favour of the status quo are old hat elsewhere, and everywhere where postal services have been deregulated and privatised standards have improved and prices kept low. I know this because I originally hail from a country that did this (New Zealand) with reforms that started 23 years ago.

Postal services have been opened up to full competition in numerous European countries, as well as countries as diverse as Argentina, New Zealand and Malawi. Privatised postal operators thrive, such as Deutsche Post, once a government owned monopoly, now a successful global logistics business.

I spent five years working in postal policy and interacting with regulators in many countries, the formula for success is:
- Commercialise the encumbent, let it start or drop any line of business except a universal service obligation, let it raise and lower prices as it sees fit;
- Open the whole postal market to competition, you'll be surprised that there can be many small entrants in towns as well as big entrants (New Zealand has quite a few local postal operators);
- Set up the universal service obligation for a transitional period;
- Sell the encumbent (USPS) setting it free to enter into courier/logistics markets.

Dec. 04 2010 04:53 AM
Rob from Iowa

Larry, SoFl,

I share your thoughts. To continue your thoughts on free markets, and to go a bit on a tangent, I agree with the "left" when they rail against the big corporations, yet disagree with their means for combating them. To often it is the populist battle cry of the American "left" to "get" and "regulate" the "big, evil US corporations". Yet "big corporations" welcome regulations because they can afford them and simply pass those costs on to consumers, yet most importantly, it prevents small companies from providing any competiton to them. Regulations make it darn near impossible for any new small competitor to enter a market. Hayek addressed this concern in "The Road to Serfdom". The "bracing wind of competiton" is one of the chief means to insure liberty for us citizens.

And I can understand why privatization scares people. Because as more and more government services are defered to the private sector, liberty will expand, yet with more liberty go increased responsibility. Responsibility to neighbor, etc.This scares people. Cuz after all, all government demands is obedience and many Americans are confortable having someone else make decisions for them. I agree, it is seductive.

Dec. 03 2010 02:09 PM
AJ from Las Vegas

Bob, you couldn't be more wrong. FedEx has been lobbying for nearly two decades to be ALLOWED to deliver mail, and in 1992 proposed a plan whereby it would be required to deliver to every address in the US (which USPS does NOT do) and would deliver mail coast-to-coast in 2 days for 7 cents a letter (11 cents in today's money). Thus, ending (or privatizing) the USPS would BEGIN universal mail service. Congress declined, so as not to be voted out by postal workers, so we're stuck with the demonstrably overpriced (44 cents versus 11 cents), slow, rude, inefficient and non-universal tax sucking entity known as USPS. (And yes, the USPS does get tax money, loaned to it by the Treasury and never paid back, so it can say it isn't tax supported---it's just getting "loans").

A government enterprise, providing a service a non-market rates, cannot, by definition, provide "competition," and, as a monopoly, cannot be competed against. I would suggest you take some basic courses in economics and perhaps history, as your ad hoc "this is what I feel" "argument," based on incorrect assertions of fact, are nonsensical.

You simply don't know what you're talking about, as evidenced by your assertion that health care is a luxury for the rich. Simply not true.

Dec. 03 2010 01:07 PM
Larry from So FL

It is amazing how terrified Americans are of free markets. This is particularly surprising when the companies that absolutely destroy the USPS in competition are entities arising from the free market. Ditto the technology companies that have created new ways of communication and have done so at prices anyone can afford.

Supply and demand, and a concomitant accountability to the consumer - these things will produce better solutions that would quickly allay the knee-trembling of the frightened socialists.

Dec. 03 2010 12:57 PM
Rob from Iowa

The cost for all other data has decreased, while the price to mail a letter has increassed over these past 30 years. People are afraid of "any" discussions because it upsets what they are used to. Is the USPS even needed. I can pay all my bills digitally, all that leaves is junk mail and ads, which I could probably receive digitally as well if I choose to register with the sites that I do business with.

Jessie, NJ, you comment is demeaining to people of color. You imply that "people of color" cannot compete. I reject that.

Dec. 03 2010 12:29 PM
Mary from St. Paul, MN

Unfortunately the Cato Institute does only surface reporting as do many other news organizations. The real story is that the Postal Service was set up for mail delivery for the masses. It is not funded by the government but the Feds institute rules that cause it to lose money, thus they are deep in debt presently. They are quasi-government, meaning they do not get money to run the business. There has been talk of privatizing the Postal Service for many years. I tell you one thing: when that happens, your first class mail is going to probably be twice as expensive, in order to mail to all locations. Of course, private companies could cost the heck out of less desirable routes, such as 60 miles outside any city, the cost would be far higher than cities. Do people really want that kind of mail service? I doubt it. Another thing, mail will take far longer than it does now, if privatized.

Dec. 03 2010 12:20 PM
Stuart Berman from Grand Rapids, MI

I think the answer lies in the middle. The postal service needs to drop home delivery as a standard service and use their transportation system and post office locations to deliver mail from postal station to postal station. Businesses and consumers can go to the post office locations to pick up their mail as often as they choose and keep the office open 24x7. Also place huge recycling bins near the mail drops so we can toss the junk mail directly into the recycling bins.

Dec. 03 2010 12:12 PM
Lysander Spooner

Shoulda listened to me...

Dec. 03 2010 12:07 PM
Bob from Seattle

To privatize the Postal Service will end universal mail service. It will also end competition. It is only because the Postal Service creates a baseline of affordable, universal service that UPS and FedEX are forced to come up with innovative and competitive products. But if those companies aren't kept in check by a government service, personal mail will become a luxury for millions--sort of like health care is now. Which I guess is what the Cato Institute likes. But where is the conservative voice pointing out that the post office is mentioned in the Constitution as a specific governmental responsibility? It shouldn't be too radical to say, "let's keep it that way."

Dec. 03 2010 11:03 AM

Sorry I referred to the Takeaway as an NPR product; it's not. It's the joint venture of WNYC and PRI with the collaboration of WGBH, the BBC, and the Times.

Dec. 03 2010 10:24 AM
ill wind from Guilford, CT

The hostility of your male host to Tad DeHaven was amusing. " You guys from Cato freak me out ! "

Oh really. Let's see how you react to defunding.

Dec. 03 2010 09:52 AM
BigGuy from Forest Hills

Look how well loosening and not enforcing financial regulations worked for our country under George W Bush. Look how well the market does things WITHOUT government enforcing the law.

Privatizing the USPS would work every bit as well.

Please stop having speakers from the Cato institute and their ilk. Please have speakers who espouse how the government can HELP AND IMPROVE our lives.

Nearly all of you at NPR and many at WNYC accept the cant of the Right because you have heard so long and so often you believe it to be true, but it is not.

Dec. 03 2010 09:48 AM
Robert F. from Newton, MA

It's the Postal SERVCE, it's NOT a corporation, and was never intended to 'make money'.
It's the only service that all citizens receive equally in their community and at their doorstep.

Should we insist that all other government agencies support themselves?!!
At-least this service makes SOMETHING to support itself!

-this is 'stupid talk'.
Don't get sucked into these kids of stories.

(I don't work for the USPS.)

Dec. 03 2010 09:31 AM
Jessie from NJ

In the discussion of whether or not it's a good idea to privatize the USPS, I think it's important to remember who is generally most affected by privatization - people of color and women who hold most of the jobs that would likely be eliminated in a downsizing or streamlining effort.

Dec. 03 2010 08:15 AM
Peg from NY

In the infancy of the internet, we enjoy the ease of digital communication. However, as the "infant terrible" matures, I think that cyber terrorism will become more and more powerful. I'm not sure that we'll want to conduct all of our correspondence and commerce in that type of environment. (See Margaret Atwood's 'The Year of the Flood' and MT Anderson's 'Feed' for fictional examples of where we might be heading.)

Dec. 03 2010 07:49 AM

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