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09/04/2011

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Mitchell K.

Posner proposes a three stage reform for the postal service. The first and second stages are basically sound although one wonders why selling the post office to a private enterprise seems like such a priority to both Posner and Becker when Posner acknowledges that "the buyer would be more strongly motivated than government to seek economies, but not a lot."

Perhaps it is because of the third stage of Posner's proposal that calls for the postal service to "be open to competition" and removing some legal restrictions related to remote area delivery and so forth.

The natural monopoly characteristics of the postal service suggests that a selective outsourcing of certain functions might be more workable than open competition. Furthermore, Posner makes note of the network externalities associated with the post office monopoly on letter mail but he does not elaborate much on how those positive externalities might be eroded by competition.

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Your Honor,

This reminds me of when the United Kingdom sold off much of their public transportation assets. Many of the economic arguments you present were considered back then. For the good of the nation, they made tough decisions and moved on.

I agree that we should sell off the Post Office. It is riddled with inefficiencies such as labor relations issues. For example, each day I review the list of NLRB petitions and charges and it is sad that the Post Office labor unions file hundreds of Unfair Labor Practices each year.

As you point out, there is a sticky constitutional issue that I hope our folks in DC can work out.

Thanks for another great article.

Regards,
Chuck

Jack

Seemingly mindless "Chi school" "policy".

"The postal service is hobbled in competing by its universal service obligation, which requires it to maintain post offices and fleets of delivery trucks in remote areas of the country that generate little in the way of postal revenue, and to pick up and deliver mail six days a week."

............. and you'd propose????? Those where it's "not profitable" to deliver the mail to do what? Often, through out our history of "manifest destiny" our pioneering regions were "losers" for roads, mail, phone lines, and today, broadband, and with high fuel costs at risk of losing un-subsidized air service.


And since email, fax, and Federal Express service are available everywhere, the case for subsidizing postal service to remote areas is weak.

.............. Well, truth is they are not universally available.

The federal government could no doubt sell the postal service, just as states are busy selling turnpikes and bridges.

........... hmmm, and a business that either breaks even or loses money IF universal service is mandated is worth what to whom? Oh....... I see the idea is that of cherry picking the juicy parts and either spinning off or casting off the "hard to serve" sectors? Shall we ALL be forced to move to the city and nearby suburbs?


If it sold it subject to the buyer’s assuming the universal service obligation, it would have to convey along with the postal service's physical assets its monopoly protections against cream skimming—the monopoly of first- and third-class mail and exclusive access to post boxes. But then little would have been achieved by the sale—not nothing, because the buyer would be more strongly motivated than government to seek economies, but not a lot.

.......... Indeed. And perhaps not EVEN more motivated.


On Posner's "reforms": If one day is to be dropped from the schedule perhaps mandating "Saturday" isn't the best idea as mail would have two days in a row to pile up and congest the intermediate distribution facilities. Also in many areas the mail contract subsidizes passenger air travel, thus chopping "Saturday" might reduce the offsetting passenger revenue. Better? Pick at local level the 4 or 5 day service.

As for "doubling postage"? Probably foolish. Consider, the small rural areas are a small, small percentage of the overall mail delivery task. So we'd ADD more confusion to the public, adding more trips to the PO "to be sure of getting it right" more sorting and of course more sending back for more postage.

No........ the RIGHT direction as all Ebayers know is that of fixed rates for standardized boxes that saves time for all concerned. In fact they should provide larger "std boxes" than the current 12 x 12 and smaller. Consider, both shipper and buyer then understand and can advertise "std 10.95 postage" for the article that fits that box.

Oh, and Chuck? The day after L A B O R D A Y is hardly the day to illustrate your lack of understanding American labor issues with "riddled with inefficiencies such as labor relations issues." As many know private industry too has to deal with "pesky" "labor issues".

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Universal Service? A thing of the past if the USPS is done away with and mail delivery is privatized. I remember one phrase from a German Officer in the Wehrmacht from a memoir, "We knew the War was lost when we discovered a box containing a homemade chocolate cake from some mother in a little town in the Midwest that had traveled over some 7,000 miles and made it to the trenches in the frontlines and we couldn't even get basic supplies from a 100 miles away". I can remember getting a box of peanutbutter cookies from my Grandmother in Ohio while I was in College in Illinois via the USPS. Although, they got to me as crumbs. I'm still looking for that "rat" in the University Mail Services...

Terry Bennett

We can debate the rate at which the post service is becoming obsolete in the face of new technologies, but it IS happening. This is no mystery. An appropriate management response to a structural drop in demand is a structural drop in supply. The service is still possibly necessary, but it is not crucial. Mail can come one day later and the world will not self-destruct.

So, suppose we move to a system where smaller, more rural post offices, the source of most of the losses, are open every other business day: MWF one week, TR the next. Full-time counter and route staff could thus run two post offices. If you really need to mail something in a hurry, go to the next town over where the post office is open that day. If you aren't willing to do that, do a better job of planning ahead.

I'm a lawyer in a semi-rural area, with no door-to-door service. Yesterday I went to my postal drawer for the first time in two days, and it was full - of nothing that couldn't have continued to wait. No letters from other attorneys (we use e-mail and scanners), no bills (all paid on-line), just solicitations (a dozen nick-nack catalogs for my wife, a few credit card offers, etc.)

Maybe it's nice to get a physical birthday card, but is it important enough that the government should be able to reach into my pocket to fund that warm fuzzy feeling you like to feel when your grandchild scribbles something in crayon and sends it to you? I do not believe it is, and I vote not to use my tax money to subsidize it.

Jack

Well Counselor, perhaps good in theory, but here in Alaska I'm familiar with a number of small town PO's. While some of your suggestions MIGHT work "scaling down" is often as tough or tougher than scaling up. Some PO's have but ONE person while others may have a couple doing different tasks, like running the front counter while another handles heavier back room intake and sorting.

So........ are we likely to find those who can afford to work three days a week?

On the other hand........ in my longer view, we're well past the time when we should have adopted a shorter work week so as to spread out our limited work.

As for "most of the losses" perhaps the rural offices do lose more per letter or pkg delivered, but they are also a smaller, percentage, part of the overall problem.

As the mail contracts often subsidize air, boat or other service we'd want to consider what cutting would mean to those towns.

Norway...... after WWII realized (or thought) that rural population added to their security from neighboring expansionists, so encouraged fish farming and other programs meant to increase rural population. We have a declining rural population and may want to consider whether that is a good trend.

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Terry Bennett

To follow up with Jack, my comment of 9/10 was suggesting a reasoned step toward the inevitable obsolescence of the post office, by cutting the number of rural route employees in half.

I.e., John and Joe are two mailmen walking routes. We fire Joe, and John remains a full-time employee. John then walks his own route MWF, and Joe's route TR; the next week, he walks his own route TR, and Joe's MWF. I guess I didn't say that clearly before.

Like Jack, I live among several post offices staffed by one person each. I can envision pairing them up as I described above, with each one closing every other day, and firing half the staff. We're still stuck with all the buildings for a while, till the next reduction in service in parallel with the continuing drop in demand, maybe 10 years from now, but at least buildings do not collect retirement and health benefits.

One important benefit of this approach is that it preserves universal service, which is what we were discussing in the first place. If the NYC post office goes out of business it will create no disruption at all, because UPS will gladly provide service to every address there. Not true in Alaska which is an outlier, in every sense, and may need special consideration and a more tailored solution.

The USPS carries less mail than it once did, but more to the point it carries far less mail of any importance than it once did. It may at some point, now or in the near future, be more of a service to our rural citizens if we ensure universal Internet connectivity instead of universal mail service. (It may also be cheaper.)

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