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May 9, 2012
IS THE POST OFFICE REALLY BROKE?
Arshad M Khan
There are two types of news items that come to mind whenever the Post Office is in
the news: Some postal worker has gone berserk, and shot up his fellow workers -- in
fact the term 'going postal' describing like events is now part of the vocabulary -- or
the Post Office is going broke. Is the Post Office really broke? If so, why? And is the
Post Office even necessary in the age of cell phones and email?
The Post Office has a long and proud history. Not for nothing are its slogans on mail
delivery (through hail and sleet and snow) now part of language, and the institution,
part of our culture. In small rural towns, it is often a meeting place -- to exchange
news, gossip, or just to say 'Hi!' to distant neighbors. It used to provide a savings
service (1911-1966) paying out interest on deposits, which together with postal
money orders was adequate for the banking needs of many. But the savings
accounts went, thanks to the banking lobby. Japan, by the way, still offers post office
savings accounts contributing handsomely (greater than stocks/bonds) towards
making it a nation of savers.
For almost two centuries, the Post Office was an arm of the government, and its head,
the Postmaster General, a cabinet officer duly appointed by the President and
confirmed by the Senate. Considered an important enough institution to be
authorized in Article 1 (Section 8) of the Constitution, no less a figure than Benjamin
Franklin was the first chosen (in 1775) to lead it. And so it remained -- a branch of
the Federal Government -- until 1971 when Nixon sent it into semi-corporate limbo as
a government agency overseen by a Board of Governors. As is often the case with a
government department run by ardent privatizers, their real goal is the reduction and
diminution of its purpose and function, not of maintenance and preservation. So it is
with the Post Office.
The last blow, which it is still reeling from, was Bush II's Postal Accountability and
Enhancement Act of 2006 requiring it to escrow the healthcare benefits of current and
prospective employees for the next 75 years. This onerous requirement added to
retirement benefits puts the Post Office into loss despite profitable operations, and
despite the fact that it has never had to go to the taxpayer for a handout -- unlike
banks, auto companies, farm conglomerates, oil, mining, etc. To make matters worse,
the Post Office has been overcharged to the tune of $80 billion by the Civil Service
Retirement System. Add it all up, and the so-called $13 billion loss over the last four
years melts away.
Why is one not surprised that the Post Office is set standards for accounting
healthcare costs unheard of in the private sector, while the banks have had rules
specifically changed in Dec 2008 to permit them to maintain worthless toxic paper on
their books at purchase price, instead of marking it down to market and realizing the
loss? These days, we know who has the clout in Congress and the Executive branch.
Also, of course, the Post Office is a rich, fat goose waiting to be plucked.
Thus the push and pressure on the Post Office. Aside from the ideologues, who,
despite the chaos wrought by the banks, believe fervently that government institutions
and regulations -- even those that (like bitter medicine) benefit them -- are bad per
se, there are huge profits to be made. Think current bank charges and credit card
interest rates, think what UPS and FedEx could charge without competition, and don't
forget the profits that await whosoever takes over the Post Office. You can bet your
bottom dollar they will not be funding healthcare 75 years ahead for people they have
yet to hire.
The Post Office gives us home delivery and pick-up; in most instances it is cheaper
than the private competition. It has been, over the centuries, a source of middle class
jobs with decent healthcare and retirement. Why give up a good thing? Email is
never going to deliver Mom's cookies to the out-of-town student.