(Fred Weinberg/The Penny Press) – I spend a lot of time driving in rural Nevada, and when I am out of the range of one of our radio stations, I’ll admit that I have a satellite radio in my vehicle.
Three channels are preset. Fox News, NASCAR and C-SPAN.
Last weekend, I had a long drive and was able to hear, on C-SPAN, the entire Senate hearing dealing with the United State’s Post Office’s current difficulties. It was, frankly, more interesting than the Sprint Cup race for the Chase this year.
In case you haven’t heard, Postmaster General Patrick Donahoe has asked Congress for help because, as he put it to the Senators, “any normal business operating in our condition would be bankrupt.”
Here are the facts.
The Post Office, which was designed in an era long, long ago, is broke. It is a $62-billion (with a B) a year enterprise running with one week’s cash on hand.
First Class mail is becoming extinct. People, for the most part, don’t write letters in longhand anymore and they pay their bills electronically. And companies would much rather bill you electronically than by mail.
I cannot tell you how many financial companies I do business with that won’t let you on their web sites until you agree to electronic billing.
All of this spells the end of first class mail as we know it.
Now, while the Post Office is broke, it happens to have a legal monopoly on physical first class mail. Just like IBM once had a monopoly on computers and AT&T once had a monopoly on land-line telephones.
There is a difference. IBM and ATT got their monopolies because of invention, innovation and ingenuity. The Post Office got its by force of law.
It really doesn’t matter how you get a monopoly, however, because one thing eventually destroys all monopolies—technological progress.
Monks used to hand letter bibles until the printing press rendered them obsolete. And after years of progress, printing presses are having a tough time with electronic books.
So now, the Post Office is not only losing business to technology, but, by its own admission, it has at least 120,000 more unionized employees than it needs, a $58-billion unfunded retire health care liability and it loses money every year.
Yet nobody in Congress is asking the basic question, which is: If the Post Office disappeared tomorrow, would private enterprise pick up the slack?
Why, for instance, does the Post Office compete with Federal Express and UPS in the package business? If there were no monopoly in First Class mail and no Uncle Sugar to prop up the Post Office, would a private company seize the business opportunity?
Of course, I have left out the issue of the Post Office’s most profitable customers—you and me.
Without bulk mail, such as newspapers and magazines, could the post office even stay in business under any circumstances?
And, if they were gone, do you think that newspapers and magazines would go out of business, or do you think a national delivery service might get into the business with non union employees?
Isn’t it a reasonable assumption that something styled after Federal Express’s ground operation, where delivery people are independent contractors and buy their own trucks, might come to life?
The Post Office is in trouble for the same reason many businesses get into trouble.
Technology has removed much of its reason for being.
Can private enterprise can do it cheaper and better than the better part of a million Federal employees?
Those are the real questions that the Senate needs to be asking.
Not whether or not they should market the art of letter writing as Missouri Senator Clair McCaskill actually asked.
The big question here is whether or not we need a Federal Agency to do what the post office does, or should we just close it down and let private enterprise fill the vacuum.