Nice to Have versus Need to Have ... Postal Service is Neither

Wants and needs are two different things. Sometimes we have to separate things that would be nice to have from things that we need to have.

The desirable from the necessary, in other words.

But what if the thing for which we're paying is neither nice nor necessary?

I'm referring to the post office and the large reduction of customer directed first class mail volume (Junking the Junk Mail Office), coupled with the focus on increasing junk mail deliveries, even though most customers don't welcome these deliveries. And even if some customers do want junk mail delivered, they aren't willing to pay what it costs.

Post Office's Rescue Plan: Junk Mail tells the story about how the postal service is trying to increase the junk mail delivered to your mail box each day. First class mail is down, and the postal service is promoting junk mail at a discount to commercial bulk mailers in an attempt to increase its revenue as expenses continue to outpace receipts by billions of dollars each year.

But there is simply no good reason to continue the postal service, when viewed through taxpayer eyes. E-mail costs zero and the internet, newspapers and such can be used for looking at political ads, retail solicitations, credit card offerings and the like.

In other words, the taxpayer seems to be doing fine using e-mail, UPS/FedEx deliveries and other "new fangled" ways of communicating in place of snail mail. So let's just shut down the post office and stop the losses. Besides, the service never was that great anyway, even before e-mail and the like.

That's exactly what we would do if we were 'free to choose' between paying the total cost of operating the postal service and not having such a service. The operating costs will exceed revenues by billions of dollars again this year, and we have an additional huge fixed investment in land, buildings, equipment and delivery trucks.

Each year we keep the postal service open our unfunded pension and health care liabilities for retirees will increase as well. If not for the fact that it's a government protected entity, we would have closed it long ago. There is absolutely no good reason for its continuing existence today.

Here's my question, fellow taxpayers.

Why do we have such a hard time closing government facilities but not even blink when a major private sector employer goes broke? Job losses happen in both cases, so that can't be the reason.

Could it be the public sector unions and their relationship to politicians? I wonder.

As taxpayers we should insist that heavily government subsidized entities like the post office disappear.

Instead we pay and pay and then pay some more to allow these ongoing taxpayer ripoffs to continue. It makes no sense to me, especially since the cost of postal service exceeds any benefit therefrom by such a huge amount.

So please consider the following familiar example of a sick post office and a sick airline, both of which employ solid citizen taxpayers.

Frequently I read about the ongoing travails of the post office (USPS) and its sickly financial condition. I also frequently read about the ongoing travails of American Airlines (AMR) and its weakened financial condition as well.

Both public sector USPS and private sector AMR are and have been struggling financially for many years.

AMR has reduced its pricing dramatically over the years and reduced its cost structure, too. If it enters bankruptcy, it won't be for a failure to try to repair its financial and competitive issues.

The AMR problem is a simple abundance of low cost airlines that entered the market and are making it difficult for AMR to survive financially. Names of now defunct airline carriers like TWA, Eastern, Continental, Frontier and Braniff also come to mind. Meanwhile, the USPS continues its money losing ways, losing money each day.

As for staying power, USPS loses billions of dollars each year but has been in existence since the country's beginning. Only now is it talking about things like eliminating Saturday deliveries, closing offices, distribution centers and making an effort to someday match costs with revenues.

Creative destruction is a term that applies to AMR and the private sector. It should apply to the monopolistic public sector as well. The term creative destruction was originated by Joseph Schumpeter and simply holds that as competition brings forth new ideas and ways of doing things, these new ways will invariably replace the existing ways of doing things. Innovation brings improvement and destruction, too.

When these innovative ideas and ways are deemed by customers and markets to be improvements over existing methods, the old ways are necessarily "destroyed" to make way for the newly "created" innovations. Hence, the term creative destruction by Schumpeter means only that creation and innovation require destruction in order to make way for a new and improved order of things. It has to happen.

If the USPS had to stand on its own, it would have long ago been out of business. Its outmoded business model simply can't compete with e-mail, the internet, UPS, FedEx and the like. About all it has in its favor is that it's a protected government agency whose employees are represented by a public sector union.

Why is this union and its represented employees worthy of continuing taxpayer support? Why do public entities not have to compete in the same way that private sector participants have to compete? Why do these outmoded monopolies continue to drain the taxpayers financially?

AMR may or may not be forced to enter bankruptcy proceedings in the near future, depending on what its customers, employees and shareholders are able to do about resolving its many problems. That's the way things do and should work in a free market.

USPS should already be extinct and out of business, although it probably won't be anytime soon.

The essential difference between these two sick businesses is that one set of employees is protected by government and government unions, while the other group of employees is not so protected.

With USPS taxpayers never seem to get off the hook, and with AMR the taxpayers are mere bystanders.

If you know any taxpayers, see what they think about this.

Thanks. Bob.