New Life for the US Postal Service
The Postal Service, an independent agency of government, does not receive tax money, but is subject to congressional control on large aspects of its operations.
Postal cuts to slow delivery of first-class mail via Bloomberg BusinessWeek
The recent announcement about service cutbacks should come as no surprise. I wrote about this last month when Postmaster General Patrick Donahoe sounded warning signs about the potential default if Congress did not intervene. It looks as if the inevitable has come to pass and the Postal Service is finally coming to grips with necessary painful cost cuts, which includes laying off 100,000 employees.
The irony in this sad situation is that all of this could have been avoided. The crux of the problem is that the Postal Service like Frannie Mae and Freddie Mac is a quasi-governmental agency. It is a semi-privatized organization responsible for its own revenue, yet in order to change anything, it requires Congressional sign-off. It is a purgatory that combines the worst of the free market with a heavy layer of government interference on top. The result is that USPS is left in the dust competitively by UPS and FedEx, but cannot make the changes necessary to make themselves more competitive, by closing unprofitable offices, reigning in labor costs, and expanding the business model and services offered.
Quasi-government organizations do not work. On their own, they could be viable businesses, but if they are not, then why pretend to put them in this bizarre middle ground that is not entire private or government controlled? What pretense is Congress trying to achieve? Is it not obvious that ultimately these institutions are propped up by the government, and thus taxpayers, in the event of a total catastrophe, such as a mortgage meltdown?
That is a problem to tackle at another time. The Postal Service is only biding its time before it finally hangs it up. I think this is unfortunate as the Postal Service is a major employer, particularly of minorities. As irrelevant as the Postal Service is in this day and age, to not find a way to leverage this massive workforce and organization would be hugely wasteful. But if the era of direct mail is drawing to an end, what could the Postal Service actually do?
Here is an idea, turn the Postal Service into the National Internet Service. A recent New York Times article discussed the continued (and widening) gap in online access, particularly in rural areas and in lower income brackets under $25,000 per year. Access for these groups either does not exist or is priced well beyond their means. Additionally, with the need for larger bandwidth as usage rates and media grows, the current infrastructure is going to max out faster than we expect. Many countries are already well ahead of the game, such as South Korea, which will provide 1Gbps access across the entire country by the end of 2012.
The US is woefully behind in implementing the type of Internet infrastructure we will need for the growing digital economy. As much as I am a free market advocate, the reality is that the cable industry and telecommunications industry has zero incentive to build this type of infrastructure when the current wiring is profitable and works for them in the short term. If we relied upon the current industries to innovate and take the risk for building the next generation of Internet service, we would all be long dead waiting.
Much like the development of the Interstate Highway system in the 1950’s and 1960’s helped connect much of the country and spur economic activity (and jobs), the US needs a similar infrastructure program for the Internet. This is where the Postal Service could play a role, by transitioning the workforce and organization to send electronic packets to IP addresses instead of physical envelopes to mailboxes. The project and the transition of the Postal Service is a massive undertaking, but it is the sort of investment that is forward looking, bold, and a generator of economic growth. It also ensures that the digital divide does not leave a good portion of our population in the digital dust by giving them online access.
This is only just a broad framework for an idea. Many details would need to be sorted out and it is very possible that this approach also falls short. There would be obvious worries about the capacity of the government to execute these plans without massive fraud, corruption, and political interference. The question of how the National Internet Service works with / competes with the telecom and cable industries is also problematic. However, transitioning the Postal Service instead of scraping it completely makes much more sense than just letting the organization die off slowly as it is doing now.
19 Notes/ Hide
- joesunga reblogged this from marksbirch and added:
This situation hits close to home since as a Filipino-American, a lot of my family are involved with the post office....
- hansmorituri-blog reblogged this from marksbirch
- marksbirch posted this