POSTAL SERVICE DEMISE

It has been a while since your Commander has addressed the subject of the Postal Service. Within the past few weeks you no doubt have heard that the U.S. Postal Service is again in the tank for a staggering $8.5 billion for its last fiscal year. The continuation of record negative financial performance raises the obvious question. Why does our government permit this continuation of massive financial loss to continue? Plain and simple, the reason is politics.

By taking a look at Ed O’Keefe’s article earlier this month in the Washington Post you will quickly understand the depth of the Post Office problem.

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/12/AR2010111205704_pf.html

Surely it doesn’t take a brain surgeon to realize that when the internet was first commercially introduced, the business model that existed for the Post Office was ultimately doomed. With each passing year since the early 1990s the Post Office has processed less and less mail, resulting in ongoing and massive financial losses.

Postage rates for a letter have risen from $.29 in 1992 to the $.44 we pay today; a 52% increase. I am not sure what UPS and Fed Ex charge for ground service for a letter. What are you willing to pay to mail a letter?

Time Magazine wrote that stamped letters mailed were 55.1 billion in 2000, and in just ten years the number dropped to 29.8 billion in 2010. With a drop in business of that magnitude any fool should recognize that dire action is required, because you have essentially lost half of your revenue base. This detail alone calls for dramatic action from Congress, and quickly. In March of this year, the Postal Service presented some solutions that would need approval. Washington has, however, twiddled their thumbs and done nothing.

With each passing year Congress has passed the buck along to future sessions of Congress or the next Administration, because they do not want to face the wrath of the Postal Service Workers Union and the emotional ties the public has to mail service. With the country experiencing very serious financial problems, we cannot afford to kick the can down the road any further. Recent meetings held with the Postal Service Workers Union have met with a total impasse, suggesting expense reduction is unacceptable to them.

Obviously, it is time to privatize the Postal Service to the likes of Federal Express or the United Parcel Service; if they are even interested is a question yet to be determined. Certainly the lame-duck Congress will not address this problem, but the real challenge will face the Republican led House, and it will be interesting to see if they have the guts to do the right thing.

This country and those who pay taxes to support it cannot continue to absorb the loss of a dysfunctional business model. The music must be faced. All businesses must adapt or perish. This could be one of the first real tests for the new Congress in 2011, if they are willing to face this challenge.

This is what happens when government runs programs (think Social Security and the coming Obama care)!

COMMANDER GRANGER