Paul Jacob

Yesterday’s front-page Washington Post headline screamed: “Proposal to slash horse & buggy jobs blasted by unions.”

The Post went on to discuss a plan by horse-and-buggy management to “lay off 120,000 workers,” a move that “would further wound an already ailing labor movement.” Horse-and-buggy unions pleaded that “workers have made many concessions” previously “in an age of dwindling rider volume.”

Wait a second . . . did I write “horse & buggy”? Heavens! I meant to write “postal,” as in the United States Postal Service. Just switch the word “postal” for “horse & buggy” and all is well.

Or not so well.

Apparently, just as the with the long-suffering horse-buggy sector of the economy, the Postal Service “is a storied institution that is struggling with stiff competition, declining demand . . . and a conflicted identity.”

I’m not certain what to prescribe for “a conflicted identity.” I’m not a licensed psychiatrist. But in business it is important to be focused, rather than “conflicted,” on products and services with actual profit-making demand from modern-day, living customers.

Though the recession has certainly been a factor in reducing demand, in both the case of buggies and that of mail delivery, the bigger problem is strong competition that has been stripping away consumer demand for decades. All the while, our conflicted elected officials have done little to nothing in effectively protecting the buggy business from the onslaught of the automobile and the subway. Likewise, the Post Office cannot simply hit the kill-switch to block bill-paying over the Internet or thwart human communication via basically free email and very inexpensive phone service.

Of course, the horse-and-buggy folks have one critical advantage over the postal people: Congress is not part of the management team at Buggies R Us.

The Post Office should be so lucky.

“Since 1970,” reporters Alec MacGillis and Lisa Rein inform, “the Postal Service has operated as a quasi-private monopoly that receives virtually no taxpayer support but is hamstrung in competing with companies like FedEx and UPS because it cannot raise prices above a certain level, must maintain minimum levels of service and must now make the annual retiree payments.”

Of course, “virtually no taxpayer support” means “some taxpayer support” and “quasi-private monopoly” really equates to a “government-enforced public monopoly.” The Congress has outlawed any competition with the post office in delivering first-class mail. But though that specific monopoly gives the USPS an advantage, Congress takes away the advantage (and arguably more) by dictating how the “protected” service will be run.

The Postal Service keeps trying to do all the things that a sensible business does in response to decreased demand for their service. They have fought with the Congress to raise postage rates. Congress wants low rates to please constituents, who are likely not to remember to blame those same congressmen for USPS’s huge operating losses.

Postal management wants to break union contracts, both because they have more workers than productive, profit-making work to offer them and in order to alter the current medical and retirement benefit packages, which are the most generous among all federal employees and for which postal workers pay less in premiums. What else can be done when labor costs consume 80 cents of every dollar spend by the post office?

USPS is also trying to close unneeded post offices and to end Saturday delivery nationwide. The Saturday closing alone would save $3 billion a year. But these solutions are blocked, waiting for a dysfunctional Congress to act. No one — management, labor or customer — can possibly take comfort in reading that “congressional aides said their bosses would address the Postal Service’s woes first thing after the August recess.”

Imagine if your business (or your employer) depended on the U.S. Congress to approve crucial decisions. It might be losing $9 billion a year, just like USPS.

The only good thing mandated by Congress is the requirement that the Postal Service put money aside to pay retirement benefits for the next 75 years. It’s long past time to require business and government and labor to actually pay for the pension benefits they promise, rather than fraudulently underfund their commitments and then renege entirely, likely triggering yet another taxpayer bailout.

Without question, the Constitution gives Congress the power “To establish Post Offices and post Roads.” But it certainly doesn’t require, some 224 years later, that rational people continue squandering $9 billion each year, when times have clearly changed.

Instead of losing billions, why not free the Postal Service by selling it to the highest bidder? The federal government could not only make some much needed cash, but the post office would be run far more efficiently.

What about our beloved representatives in Congress? Let’s put them in charge of bringing back the horse and buggy.


Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.