It's Presidents' Day: The good, the bad, and the BOG


February 18, 2013

BY MARK JAMISON

On Wednesday, February 7, Postmaster General Patrick Donahoe stood before members of the press and the American people to announce that the Postal Service would end Saturday mail delivery and collections in August.  An announcement like this was inevitable.  No one who has followed the travails of the Postal Service over the past few years could have been surprised that at some point the agency would take a step so contrary to law and procedure that it would be the very epitome of hubris.

Over the past six years the Board of Governors and senior management of the Postal Service have conducted themselves with unabashed arrogance.  They have manipulated what is essentially a crisis of bad accounting policy to pursue a long-held desire to shrink the breadth and meaning of universal service while eviscerating and degrading the postal network. 

The actions of postal leadership over the past six years have headed the agency, probably irrevocably, on a path that will either lead directly to privatization or to at least de facto control of this national infrastructure by a few large corporations.  The ideologues who have targeted the Postal Service for privatization will soon have their day.

 

A license to kill jobs

In leading us down this path, Donahoe and the BOG have demonstrated an unrestrained contempt for Congress, the rule of law, and most importantly, the American people. The senior leadership of the Postal Service has championed an attitude that views average Americans — and especially working Americans — with complete and utter disdain.

Over the years the Postal Service has been an entry into the middle class for millions of Americans, particularly minorities and veterans.  In his press conference, Mr. Donahoe bragged — and there is no other suitable word for it — that there are 193,000 fewer workers than six years ago.  Based on reported percentages of the work force, that means there are about 50,000 fewer veterans employed by the Postal Service, of which nearly 17,000 were disabled.  Mr. Donahoe considers that progress.

While it is true that Congress has utterly and completely failed in its responsibilities to the American people with respect to many issues, including the direction of the Postal Service, that does not give Mr. Donahoe or the BOG the authority or license to co-opt a great institution.  Congress may deserve our contempt, but this does not excuse Mr. Donahoe’s arrogance or his willingness to manipulate the law, the facts, and the American public in pursuit of unaccountable goals.

While Mr. Donahoe would probably like to see himself as a captain of industry, maybe even an inspirational visionary, he’s basically a plodder following orders.  Behind him are some very practiced and practical schemers who see an asset held in common by the American people and believe that it should be theirs.  They are determined to take this asset from what they view as an undeserving public and to put it to their private and profitable use. Pat Donahoe is simply following an irrevocable course set by others, “an errand boy sent by grocery clerks to collect a bill.”

 

The BOG: Who’s who and what are they up to?

At the quarterly meeting of the Postal Board of Governors, two days following the announcement eliminating Saturday delivery, Mickey Barnett, the current chair of the BOG, reiterated the Board’s strong support for the current policy.  Mr. Barnett referred to the Board’s instruction to postal management in January to accelerate cost cutting, citing Saturday delivery as the first step in an aggressive series of steps.  “We must run the Postal Service as a business,” insisted Mr. Barnett, and Congress, he said, must provide comprehensive legislation allowing the BOG to do that.  Last year the Board indicated that it felt that the legislation passed by the Senate was too weak and insufficient in giving the BOG proper control and authority.

The Postal Board of Governors consists of nine members selected by the President and confirmed by the Senate.  The appointed members then select the final two members of the Board — the Postmaster General and the Deputy Postmaster General. At any time no more than five of the Presidential appointees may be from a particular political party.

The BOG currently has five sitting members plus the PMG and the DPMG.  There are thus four vacancies.  Two of the members are politically connected attorneys; the third is the former chair of the Kentucky Republican Party; the fourth is the former chair of a large defense contractor; and the fifth was a senior aide to Vice President Biden.  The President has selected three candidates to fill the four vacancies; two are academics, and the other is James Miller, a former BOG member who has advocated vociferously in his writings and testimony before Congress for privatization of the Postal Service. Confirmation for these appointees has languished in the Senate for at least six months.

Looking at the current members of the BOG, the appointees awaiting confirmation, and those who have served on the board in the past, it is striking how insular a board this has been, filled primarily with political operatives and insiders, folks who seem detached from everyday America. 

It is also curious that there does not ever seem to have been a board member who comes from labor.  We are often reminded that 80% of the costs of the Postal Service are related to labor and that the labor agreements are a large part of the current problems.  Never mind that both of those claims are misguided.  It does seem that an organization that is the second largest employer in the United States would benefit from a Board member who had a background in labor.

 

Maximize Stakeholder Value

The people who serve and have served on the BOG may be well meaning, interested in doing a thorough job, and intent on creating what they believe is a successful Postal Service.  It seems clear, though, that most of these folks, regardless of their party or political affiliations, subscribe to a view of American business that is consistent with conventional corporate wisdom over the last forty years.  It is a view that seeks to maximize shareholder value to the exclusion of all other considerations.  It is a view that has exacerbated income inequality in this country and resulted in the hollowing out of the American middle class.  It is a view that has resulted in the capture of government by crony capitalism.

These are people who don’t have a sense of what it’s like to walk a mail route when it’s ten below zero.  They are privileged and entitled so they’ve probably never had to wait until the last minute to get a bill in the mail because they didn’t have the money.  They likely have access to the best in broadband service.  Banks probably fall all over themselves to attract these folks as customers.

In their insular world, the identity of small communities means little or nothing.  They see a ledger of profit and loss, and they don’t wonder about the underlying human consequences of their decisions.  They see no sense of value or meaning beyond the bottom line and often that focus is so narrow that it only sees the next quarter or accounting period.  They are convinced that profit is progress and that short term is the only term.  They’ve built nothing, have no sense of history or community, and most likely believe they are where they are as a result of their own unique abilities. They are neither sentimental nor kind; they haven’t time for that.

Calvin Coolidge, one of our least inspiring presidents, once said, “The business of America is business.”  The postal leaders have embraced that ethic with a coldness and calculation that is devoid of inspiration or vision.  They have been handed the keys to a great and inspiring institution, yet their only goal, their only vision is to park it safely in a corporate garage.  Their only ethic is to maximize shareholder (excuse me, stakeholder) value.  To do that, they must put on blinders, define the terms as narrowly as possible, and reduce the American people, the public, to an aside, a secondary consideration.

They say the “Company” (for with that title they eliminate and excise any mission not defined by the bottom line) must be turned around, cleansed of excess baggage, made profitable and presentable for others like them.  Maximize Stakeholder Value is their credo, and their embrace of it would extinguish any pretense to high ideals like binding the nation together.  They would rewrite the Constitution to exile any mention of the public welfare.  The business of America is business.

 

How much will it bring in?

This is not about whether Saturday delivery is a good or bad idea.  It isn’t about whether this plan will save $2 billion.  It isn’t about whether the United States Postal Service is an anachronism or has a failing business plan.  It isn’t about whether Congress should stand up or man up or even do something that remotely looks like governing.

At its most basic level, the announcement about eliminating Saturday delivery, presented with arrogance and hubris, is about who owns and who will own the United States and its government.

The great experiment known as the United States of America was conceived with a unique understanding, an ideal that balanced individual freedom with respect and responsibility for community and common purpose.  It wasn’t every man for himself, but it wasn’t central planning and control either.  It was a vision of government of, by, and for the people, with an appreciation of the potential of free markets but also an understanding that together we would build the conditions and infrastructure that would foster those markets making them both profitable and fair.

The French writer Alexis de Tocqueville traveled America in the 1830’s and observed with admiration and a bit of wonder how we were so utterly a nation of individuals while at the same time being a nation of joiners, of community. Then again he also observed:

“As one digs deeper into the national character of the Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: how much money will it bring in?”

 

The path to profitability

We are told that the Postal Service needs a new business model.  The Board of Governors tells us that they understand with clarity and single-minded purpose what that model ought to be.  While Congress dithers, the governors have taken it upon themselves to move forward with what they call “a plan to profitability.” The question that naturally follows is, profitable for whom?

Congress dithers and bloviates but listen closely and you won’t hear anything all that different than what the BOG is proposing. Tom Carper and Darrell Issa, the two most vocal members of Congress on postal issues and the respective chairs of the Senate and House committees that will someday propose and presumably pass postal reform legislation, don’t really differ from what the BOG says.  They may advocate different plans, they may advocate slightly different structures or routes, but the substance of their reform is essentially the same. 

The path to profitability is a path to privatization, and all that remains to be seen is whether what we end up with is de facto privatization or privatization in fact.  Either way the end result is that the Postal Service will look even more corporate than it does now, and a few large corporate stakeholders will be the primary controllers and primary beneficiaries of what is left. 

And what will be left is Andrew Mellon’s dream, the elevation of capital, the liquidation of labor, the worship of short-term profit over utility, service, and meaningful investment. In short, we will simply duplicate the model that has plagued the American economy for the last forty years, the model that led to the dislocation of the Great Recession and our ongoing stagnation, a stagnation that, by the way, has resulted in some of the largest corporate profits of the last fifty years combined with higher unemployment and reduced wages. It’s an economy of the few, by the few, and for the few, and it relies on a government that mirrors that ethic.

 

A more perfect union

The Postal Service does not need a new business model.  Let me say that again: The Postal Service does not need a new business model.  The Postal Service is not a business, and it should not be modeled after business, especially if that business is based on the model of today’s corporation.  The trials and tribulations of today’s Postal Service mirror a much greater problem in our thinking and at a most fundamental level speak to the cause of the failure of our economy to be inclusive, productive, and a source of prosperity and benefit for the great mass of Americans.

Business is business.  Its goals, procedures, and actions have a specific and, yes, useful purpose and function.  Business exists for profit and everything else is secondary to that goal.  That is as it should be. The profits businesses generate can and should benefit society, but business, in its purest sense, is a seeker of profit.

Government is the means by which we organize ourselves, one of the means by which we express the norms and rules that make for a coherent society.  Government doesn’t determine what we believe, nor does it create our first principles.  Those come from our faith and reason, from family and community, and from our ideas about what our world ought to look like.  But government is the way in which we create a framework that reflects those principles.

The preamble to the Constitution tells us, perhaps more clearly and perfectly than any words ever written what government does:

“We the people of the United States of America, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.”

There it is, and it’s pretty damn simple.  It isn’t about every man for himself.  It isn’t he who dies with the most toys wins.  It’s a clear statement of purpose of how we’ve decided to organize ourselves.  There’s nothing in there about being businesslike.  Government is government. It isn’t a business and it shouldn’t be.

 

First principles

We have wandered away from our first principles.  In all the conversation today, in our basic political dialogue, we ignore those first principles, and no place is that more evident than in our discussions about the fate of postal services in this country.  One of the things the Founders and their early successors understood is that for this country to prosper we needed to devote energy and investment to public infrastructure.  They saw clearly that we needed a set of rules and laws that balanced private interests against the general welfare.  Nowhere was that clearer than in some of the functions contained in Article I Section 8 of the Constitution.

The Founders understood, for example, that authors and inventors, creators and innovators needed incentives and protections, hence copyrights and patents, but the Founders also recognized that there was also a fundamental public interest involved, which meant establishing limitations on those protections.  In the same section of the Constitution, they laid the groundwork for some basic infrastructures including the national postal system.

The Founders understood that the national post needed to be a shared infrastructure that offered opportunity and use to all comers.  In his comments before the BOG on February 8, PMG Donahoe repeated something he has taken to saying quite frequently.  He said that he did not want the Postal Service to become a burden on the American taxpayer. 

It’s as if he is saying that the Postal Service is not owned by the American people.  I’m not suggesting that we should simply subsidize the Postal Service regardless of its efficiency, or lack thereof, and in ignorance of all consequences, but the fact that the Postal Service accepts no tax revenues does not mean that only the largest mailers and vendors who do business through the postal network should have a say in its operation.  Mr. Donahoe and the BOG are effectively saying that the American people ought to be excluded from consideration when discussing postal operations.  They couldn’t be more wrong.

 

Cut, cut, market, market

The postal network has been a source of profit and opportunity for American businesses  Whole industries have grown and thrived as a result of the breadth and reach of the postal network.  The Postal Service has been a source of innovation that has benefited millions. It has also been a safe and secure network for the dissemination of information and opinion.  That should not be taken lightly.  Chairman Barnett offered the information that the Postal Service is the most trusted government agency and the fourth most trusted institution in America.  There’s a reason for that and it isn’t because of a business model, branding, or marketing strategies.  The Postal Service is an embodiment of our first principles.

As an institution the Postal Service is challenged by today’s changing technologies. The leadership of the Postal Service has responded to that challenge poorly because their focus has been misplaced.  It is only over the last couple of years that the Postal Service has created an office dedicated to digital solutions, and those solutions are primarily directed as using barcodes more effectively in advertising mail.

Because the leaders of the Postal Service have adopted the mentality of American business, they have focused on what have become the socially destructive principles of American business.  Cut costs, cut labor, reduce service and market, market, market, which is often little more than putting lipstick on a pig.  Instead of reaching for the high ideals embodied in the charge of binding the nation together, they have mouthed tired platitudes about competing.  The only thing they’re getting better at is getting smaller, and that’s not necessarily a characteristic of successful infrastructure.

 

What could be

The Postal Service isn’t a business.  It is an infrastructure with tremendous potential to promote the general welfare. Yes, the Internet is diverting billions of pieces of mail in the form of bill payment.  This country could use a good bill presentment and payment system that relies on electronic transfer; a system that is accessible to every American, a system that promotes efficiency with minimal fees rather than acting as a source of fee extraction for big banks.  The postal network has the potential to provide that in an effective way, a way that could save American business billions.

There are thirty million Americans with limited access to banking services and nine million more who don’t have any access.  There’s no reason the current postal infrastructure, perhaps combined with America’s credit unions in a truly beneficial public private partnership, couldn’t solve that problem and bring even more Americans productively into the marketplace.

There are many millions of Americans who lack good broadband access. As a nation we rank among the lowest in terms of the quality and cost of this important infrastructure. That is unacceptable.  The Postal Service could play a role in remedying that.  More important, there are many people who have no access to the Internet.  Many are old and poor.  Rather than leave them behind, which seems to be today’s prevailing ethic, the Postal Service is the ideal institution to solve this problem.

The Postal Service has the largest vehicle fleet in the world.  Vehicles could be mounted with sensors able to collect extraordinary amounts of weather and atmospheric data that has both commercial and scientific value; they could be used to read utility meters in cases where it’s more efficient.  The fleet represents an asset that is not being effectively used.  So far the only use proposed for postal vehicles has been as a platform for advertising — not especially creative.

Studies have shown that voting by mail can save local governments as much as a dollar per voter.  If all the voting in the last presidential election had been done by mail, the Postal Service may have gotten only about $106 million in additional revenue.  That isn’t a great deal, but combined with a savings of $120 million to local governments, that does amount to something, and those savings are ongoing and could be part of a solution to our defective voting infrastructure.

The 2010 census cost about $13 billion, and much of that cost was redundant because we don’t coordinate between government agencies very well. That’s something we need to do better and with a Postal Service presence in virtually every community in America, it’s an agency that could lead an improvement in the efficiency and effectiveness of government services.

 

A failure of imagination and principle

There are many solutions to problems embodied within the postal network.  What stops us is a failure of imagination.  Abraham Maslow suggested that if your only tool was a hammer then every problem would begin to look like a nail.  Our idea of turning government into business, of abandoning our first principles in favor of a golden calf that turns out to be cheap tin, is making every problem into a nail.

At one time the Postal Service employed over 800,000 Americans.  Postal workers had salaries that placed them solidly among the middle class and benefits that should have been an example and a standard rather than something we seek to eliminate.  These jobs were productive and meaningful, and they were paid for largely by the cheapest postal rates in the world.  As I pointed out at the beginning of this piece, a large percentage of those jobs were held by veterans, especially disabled veterans.  Minorities have also benefited tremendously from postal employment.

Today, we have nearly 300,000 fewer jobs, and benefits are eroding.  Instead of being an example and a standard, we are creating a casualty.  It’s a failure of a model but more than that, it’s a failure of imagination, and even more, it’s a failure of principle.  Congress and the BOG have both talked about pulling postal workers out of federal retirement and healthcare systems, but those systems are models we should be seeking to emulate not destroy.

What we can do is make reasonable changes that make those systems more effective.  For example, while millions of postal and Federal workers pay into Medicare, they do not use Medicare as a first provider when they become eligible.  Changing this and offering supplemental plans to retirees would save billions.  And postal workers pay a lower share of their healthcare premiums than other Federal employees. That is certainly something that could and should be changed.

 

Nothing between us and our Calvin

I recently appeared on a radio show to discuss the Saturday delivery announcement.  The hosts of the show kept telling me that the Postal Service was an anachronism, with a failed business model.  Where’s the profit they asked?  Why should we subsidize postal workers or rural communities?  You must have a successful business model, they insisted.

One of the things that truly disturbed me about my exchange with these hosts was the implication that the wages and benefits paid to postal workers were somehow the source of the problem.  In today’s world everyone knows that it’s essential to reduce labor costs. They segued from that argument directly to a suggestion that because neither of them cared about Saturday delivery, no one else should either.

And there we have a mindset that is destroying our sense of community, our society, and maybe our country.  It’s “every man for himself” and “how does that affect me?” and “where’s mine?” — an utter abandonment of our first principles.

When Rick Santelli, the CNBC correspondent whose rant inspired the Tea Party, had his epic meltdown over the fiscal cliff, was he screaming about the bankers and the financial guys who got bailed out to the tune of a trillion dollars (give or take a few billion)?  No, Santelli lost it because of a proposal that would have helped homeowners, some of whom were victims of the bankers and some of whom were greedy speculators (were some homeowners greedy speculators, or where the homeowners victim of bankers and speculators?).  “Do you want to pay your neighbor’s mortgage?” screamed Santelli.

Forget the folks in the financial industry who created instruments of mass destruction that had no economic purpose and less social value.  Forget the guys with six figure salaries and a 15% tax rate.  Just make sure the guy who makes fifty grand doesn’t get a break. Santelli’s self-indulgent anger failed to recognize that when the guy next door got foreclosed on, your house’s value went in the toilet too.

There’s been a great deal of anger and cynicism towards government.  Quite frankly, there should be, but the whole makers-takers argument, the 47% meme, the food stamp nation accusations, are all a distraction. Yes, we have the best legislatures that money can buy. 

Our politicians are all Calvin Coolidge now, doesn’t really matter which party they come from — the business of America is business.  And the purpose of the political parties is to use sleight of hand and parlor tricks to get you to blame the guy next door while they fill their pockets.

 

Addition by subtraction

We’re told the Postal Service is the lynchpin of a trillion dollars’ worth of our economy and eight million jobs. That’s an indication of just how valuable the infrastructure is.  At the moment, though, we’re being told that if we eliminate a few hundred thousand of those jobs and make many of the rest of them much less attractive then the industry as a whole will thrive.  Addition by subtraction, I suppose, but then we might do well to remember that telling phrase — “maximizing shareholder value.”  It’s a prescription that defies common sense.

It may be that we need to eliminate Saturday mail delivery.  It may be that we need to have fewer post offices in small communities.  There’s no question that there are challenges ahead for the Postal Service.  But we’re having the wrong conversation, and we’re doing it the wrong way.  The Postal Service is not a business. The Postal Service is an essential piece of our economy.  It is a needed and necessary service. It is a needed and necessary infrastructure that provides opportunity and is filled with potential. 

The Postal Service is failing because its leadership lacks vision and, worse, they lack any real commitment to the American people.  We’re not going to fix the Postal Service and our government in general by pretending they’re something they aren’t.

The recent actions of the Postal Board of Governors and Postmaster General Patrick Donahoe are unconscionable.  Their actions are steeped in arrogance and ignorance.  The PMG and BOG are abetted by a Congress that is an utter failure.  There is simply no other way to put it. 

  In every community there is a class of people profoundly dangerous to the rest. I don’t mean criminals. For them we have punitive sanctions. I mean the leaders. Invariably the most dangerous people seek the power. — Saul Bellow, Herzog
 

[Mr. Jamison is a retired postmaster and a regular contributor to Save the Post Office; his articles are archived here.  He can be reached at  Mij455@gmail.com.]

Image sources: Wikipedia entry on President stamps

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