BY MARK JAMISON
"These men combine to bring about as much financial stress as possible, in order to discredit the policy of government and thereby secure a reversal of that policy, so they may enjoy unmolested the fruits of their own evil doings. I regard this contest as one that will determine who shall rule this free country — the people through their chosen representatives, or a few ruthless and domineering men whose wealth makes them peculiarly formidable because they hide behind the breastworks of corporate organization." — Theodore Roosevelt
IN 1947 A NUMBER OF NUCLEAR SCIENTISTS got together and unveiled a public relations device known as the Doomsday Clock. It was a symbolic clock face, and the nearer the hands came to midnight, the closer we were coming to nuclear disaster. The clock was initially set at 11:53, and over the years the hands have been moved, sometimes nearer to 12:00, sometimes backing away, in response to the world’s geopolitical situation.
If such a clock existed to represent the fate of the United States Postal Service, the second hand would be finishing its last few clicks before the clock chimed midnight and disaster struck. The actions of Postmaster General Donahoe and the USPS Board of Governors have methodically ensured that we would be reaching this moment with an ever-increasing sense of eventuality.
Over the past few years the leadership of the Postal Service has offered numerous predictions regarding the financial status of the organization, each more dire than the previous. Usually the predictions have been accompanied by a set of Draconian prescriptions intended to “save” the patient.
It has become a predictable exercise. The PMG announces another huge loss and anticipates even greater losses down the road, and then he claims he must be given the power to radically alter the nature of postal services so that he can pursue a more successful business model.
At each juncture, when the public or politicians have questioned Mr. Donahoe’s plan, he has responded with new, even more dire predictions and even more radical solutions. He has been goaded on by two Republican Congressman, Darryl Issa and Dennis Ross. Like villains in an old B-movie, they have licked their chops and curled their mustaches at the prospect of the destruction of several hundred thousand public-service, good-paying, union jobs.
Playing foils to Issa and Ross are Senators Susan Collins and Tom Carper. They fill the role of the “responsible” parties because they have shepherded previous legislation through the sausage grinder, legislation that has turned out be about as useful as Neville Chamberlain’s claim to have achieved “Peace in our time.” The PAEA that they designed can take much of the credit for the huge deficit the Postal Service now unnecessarily faces.
The various associations of business mailers have chimed in as a cheering section. They view the Postal Service as their personal lapdog, and they act as though the sole purpose of the postal system is to provide them with low rates and guarantee their profits.
Sadly, the mechanisms that are designed to provide oversight and regulation of the Postal Service have no real teeth. The management structure of the Postal Service, from the BOG down through the executive corps, faces nothing that would ensure real accountability. They do as they please.
AT THIS POINT I AM CONVINCED that in a very real sense Mr. Donahoe has won. Regardless of what political or legislative actions may take place over the coming weeks and months, Mr. Donahoe has already done so much damage to the image and brand of the Postal Service, it will be impossible to undo it. He has so thoroughly undermined the organization’s morale and so completely polluted the dialogue with misrepresentations and visions of doom, that it would be nearly impossible to get the stink of a rotting corpse off the Postal Service.
Congress, for its part, will not be able to act swiftly or forcefully enough to prevent at least a significant part of Mr. Donahoe’s agenda from being implemented. No Capraesque miracle is going to stop the PMG and save the post office. There's no Jimmy Stewart or Gary available for a heroic climax.
While the final scenes of this movie seem to be inevitable, it is impossibly difficult for anyone who understands the value of the Postal Service — both as a cherished national institution and as an essential piece of national infrastructure — to simply walk away. What is happening to the Postal Service is a sad example of the decline of our political and economic systems. Seen through that lens, the impending destruction of the Postal Service holds a lesson.
In 1970 the Postal Reorganization Act (PRA) created the United States Postal Service out of the old Post Office Department. The legislation was a response to a politically stodgy and increasingly inefficient dinosaur that offered deteriorating service to the public, poor working conditions for its employees, and the potential of increasing expense to the taxpayers.
Coming at the end of the most vibrant twenty-five year period in the history of the American economy — a time when American business was the model for the world for the way it had successfully created an inclusive economy with a healthy and growing middle-class — it was thought that business had much to teach government. Treating the post office as something more akin to a business entity would be more efficient and healthier.
The PRA created the Postal Service not as a pure profit-seeking entity but as a mixed enterprise tasked with growing the nation’s postal network while maintaining universal service and operating at break-even efficiency. The new structure was an improvement, but it still suffered from a fatal flaw: It was a chimera, neither man nor beast, government nor business.
IT’S A COMMONLY HELD MYTH TODAY that government can do nothing right or well. This viewpoint resurfaced in the 1980’s with increasing vigor. The myth argues that our economy and our future thrive only when capital reigns supreme and markets are left to work their magic.
The myth ignores the long history of economic dislocations that devastated average folks throughout this country’s history. It ignores the destruction of the Depression, when we thankfully chose not to follow the advice of Treasury Secretary Mellon — “Liquidate labor, liquidate stocks, liquidate farmers.” (Mr. Mellon was also the author of another great canard that continues to haunt us: “Give tax breaks to large corporations, so that money can trickle down to the general public, in the form of extra jobs.”)
I suppose this is a perfect example of how setting the terms of a discussion can influence our ability to solve a problem. We are bound and determined to conceive of business as a paragon of efficiency and to see government as somehow inherently unable to be efficient. But this idea of efficiency is really a misrepresentation. Businesses are not necessarily efficient. The market rewards certain profit-seeking behaviors that may be efficient in a very narrow sense but that can be terribly inefficient for society in general.
Over the last thirty years, we seem to have forgotten that our greatest periods of economic growth occurred after we began regulating markets to protect the public, installed a safety net to help the more vulnerable citizens in the economy, and invested vigorously in national infrastructure, like the national highway system and rural electrification.
Unmindful of this lesson of the past, the leaders of the Postal Service have increasingly pointed the organization down the corporate path. They have asserted that they could compete in an ever-expanding postal market if only they were freed from unnecessary regulation and the burden of union contracts. They have grasped onto the new business-centric rhetoric with glee.
Postal management and Congress have bought into the myth that unfettered markets are the answer to everything. That’s the basis of the current “crisis,” which is in fact little more than planned destruction that is neither creative nor useful. Its sole intention is to transfer into the hands of a private few an infrastructure that was designed to provide universal access and utility for the many.
The idea that the Postal Service ought to be released to compete is nothing but reactionary bunk. The postal network is a public good, a highway for commerce, and a bulwark of intellectual freedom.
Bruce Bartlett, a former Republican director of the Office of Management and Budget, once called the National Highway System, “perhaps the best example of a pure public good that contains an enormous stimulus to growth.” The Postal Service would perhaps be an even better example of a national infrastructure that is a pure public good.
Yet in our convoluted world we have lost sight of public goods and the value of our infrastructures. The idea of the commons as a means to facilitate growth has become an anachronistic concept.
I FIND IT IRONIC that those on the Right would decry America as an “entitlement society.” They bemoan the idea that Americans have a growing sense of entitlement. It now turns out that having a post office in your community is a form of “entitlement.”
The “victims” are no longer the vulnerable populations who depend on post offices and the mail system — the poor, the elderly, those on the wrong side of the digital divide. The victims, rather, are the members of the business mailing community. They are the ones who have been wronged and whose complaints must be righted.
PostCom is an association of mailers run by Gene Del Polito, a frequent and vociferous spokesman on postal matters. Mr. Del Polito claims extraordinary rights for business mailers as a preferred and entitled group of stakeholders. On the group’s website, under the logo, PostCom is described as "Representing those who use or support the use of mail for Business Communication and Commerce." And then this line: "You will be able to enjoy only those postal rights you are willing to defend."
The PostCom website features news and opinions in favor of the “rights” of the business mailers. One recent gem pretty much encapsulates the view of this part of the mailing community:
“The postal legislative rhetoric in Washington these days is about getting everyone in the postal business to put some ‘skin in the game.’ Postal Washington has already taken enough skin from business mailers. Rates have gone up. Service has gone down (the equivalent of another rate increase–paying more, getting less). In the meantime, Congress hasn't done a darn thing about the billions spent on Treasury payments that are more than needed. Nor has Congress done anything to help trim the size of the Postal Service's physical and human infrastructure to more appropriately match reasonably predictable reduced workload needs. Mailers have undergone already their share of the skinning. It's time to look elsewhere and do something different.”
Postal reform has always revolved around the idea of “stakeholders,” which has come more and more to mean narrow special interests like the mailing companies. The business mailers, newspaper associations, catalog mailers, and various other groups all seek preferential rates and treatment. Labor and the unions are also considered stakeholders, yet their interests often seem relegated to last consideration.
It’s an oddity in today’s discussions that labor, especially when it combines to form unions, is considered evil and a deterrent to progress and fairness. When capital unites to further its interests — for example, in the form of a corporation — it’s somehow a boon to society. And when groups of corporations form unions like the Association of Affordable Mailers for the purpose of advocating better prices and conditions, that seems to be all right. But when workers unite to promote their economic interests, it’s somehow un-American.
During the various attempts to reform postal services in this country, a great amount of attention has been given to the stakeholders. Inevitably those discussions lose sight of the fundamental premise of the postal network as infrastructure, an integral piece of the nation’s economic capital owned by the American people generally and accessible to all for commerce, profit, and, most importantly, communication.
We see inklings of the idea of the commons and infrastructure as we maintain special rates for non-profits, media mail, and periodicals. Yet more and more, we can see how the focus has shifted over the years. The Postal Accountability and Enhancement Act of 2006 enshrined the idea that each class of mail ought to bear its own weight in pricing.
OVER THE YEARS THE RATE SYSTEM has been increasingly arcane. Today there are over 7600 different rates. A recent study by the USPS OIG noted the inefficiencies of the rate system, but it’s more than a matter of inefficiency.
Hidden in those rates is an advantage for large business mailers. As with our tax system and every piece of new legislation, which typically runs to hundreds or thousands of pages, the complexity is often a means to obfuscation. The language is meant to confuse and distort in order to hide what’s really happening — those with sufficient resources know how to make obscure provisions work to their own advantage and increase their own profits.
The postal rate system and the underlying assumptions that support it are a perfect example of the trend towards complexity creating obfuscation for the purpose of advantage. The system drives how the Postal Service invests in its future. Many new technologies, for example, are simply value-added services that benefit a narrow portion of the mailing market, a group that actually receives discounts and preferential treatment for utilizing the technology. Mailers get big discounts on Priority mail for using postage meters that print three-dimensional bar codes, even though those pieces travel through the regular mail stream. The new technologies deployed by the Postal Service usually do not enhance efficiency or improve mail service for the general public.
Postal reform should be based on promoting, developing, and enhancing the postal network as infrastructure, a neutral pathway that businesses and individuals can utilize for various functions, including furthering growth and profit. When the Postal Service gives preferences — like discounts or a new technology — it should be for the public good, and that should be the only standard that’s considered. We give preferences for books and media mail, we give preferences to non-profits and periodical publishers, and well we should. The free flow and exchange of information binds the nation together. We also give preferences in employment to veterans. That too is a public good and should not be overlooked.
One of the most telling examples of how we have lost our way and become driven by narrow concerns is the discussion that took place during a Senate hearing on PAEA. Senator Collins was expressing a concern that even modestly increasing rates would cause problems for business mailers. As an example she mentioned a catalog company in Maine that might have to lay off eight people if rates increased.
I do not lack empathy for those eight people, but Ms. Collins has shown substantially less concern that the current discussions of postal reform would result in the loss of at least 155,000 good middle-class jobs. This shortsightedness and the plain selfishness embodied in the comments of groups like PostCom demonstrate how far we’ve gotten off the track.
One of the great impediments to true postal reform is the idea that the Postal Service is a monopoly and therefore has a tremendously unfair advantage. The Postal Service has been denied the opportunity to develop many services and offerings that would extend its utility and support the breadth of the network.
So we worry more about the problem of permitting post offices to offer simple services like copying or fax or notary because these would compete with private businesses. Yet we shovel huge discounts toward the big mailers and develop expensive technologies that benefit advertising mailers.
The supposed advantage of the postal monopoly is a fiction and even more so when balanced against the very real public good embodied in the universal service mandate. Nothing prevents the business mailing community from developing an alternative delivery system for standard, catalog, or periodical mail. The fact is that those businesses benefit tremendously from the existence of postal infrastructure and could not duplicate its reach or effectiveness at any price let alone one that would maintain their low rates.
WHATEVER THE ARGUMENTS for the postal network and its attendant services as infrastructure, those arguments have been trumped by the actions of the Postal Board of Governors and senior postal management. Some have speculated that Mr. Donahoe has played a masterful political game of chicken with Congress and in doing so has forced their hand to complete meaningful reform.
No, Mr. Donahoe’s actions and prescriptions have been executed with the sole purpose of delivering the Postal Service and its assets into private hands. Mr. Donahoe could have suggested that postal employees pay healthcare premiums equal to others in the Federal system, a reasonable proposal that would have saved $700 million per year. Instead he insists that withdrawing from the Federal healthcare system is essential.
He could have suggested that the postal retirement funds be held in off-budget trusts with mechanisms to adjust contributions and return overages based on sound actuarial decisions. Instead, he insists that postal employees and generations of retirees should be withdrawn from the current systems, a move that abdicates years of guarantees and promises.
He could have offered visionary proposals that would adapt the Postal Service to a changing mail mix and maintain its relevancy in the face of electronic diversion. Instead, he chose to double down on a volume based system offering tired products like EDDM and Summer Sales, neither of which will drive consistent long term revenue.
He could have taken a moderate, adult, responsible approach to the cash crunch caused by the mandated retiree health benefit payments, pointing out that operations and other functions were solid and that even with decreased mail volumes resulting from both systemic and temporary economic conditions the future was sustainable absent the egregious payments. Instead, he chose to portray the situation as desperate and in doing so ginned up fear and controversy.
The plain fact is that since PRA there has been a segment of folks who thought the post office ought to be a private business entity. PMG Potter’s trumpeted transformation strategy of 2002 relied on policies that would undermine the strength of the network while making the Postal Service even more a prisoner of a narrow portion of the mailing industry. The PAEA reinforced the notion of Postal Service as business and then failed even further by pretending that the regulatory structures of the legislation would actually protect the interests of the American public.
The sad reality is that the nine members of the Board of Governors along with the Postal Executive Leadership Team have been able to chart a course that has already gone a long way to destroying a great public institution. In doing so they have remained essentially unaccountable to the American people and their representatives. In the environment that has been created by their actions, it is unlikely that any meaningful reform can or will take place.
Congress has become increasingly ineffectual and it has failed in its responsibilities as well. Hopefully they will come together to salvage something from the current mess, but sadly the damage is ongoing. Regardless of what actions Congress ultimately takes, it is clear that Mr. Donahoe and the BOG have already set all the terms.
[\Mr. Jamison can be reached at [email protected]]