The Postmaster General talks about privatization and real estate


If you’re a masochist or have nothing better to do, you might watch the video of Postmaster General Patrick Donahoe’s appearance on the Larry Kudlow show last week.  Kudlow begins the segment saying, “The US Postal Service is in big trouble, and now there’s talk tonight in Congress of a bailout. . . . Isn’t it time to end the monopoly and privatize the Service?”

Donahoe tries to set the record straight—the Postal Service is not going broke and it doesn’t need a bailout, just Congressional approval to stop requiring it to pre-fund retirement healthcare.  But what’s interesting is just how commonplace it’s become to advocate privatizing the Postal Service.

A few minutes later Larry gets to the point. “So Patrick, look, I love FedEx, Fred Smith is my favorite CEO.  Why don’t you let him absorb you? How about that? The guy’s a magician, he’s a miracle worker.  And he’ll make a deal with Google and you all can live happily ever after without a government bailout.”  Donahoe laughed off the idea and suggested the USPS might instead absorb Fed Ex.
But Fred Smith?  Besides being the founder of FedEx, Smith is a free market fundamentalist who has served on the board of directors of the Cato Institute, a libertarian think-tank that cranks out white papers arguing for the privatization of the Postal Service.  Smith himself has written articles about how the Postal Service should be confined to non-competitive markets—the areas that FedEx won’t touch—and how it should be “dismantled as these markets shrink.”  In testimony before Congress in 1999, he said, “Closing down the USPS . . . is an option that ought to be considered seriously.”  In 2009, Smith and FedEx “launched a multi-million-dollar campaign against legislation that would make it easier for 100,000 of FedEx’s workers to unionize.”  According to this (socialist) website, Smith’s main contribution to the mailing industry “has been to undermine the union wages and conditions won by the U.S. postal and UPS workers.”

Later in the interview, Kudlow and Donahoe talk real estate. “You’ve got big real estate holdings,” says Kudlow.  “In some sense, you’re a real estate holding company.   Why don’t you make use of that and start selling off the real estate left and right?”

“We are,” replies Donahoe.  “As a matter of fact we sold the GPO (General Post Office) in New York couple of years for $230 million. . . .  We’ve sold properties all across the US.”

Too bad Donahoe didn’t take the opportunity to defend the Postal Service’s network of brick-and-mortar post offices.  And why point proudly to the sale of New York’s James Farley Post Office, one of the grandest in the country?  Isn’t that just symbolic of how far the Postal Service has fallen from its former glory? Anyway, if you’re in the market, there are plenty of post offices for sale.  Maybe yours is one of them.

(Photo credit: James Farley post office; Fred Smith; Westport CT post office for sale, sold recently)  (More photos of the the James Farley, here)