Sabotage of Postal Service can risk lives

A number of people on my neighborhood association list-serve report problems with their mail delivery, including not getting medications and pension checks in a timely way.

Postmaster General Louis DeJoy’s recently took a lot of mail-sorting machines out of service and stopped overtime work, which he admits will slow down mail deliveries.  Delays in delivering medications can risk lives.

Some e-mails blame our local post office staff, but this is something that only happened in the past month or two and I don’t know of anything that has changed there at that time.

One of the under-reported aspects of the Trump administration is how he and his crew have undermined the normal workings of government.  We see this in Trump’s undermining of efforts to fight the coronavirus pandemic.  Now we see it again in his support for DeJoy’s policy.

LINKS

USPS slowdown delays delivery of life-saving meds by Christina Farr for CNBC.

Postal changes delay mail-order medicine for vets by Hope Yen for the Associated Press.

It’s Very Hard to Rebuild a Bridge Once It’s Torn Down by Jason Kottke for kottke.org.

Why I Love the Post Office (And You Should, Too) by Mindy Isser for Current Affairs.

The Postal Service and its last-minute defenders

Click to enlarge.

Democratic leaders are rightly angry because the U.S. Postal service might not be able to deliver mailed-in ballots in time to be counted in the 2020 election.

Postmaster-General Louis DeJoy has cut overtime pay and taken mail sorting machines out of service, even though he acknowledges this will delay mail deliveries.

This is supposedly an economy measure, but a Monmouth University poll says 72 percent of Democrats say they might vote by mail, while only 22 percent of Republicans say so.  DeJoy’s policy just might change the outcome of the 2020 elections.

The reason the U.S. Postal Service is in dire straits in the first place is that Congressional leaders, both Democratic and Republican, have deliberately made it so.

The only reason Democratic leaders are concerned now is their perception that Postal Service failure will affect their chances of winning this year’s elections.

Don’t get me wrong.  All their outrage is fully justified.  But if they hadn’t been willing to put the Postal Service on the slide to privatization in the first place, while selling off its prime real estate at bargain prices, there wouldn’t be a problem now.

Here’s the back story, as reported by the great Matt Taibbi.

During the Bush years, the U.S.P.S. was put on the “high risk” list by the General Accounting Office, headed at the time by a future Pete Peterson foundation CEO named David Walker who would later come out in favor of privatizing the post office. The GAO recommended cuts and other measures to address the “rapidly deteriorating” financial situation of the U.S.P.S.

But when an analysis by the Office of Personnel Management was released in November, 2002, it turned out the U.S.P.S. had a “more positive picture” than was believed. The U.S.P.S. was massively over-paying into its retirement fund, headed for a $70 billion surplus.

Then in 2003 the Postal Pension Funding Reform Act was passed, which among other things forced the U.S.P.S. to pay the pension obligations of employees who had prior military service.

A few years after that, in 2006, the “Postal Accountability and Enhancement Act” passed with overwhelming support in both houses, forcing a series of incredible changes, the biggest being a requirement that the U.S.P.S. fully fund 75 years worth of benefits for its employees.

The provision cost $5.5 billion per year and was unique among government agencies. “No one prefunds at more than 30%,” said Anthony Vegliante, the service’s executive vice president, at the time.

The bill also prevented the post office from offering “nonpostal services” as a way to compete financially. This barred it from establishing a postal banking service, but also nixed creative ideas like Internet cafes, copy services, notaries, even allowing postal workers to offer to wrap Christmas presents.

Coupled with the pre-funding benefit mandate and other pension changes, this paralyzed the post office financially, making it look ripe for reform.

By 2012, there were calls for the U.S.P.S. to eliminate 3,700 post offices (a first step toward eventually closing as many as 15,000) and 250 mail processing centers. [Senator Bernie] Sanders, along with other Senators with large rural constituencies like Jon Tester and Claire McCaskill, managed to change the bill and save a lot of the mail processing centers.

The Senate that year also cut the amount of required pre-funding for benefits and began refunding the U.S.P.S. for about $11 billion in overpayment for retirement costs.

A few years after that, in 2015, the Post Office Inspector General issued a blistering report about CBRE, the company that had served as sole real estate broker to the U.S.P.S. from 2011 on.

The report found that CBRE had been selling and/or leasing post office properties at below-market prices, often to clients of CBRE – a company chaired by Richard Blum, the husband of California Senator Dianne Feinstein.

The passing scene – October 12, 2015

From Donald Trump, Hints of a Campaign Exit Strategy by Maggie Haberman for The New York Times.

Donald Trump has not spent the money or done the organizing necessary for a serious presidential campaign.  He has made a stir and had a lot of fun precisely because he did care whether he won or lost.   Having gotten a lot of free publicity for the Trump businesses, I think he’ll step aside at some point and try to be the Republican kingmaker.

The Fight for $15 Is Raising Wages.  Now It’s Time for Step 2: Unions by David Moberg for In These Times.  (Hat tip to Bill Harvey)

Low-wage workers overwhelmingly want the right to organize unions.  A lot of them see the Fight for Fifteen movement as their union—a radically different kind than the historic AFL-CIO model.

GOP Probe Into Planned Parenthood Funding Comes Up Empty by Jennifer Bendery for the Huffington Post.

Rep. Jason Chaffetz, R-Utah, chair of the House Oversight and Governmental Reform Committee, has found no evidence of wrongdoing.  He said he’ll keep looking.

What We Lose With a Privatized Postal Service by Katherine McFate for Other Words.

Solar & Wind Reach a Big Renewables Turning Point by Bill Randall for Bloomberg Business.  (Hat tip to Bill Harvey)

El Niño could leave 4 million people in Pacific without food or drinking water by Ben Doherty for The Guardian.  (Hat tip to my expatriate e-mail pen pal Jack)

The passing scene: March 20, 2015

When a Summer Job Could Pay the Tuition by Timothy Taylor as the Conversible Economist.

When I attended college in the 1950s, any young American could earn enough working at a full-time summer job, and a part-time job during the school year, to pay tuition at a state university.  The USA is generating just as much wealth per person as it was then, so there is no inherent reason why that shouldn’t still be possible.

Wrong-Way Obama? by William Greider for The Nation (via Truthout)

The world economic situation is very much like it was on the eve of the Great Depression of the 1930s.  World leaders need to work together to create jobs, and to write down debt that is a burden on economic growth and never going to be paid anyway.  The Transpacific Partnership Agreement is the exact opposite of the kind of international agreement that is needed.

Who Owns the Post Office? by Mark Jamison for Save the Post Office (via Angry Bear).

The Founders of the United States didn’t think of the Postal Service as a business.  They thought of it as a means of binding the nation together.   Benjamin Franklin, once a postmaster, would have been shocked by closing of post offices in small towns because they didn’t generate enough traffic.

How Parents in One Low-Income Town Are Raising Hell to Save Their Schools by Alan Richard on Alternet.

School teachers will tell you that the key to better schools is parents getting involved.   Parents in a small town in Mississippi have figured out how to make that work.

Peasant Sovereignty? by Evanggelos Valliantos for Independent Science News.

A recent study of nine European countries is the latest study to confirm that peasants and small farmers are more productive than large mechanized farms based on industrial agriculture.  If decision-makers are concerned about feeding the world, they should be thinking about how to get land in the hands of hard-working peasants who have little.

Turning Japanese: coping with stagnation by Roland Kelts for The Long+Short.

Japan is considered a failure by some because its economy isn’t growing.  But the Japanese economy and culture work well for the Japanese.  We Americans could learn something from them.

The Postal Service came through on Christmas

The following from Business Week shows why Americans need their Postal Service.

There was a lot of post-Christmas discussion about how UPS fumbled its last-minute holiday deliveries, and FedEx apologized for some late-arriving packages, too.  What went largely unmentioned, however, was that the stellar performance of the U.S. Postal Service.

The government-run competitor was swamped with parcels just like UPS and FedEx were, with holiday package volume 19 percent higher than the same period late year.  But there were no widespread complaints about tardy deliveries by USPS.

The postal service attributes its success to meticulous planning.  The agency says it noticed “higher than expected volume” in packages in early December and made adjustments to avoid delays, delivering packages on the three Sundays before Christmas in its busiest markets.  Sue Brennan, a USPS spokeswoman, says this was in addition to regularly scheduled Sunday deliveries for Amazon.  The USPS also delivered 75,000 packages on Christmas Day.

The USPS and its private-sector rivals have different business models.  Unlike the government-operated service, the two private companies have fleets of airplanes and are better known for urgent deliveries than the USPS is.  That’s what apparently got them into trouble.   According to CNN, UPS ended up needing to make more holiday season air shipments than it had anticipated.  FedEx says 99 percent of its ground shipments arrived on schedule but hasn’t provided information about its airborne parcels, Bloomberg News reports.

Two things could happen as a result of UPS and FedEx’s difficulties: People might order earlier next year so presents don’t have to be travel by plane, and big retailers such as Amazon, a major UPS customer, might look for more ways to move packages on the ground.  Either outcome will probably benefit USPS.   The postal service may not be celebrated for speed, but when it comes to getting stuff to people on time in the holidays, the 238-year-old agency is tough to beat.

via Businessweek.

Who will get that Postal Service pension fund?

The U.S. Postal Service operated at a net loss of $4.95 billion last quarter.  But it would have made a profit if not for the payment of $5.13 billion to the Retiree Health Benefit Fund.

In other words, the Postal Service would be making a modest profit if not for the absurd requirement that it fund employees pension benefits for 75 years in advance.  I don’t see any reason for such a requirement except to make the Postal Service fail.

When and if the Postal Service does go bankrupt, what becomes of that pension fund?  I’m pretty sure the money will not be used for the benefit of jobless former postal employees.

Mail delivery is a function of government specifically mentioned in the Constitution.  It is a public service that should be continued.

I do have a good guess as to what will become of the Post Service’s prime real estate.  It already is being sold off at bargain prices to private developers.

If the Postal Service goes under…

Unless something changes, it is only a matter of time—maybe a very short time—before the U.S. Postal Service goes out of business.  The USPS has all the hallmarks of a failing business.  It is cutting back on service, letting employment fall by attrition, driving its remaining employees to work harder, and resorting to short-term expedients to keep going.

When and if the Postal Service fails, I predict the following things:

• An uptick in the U.S. unemployment rate.  The U.S. Postal Service employed 528,458 people in 2012, the lowest number since 1978 and down from a peak of  797,795 in 1999.  For comparison, General Motors employed 91,000 before filing for bankruptcy.
• Rate increases, service reductions or both from Federal Express or United Parcel Service.  Both companies rely on the USPS to fill gaps in their service.
• A sell-off of the Postal Service’s assets—buildings, vehicles, computers and much else—at bargain rates.  The Postal Service doesn’t keep track of the market value of what it owns.  Its purchase cost for its land and buildings was $27 billion, but much of the its real estate holdings are in prime locations in the center of town, and undoubtedly worth many times the original price.

Mail delivery is one of the functions of government established by the U.S. Constitution.  There is no good reason why it can’t continue.  One problem is the mandate that the Postal Service fund the retirement benefits of employees 75 years in advance—some of whom may not be of working age before the USPS is defunct.  No private business would ever assume such a burden. While this mandate has been temporarily eased, the larger problem is that, although Congress in 1970 mandated that the Postal Service be self-supporting, it did not grant the Post Service’s managers the same authority that corporate managers have to set rates and determine what services to offer.  So it has a mandate to compete, but in handcuffs.

So-called conservative Republicans in Congress have along sought to abolish or privatize the Postal Service because they oppose public service on principle.   I give them credit for at least fighting for their principles, which is more than I can say for the majority of the so-called liberal Democrats, including President Obama, who do not stand up either for their principles or their core supporters.

Click on You Should Be Outraged By What Is Being Done to Our Postal Service for a fuller report by Dave Johnson for Alternet.

America’s bargain postal rates

Kevin Drum of Mother Jones looked at the new bill enacted by the Senate and noticed one thing missing—a increase in postal rates sufficient to cover costs.

Take a look at countries around the world that have smaller volumes of mail than us: they all charge higher postage rates. They have to. And as volumes keep declining in America, we’re going to need higher rates here too. Right now, a first-class equivalent stamp runs 75¢ in Germany, 72¢ in Britain, 82¢ in France, 98¢ in Switzerland, 97¢ in Belgium, and 63¢ in the Netherlands. There’s no way that we can stay at 45¢ as volumes decline and pretend that somehow everything will be hunky-dory.

But allowing the price of a stamp to go up is apparently even more of a political taboo than closing rural post offices. I suppose Democrats are afraid of annoying granny and Republicans are so intent on busting the postal carriers union that they don’t like the idea of anything that brings in more revenue. We are ruled by idiots.

via Mother Jones.

Postal rates are set by an agency called the Postal Regulatory Service.  Under a 2006 law, the price of first-class mail stamps, periodical delivery and other services in which the USPS is “market dominant” can be increased only by such amount as is necessary to keep pace with the rise in the Consumer Price Index.  The USPS is free to increase prices of services in which it is “competitive,” such as priority mail or commercial package delivery.

My impression is that the Postal Service’s main problem is an excessive requirement pre-paying pensions.  The bill passed by the Democratic-controlled Senate eases that requirement, saving the Postal Service $5 billion a year and allowing it to reclaim $11 billion in excess payments.  Whether it will survive the Republican-controlled House of Representatives is another question.

But Kevin Drum makes a good point.  Our so-called “snail mail” is a real bargain.   It’s one respect in which our government service appears to surpass foreign governments.  Why get rid of it?

Click on Rearranging the Deck Chairs at the Postal Service for Kevin Drum’s full summary of the bill.

Click on Senate approves bill to help United States Postal Service for the Los Angeles Times’ report on the bill.

Click on In praise of the U.S. postal service for my earlier post on the Postal Service.