I use the United States Postal Service quite a bit. Probably 90% of the financial transactions I conduct are reliant on this service. Recently, the USPS announced a $2.2 billion loss for the first quarter of the year. Not good. This Weekend Journal’s primary editorial calls it like they see it—the bailout is coming.
A photographic representation of the currently negotiated USPS labor deal.
The questions Americans should be asking are obvious—Why can’t we treat the Post Office more like a private company? For starters, despite the failures of pension structure and wage scaling within their newly negotiated contracts, the system works. I say this only based on my experiences of sending and receiving mail. Very low failure rate there.
We ship our parcels generally through other service providers. Most packages are samples received from our suppliers and provided to our clients. The main reason we elect these services are the much lower associated costs with using FedEx or UPS. USPS isn’t set up quite the same. My rural carrier, for instance, drives around in a compact Subaru wagon. Not much pickup and dropoff capabilities in that thing, but there generally isn’t much need for it.
I’m not sure we have a good idea how much any bailouts are even going to cost anymore. This is some bickering over semantics, but WSJ is wondering in a roundabout way the same thing. All the while, the Federal Government is effectively out of money, and the trickle down eventually hits everyone. There are too many currently working in government positions and fulfilling government contracts, and one weak link in the system affects many far down the line.
If the United States gets serious about itself in the coming decade, we will be fine. The uncontrolled public-sector spending and unfunded private mandates will have to be reigned in soon. James Freeman’s Weekend Interview with Stanley Druckenmiller inspects this issue’s ramifications. The question, as always, is: Will we ever learn?