American Gargantua

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The Postal Service will lose $7 billion this year, and way more in the future. We are told that salvation lies in reinventing itself. But because its only Constitutional function is to operate a mail service, that may not be possible.

Colonial Americans considered keeping in touch so vital to a people that one of their first united acts of rebellion in 1775 was to create a Post Office. Twelve years later the Constitution vested that power in Congress. Until 1971, the postmaster general was a cabinet member in the line of succession to the presidency. In that year, the Post Office Department became the Postal Service, a quasi-government agency that is also a profit-making corporation responsible to a board of governors. The Postal Service has a monopoly on first and third class mail, and owns your mailbox.

The Postal Service is not like a bank, which can always find new ways to make money. It's more like the auto industry, which once had a de facto monopoly except for funny, little foreign cars. If that industry rebounds, it will be because of the improved use of resources and better vehicles. And because people need cars and many want to buy American. The Postal Service actually is a beast like no other: a service run like a manufacturing business with only one immutable product. It's funny, little cars are UPS and FedEx. But cyber technology has made postal monopolies almost meaningless.

The Service is unique in another way. Many laid off auto workers are terminally unemployed. The 600,000 postal employees, second to Walmart, are civil servants with federal benefits. While no more re-trainable than those from other assembly lines, career postal workers with two years employment, though occasionally fired, are never laid off.

The Postal Service has tradition and a deep reserve of good will. Thirty thousand post offices provide a local, daily and cheap service for which millions still can find no substitute. Unfortunately, while these factors make it too big to fail, with its commitment to an obsolete, manufacturing model, it is also too big to succeed. And no bailout is on the table here.


With a Perspective, I'm Richard Friedlander.