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US: USPS problems
  • The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

    “Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, said in an interview. “If Congress doesn’t act, we will default.”

    In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers — nearly one-fifth of the agency’s work force — despite a no-layoffs clause in the unions’ contracts.

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    Read the rest at: http://www.nytimes.com/2011/09/05/business/in-internet-age-postal-service-struggles-to-stay-solvent-and-relevant.html?_r=2
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  • 33 Replies sorted by
  • Ah yes, the result of Congress and its mandates, instead of letting competition and the market forcing the Post Office to operate efficiently....The USPS cannot lay off workers, close off unprofitable and impractical offices, or control its pension/health care payments without Congressional action. No wonder they're in trouble.
  • Actually, I think what we are seeing is competition forcing the USPS' hand. In the past, and still for most countries, government run postal services were essential. Times have changed, though, and now in the USA there are viable alternatives. It's unsettling to see this, I understand, but I'm not sure this isn't just the kind of change that happens naturally as a consequence of competition.

    Chris
  • In Europe, the post office acts as much like a bank as a place to send letter... times change. Did we all fear for the future when the phone company faced real competition? Change is scary for many, disruptive at times, and needed forever.
  • +1. We should embrace changes. Let's be proactive. Asians embraced new reality quickly. They went through acute pain. They are doing just fine. Why can't we?
  • "Change is scary for many, disruptive at times, and needed forever."

    very well stated:-)
  • @cbrandin: The USPS has no competition. It has a monopoly on mail services. That's the start of its problems. Lack of real competition meant that it could be inefficient and unable to adjust to changing conditions, unlike services like UPS or FedEx (which don't deliver mail, but deliver packages). On top of that, its board of governors and leadership acted like the USPS was a personal money machine, demanding all sorts of perks and helping to mismanage the service. Add in that Congressional action is needed to do just about anything necessary--they need Congressional approval to close offices, to cut Saturday delivery, to get out of Union contracts, etc.--and the whole mess is exactly because the USPS is a forced monopoly with no competition and ineffectively run by bad managers (at least in the past) and Congress. In fact, there's even an entire territory run by Congress; it's called the "District of Columbia" and it's not well run either.
  • @MrAnthony

    I like such simple approaches. Make something "competitive" and it'll cure all problems.
    But sad thing is - IT DON'T WORK. So, called "invisible hand of the market" can't even wax your carrot in reality.

    All you is is process of dismantling social services. USPS is one of such services.
    This is why you constantly hear about it's problems, and why money spend is calculated in such a way to cause such problems.
  • @MrAnthony

    Sure the USPS has competition - UPS & FedEx for packages, and email for mail. The USPS has lost a lot of business as a result. All I was saying is that I see changes are necessary for the USPS and that's what is happening. I don't think eliminating the USPS altogether is a viable option.
  • @Vitaliy: Please do not put words in my mouth. I never said that making something competitive would cure all problems. That is simply a simplistic straw man argument to try and make me look stupid and you are much smarter than that.

    USPS is hardly a "social service." Quite simply, it's been badly managed, unable to adjust because of bloated bureaucracy, crippled by an inability to change. It's required by law to make crazy amounts of payments for health and retirement coverage far in excess of what is actually needed. For years it couldn't raise rates without Congress interfering in some way.

    Since you don't live in or really understand the U.S., let me explain some realities to you. The USPS got by financially for years on bulk mail--basically advertising sent through the mail system. It's the original junk mail, as any American with a mailbox would understand. Nobody else could deliver that mail, by law, and for years it was profitable. It was a government-backed monopoly. E-mail and the Internet have killed the bulk mail business, as well as first-class mail. So basically, you've got an organization that can't raise its prices thanks to Congress, can't lay off it's workers thanks to Unions and Congress, can't close offices or cut back services thanks to Congress, is forced to pre-fund benefits excessively due to Congress, and is losing business because it operates with essentially 18th Century technology/business model in a 21st Century digital world. This isn't about dismantling social services. If it were, it would be getting tax dollars and wouldn't be about to go under. It's about bad management, an outdated business model, and what happens when government goes too far in dictating how a business should be run. It should be a warning to everyone who thinks the government will do well running public health in the U.S.
  • >Please do not put words in my mouth. I never said that making something competitive would cure all problems

    Yet you again go same route :-)

    >Since you don't live in or really understand the U.S., let me explain some realities to you.

    It is so kind of you. I know many detailed parts of USPS problems and proposed "solutions".
    State post is social service by all standards, in all countries.

    I see that you are fan of "free market", "efficiency" and 21st century digital world.
    But I can tell you simple thing. All of this things are fucking myths.
    I can even tell you that you'll hear few surprises from "modern" UPS and DHL camps quite soon :-)
  • I hope they stay because it is the only affordable packet system to buy things in the USA. Companies like bH and lots of ebay sellers would loose a lot of money from overseas buyers like me. For example I never buy anything from Adorama because they only have USPS and FEDex.
  • Yes, I am a fan of efficiency (as opposed to inefficiency, like the GH1 codec), the digital world (or we wouldn't be here) and parts of the free market (really, I like having choices and options, but some things definitely need to be monitored/regulated from airlines to utilities). Fucking myths? You mean like real communism? :-)

    The USPS is by all standards is a social service? Perhaps you could elaborate on these "standards," because it's not like welfare or social security, where money or benefits are handed out. Otherwise, just about everything connected to the govt is a social service then. Is the IRS a social service, because nobody's going to be eliminating that any time soon here in the U.S.

    I like how you create another straw man argument about UPS and DHL, because competition and the market doesn't mean that (as your wrote in your earlier straw man argument) all problems are solved. It means businesses are free to fail as well as to succeed, in trying to meet a need. Hopefully, those that succeed are meeting the need and/or the want. Beta had better quality than VHS, but VHS recorded longer which is what peopled wanted. Sometimes the best doesn't succeed. Sometimes nobody succeeds.

    @danyyyel: I too hope the postal service survives, which it will because it's too big to fail and Congress will have to act. They deliver fairly quickly and the value for real letters is good. They need to do some serious fixes, like adjusting hours so I can get my packages after 5pm, making it easier to drop off packages for shipment, etc. It's easy to throw a package into a FedEx drop box or find a FedEx office in a large city. Good luck these days finding a mailbox. Years ago, when email was starting up and people actually paid for e-mail, they could have set up servers and offered to give everyone a free USPS email address, had they had any vision. They need people in charge that have vision, talent, and management skills.
  • >Yes, I am a fan of efficiency (as opposed to inefficiency, like the GH1 codec), the digital world (or we wouldn't be here) and parts of the free market (really, I like having choices and options, but some things definitely need to be monitored/regulated from airlines to utilities)... The USPS is by all standards is a social service?

    OK, here is situation.
    You worked hard all your life at USPS.
    You also have chronic disease, thanks to the work.
    Now according to efficiency plan your post office will be closed and will be thrown out with cut to your pension savings and other cuts resulting in problems with medicine. Also in your small town no post office will be present anymore, so you need to go 80km to nearest post office.
    You can even send complains via email, thanks to digital age.
    This is how your fucking "efficiency" looks in real life.
  • Postal Service plan would cut 35,000 jobs
    Postmaster General Patrick Donahoe, desperate to cut billions from its payroll, said today he will attempt to close 252 mail processing operations around the country-- a move that would add a day to the time it takes to deliver many first-class letters.
    Donna Leinwand reports that the cuts proposed today do not require congressional action, Donahoe said. The Postal Service cannot wait for Congress to act, he said.

    Via: http://content.usatoday.com/communities/ondeadline/post/2011/09/postal-service-plans-to-cut-35000-jobs/1
  • Just my humble opinion:

    1. Any job, even sitting doing nothing, can result in disabilities as we get older. Do post workers have more physical stress than a dentist? Probably not. Just a different type of stress. Dentists save their income and plan for retirement....can't demand pension anymore.....I'll stop here on this point.
    2. USPS definitely needs to be more efficient.
    3. 7 out of 8 of my last residences have community mailboxes. Post workers don't really have to walk all that much anymore. Just drive to a cluster of box and insert the mail.
  • @Vitaliy

    OK, here is situation.
    You worked hard all your life at USPS.
    You also have chronic disease, thanks to the work.
    Now according to efficiency plan your post office will be closed and will be thrown out with cut to your pension savings and other cuts resulting in problems with medicine. Also in your small town no post office will be present anymore, so you need to go 80km to nearest post office.
    You can even send complains via email, thanks to digital age.
    This is how your fucking "efficiency" looks in real life.
    <<<<<<<<<<<<<<<<<<<br />
    I'm inclined to agree. I'm calling bullshit on this Republican idea to privatize everything. They've privatized the military, the prisons, and what's next? They're starting to find out that privatizing makes a few people rich but doesn't deliver services cheaper or better. It's just a way for politicians an their backers to get rich off the public tax funds. The welfare queen with 14 kids is a myth, their toll on the the public is small. The real bogeyman is free enterprise, it doesn't care about anything other than share prices and bonuses, we end up with lousy, outsourced services.
  • I suggest we should start privatizing the privatizers. How does that sound?
  • @GOODEMPIRE
    >I suggest we should start privatizing the privatizers. How does that sound?
    That sounds very perverted :-).
    In general, privatization of state property is to sell the property by a private entity. In general, because there are many cases where this is done by way of stealing public property (eg, Poland in 1989). What would be something like sprywatyzujemy statement? Either we do it legally - sell, or steal. It is also the opposite direction - the nationalization. Nationalisation can be done in two ways - buy a property from a private landlord or as it was in Poland after 1948, theft.
  • @ Mihuel I would not call that a theft, rather an expropriation. When something is taken away from the crooks and thieves (or bourgeois Nazi collaborators like it happened many times in Eastern Europe after it was liberated by the USSR) it is not thievery by any account. My point was if somebody is calling for privatizing more (as a sort of remedy for the current economic incurable pains) he should start that privatization from his own backyard. These crazy neoliberal myths only work until you find yourself or your own family in poverty, hunger and unemployment. The world has just started reviewing the lessons of the Great October Revolution, 1917. There is a long way ahead.
  • @GOODEMPIRE
    Both of us know that we have a totally different view of history :-). This is very good because I am sick listening to myself. But we have some points in common.
    1) Soviet Union defeated Nazi Germany heroically (no country has suffered greater losses, the glory of the heroes)
    2) The Great October Revolution broke out because: carat was inefficient, criminal system in which only a handful of people had a good.
    >My point was if somebody is calling for privatizing more (as a sort of remedy for the current economic incurable pains) he should start that privatization from his own backyard.
    I agree with you but I remember my country before 1989 and it was very poor and sad country.
    Today's system is inefficient because there is a powerful uncontrollable power of financial institutions not subject to state authority. Private interest of individuals is more important than the interests of society. Is the remedy for these problems is the revolution? Please DO NOT! But without revolution will be possible some meaningful changes?
  • @ Mihuel "Private interest of individuals is more important than the interests of society." — this is the fundamental illusion used as a justification for the bloodiest crimes the Western Imperial system committed during the last 100 years (or more). In reality it doesn't care about individual freedoms at all.
    Just think — every human society needs some sort of collective will to survive. Not to thrive, not to dress or dine or buy new Iphones every now and then, but to survive physically. It was not so obvious during the Cold War as it is now when the planet's resources are pushed to the limit and there's no more countries the West can silently exploit. So like in every tribe, like in every Army (and I use these extreme examples because for the tribe or for the military unit survival is the only, the ultimate objective) the word or the freedoms of an individual do not mean a thing if compared to the goal of the group. Throughout its history the "liberal", capitalist world had sacrificed its citizens' rights or even lives for the sake of profit or "national interest" so many times that is absolutely naive to believe that the westernization of the Slavic Europe will ever bring freedom to its residents. Yes, you were rather poor in the Soviet block, but your children were safe, you had healthcare and high quality education affordable to everyone, your daughters were not starred in the cheap porn movies or trafficked as prostitutes, your streets were free of drugs and safe to walk at night. You traded all this to get an abstract freedom. Was it really worth it? What freedom? To be bought and sold? What happened to your manufacturing sector? To your culture? A freedom for the few? For the tiny clique of lucky thieves? I believed in that crap too until I realized there's no wealth or Iphone that will mean to me more than the safety and decent future for my kids. That is what it is about now - die consuming or survive through self-restrain and mobilization.
  • @goodempire that's odd, 'liberal' means just the opposite here in the USA.
  • @jaecjaec I know it well. The confusion derives from the US though, because both your liberals and conservatives are actually liberals in everything related to the economy. While in Russia being a communist means to be conservative and a liberal is usually someone promoting free market and privatization. This is an interesting cultural phenomenon, because communism actually took over from the strong Othodox Christian tradition, which essentially claims that it is BAD to be rich. While the US is based on protestant/evangelical capitalist ethics. God wants you to prosper — that is what your right wingers pray to. Russia tends to believe in the opposite.
  • @jaecjaec
    Goodempire's definition is actually the classic definition, in the USA we've sorta subverted the word to mean the opposite of the long established meaning.