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US Postal Service Bailout Imminent?
It has long been known that the United States Postal Service, in its current money-losing format, is unsustainable. The media has reported in the past that in order for this bloated government anachronism to be remotely competitive in the age of email and FedEx, it would need to cut hundreds of thousands of its workers. Even the USPS, via its largest union, the National Association of Letter Carriers, has admitted that the organization will need to undergo "tough sacrifices" although as the WSJ noted, "It didn't specify what concessions it would seek from members." And this is where it gets fun: because "just the tip", or even just talking about the tip, apparently is more than labor unions in this country can stomach. Enter Ron Bloom, Lazard, and the very same crew that ended up getting a taxpayer funded bailout for GM. From the WSJ: "The Postal Service's proposal to close thousands of post offices and cut back on the number of days that mail is delivered "won't work" and would accelerate the agency's decline, according to the six-page report by Ron Bloom, President Barack Obama's former auto czar, and investment bank Lazard Ltd., LAZ who were hired by the union in October." That's right: after all the huffing and puffing about "sacrifice" and austerity, the labor union took one long look at the only option... and asked what other option is there.
"Instead, the report says, the agency should raise its stamp prices, which are among the lowest in the world, and find new ways to profit more from its built-in advantage as the only entity to reach every American home every day." Well that... And the internet. "It should also replace its multi-layered governance system with a corporate- style board of directors whose members have entrepreneurial experience." Translation - let's just continue doing what we do, but kill demand for our services even more, because it is not the massively bloated expense side of the ledger that is the issue, it is how much the USPS charges. And apparently in mailman econo-logic, increasing prices leads to increasing demand, all else equal. At least this bailout plan came in 6 pages, as opposed to the 3-page one penned by Hank Paulson. Yet the kicker is that the "other option" is well-known: taxpayers get to fund another wholesale bailout of yet another worthless, ineffective government organization. But hey: there are hundreds of thousands of labor union votes, pardon, jobs to be saved. And with elections just 6 months ahead, is there any doubt what will happen?
More from the WSJ:
The proposals are the opening salvo in what is expected to be a long series of negotiations as pressure mounts on Congress to approve legislation to restructure the Postal Service, which has said it is in danger of becoming insolvent without changes to its business model.
The union's plan is one of several competing proposals—including the Postal Service's and bills in Congress—that are promoting rescue ideas, and it illustrates the deepening divide over how to remake the 236-year-old institution for modern times.
And the shocker:
Labor groups, for instance, generally oppose cuts to service. The mailing industry opposes higher postage fees. Many legislators say the Postal Service needs to close facilities—but not in their district. And a Republican-led bill set to be heard by the full House looks askance at any proposal that would allow the Postal Service to compete with private industry. That bill's backers say the agency should act like a business—to a point. "Reducing excess capacity and adapting delivery to America's changing use of mail is exactly what any business would do as technology changes the market," said Ali Ahmad, a spokesman for the House Oversight and Government Reform Committee.
In other words, "fix it", just don't make me lose anything in the process... or work harder of course. In the meantime...
The Postal Service is facing historic losses—more than $5 billion in its most recent fiscal year—that it attributes to a shift in communication habits in the digital age and to an unusual requirement imposed by Congress in 2006 that it fund retiree benefits decades ahead.
Ironically Ron Bloom is spot on. It is unclear however, if his statement was tongue in cheek:
The union concedes that some "shrinkage" in the system is necessary, Mr. Bloom said, but he added that the Postal Service's cuts will result in more revenue losses than savings.
He compared the Postal Service's strategy to General Motors Co. before its restructuring. "Their strategy was to lose slowly, to shrink to survive," he said.
Where Ron stopped short is that going from before to after restructuring involved billions in taxpayer cash. Yet unlike a just as bloated Chevy Volt post-reorg maker (not yet retrofitted with excess inventory Solyndra solar panels), at least the USPS can not stuff excess mail inventory in mail boxes. What it certainly can, however, is demand billions from taxpayers. Because, you know, if we just hope enough, things will change.
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The Fedex worker that threw the computer over a fence met his satisfactory requirement for efficiency. ;OD
The postal workers who have failed to forward my mail after two applications and a thirty minute discussion with a supervisor have lived up to their perceived obligations as well.
Forward your own mail. It is not the job of USPS to keep track of where you are moving, that is a courtesy thing they do, but maybe they have been reading all the smack you have been talking....
A privately owned delivery service could not take that attitude. When there is competition in the marketplace one can't simply refuse to provide desired and promised services for the reason that one is too lazy to give a damn. Also note that the post office has contracted with the sender of the mail to ensure adaquate delivery. I am not the only customer whom they are failing.
Sometimes it is pathetic to read how desperate some people are to find something they think they can link to government to bitch about. To my knowledge, the post office operates off of their own revenues and have done so since at least the 1980s. Everyone of you who pisses and moans about the post office costing you money and lazy employees costing you money are bitching in the wrong place. Taxes don't pay a friggen dime into the post office, in fact congress has found ways to take money FROM the post office so thet they can use it for their political handouts.
I could understand the resentment against the Post Office if it was a government agency costing taxpayers money. BUT it doesn't cost taxpayers, it has nothing to do with tax money. Explain to me what you are all bitching about!? UPS cost taxpayers nothing and Fed Ex costs the taxpayers nothing and the Post Office costs taxpayers nothing.
For fuck's sake, if you are going to whine and cry, try and get your facts straight before your mouth opens!
By the way, I hardly use the USPS anymore. I agree they are going to die a slow death due to the new technology. As long as this process happens without taxpayers paying for it, then I am prefectly happy to get the mail I do, mail the odd bill or two and let them be phased out by technology. It would seem others need to piss , bitch and tell lies about it all just to fulfill a fanatasy about the Post Office being a taxpayer funded entity, which they are NOT. Wake UP!
In the last audit it was discovered the treasury owed the post office 50 billion from overpayments. Post office ain't getting that back.
It is and has always been a cash cow for the government and they charge a fraction of what private enterprise can do.
So, can I post my rant after the fucking government bails them out?
Yes. But you must pretend to be a part of the "never saw it coming" crowd and wait until such protests would have no practical effect if you are to be respected by the more elite members of our society.
Yes, and I'll post one too.
exactly, the post office is fine, the problem is the fucking republican congress making them follow pension funding rules that no other agency or private company has to follow. The post office hands are also tied with respect to pricing, The post office would be fine if fucking congress would stop fucking them up ( same can be true in just about every industry)
Uh dude, the last time I looked there was a Dem president and a Dem Senate and a Dem house for 2 solid years to do whatever the hell they wanted. They still have the President and Senate majority and you blame the Repubs due to house majority that has been in place for a year. Dude talk about revisionitst history.
PAEA 2006. Who's revising what?
You are. notadouche specifically mentioned the action (or inaction) of a government overseen by a Democrat president. In 2006 the president was a Republican. Please address the original statement rather chasing straw men. The Democrats could have simply repealed any 2006 legislation in 2009 or 2010 if they were so disposed.
Why not switch the USPS over to a defined contribution pension plan, like most people in the private sector have?
Also, why not charge the same for junk mailings as for private letters? Half the time, the only thing I get is junk mail. If not for junk mail, postmen could skip half the houses. So each postman could handle a larger route and you would need less of them.
That IS what they have. Social Security and a 401K called Federal Thrift Savings. They got rid of Civil Service Retirement decades ago. Fact check first, speak second.
wow what a collection of misinformed loud mouths on this subject matter.
welcome to neo-hedge
Thanks to the brilliant minds at the USPS I and twenty others have been put out of work for no apparent reason. I was the manager of a contract post office until March 30th, that my family has held the contract to for the past 20 years. A contract that netted the postal service a million dollars per year and has since we have held the contract. This was due to some contract made with the union for what reason no one knows because the postal service is not talking, they did their best to hide the fact our contracts were about to be terminated. Best part of all they gave us zero compensation for the loss of our businesses or employees jobs. we even had to pay for the repairs for the dmamge they did removing their equipment. Not only did we get screwed every customer lost their PO box and their mail has been in limbo since. Now we have one post office for a city of 60,000 and its old and in the shitty part of town. The organaization needds to fail and every postal worker needs to be sacked, whatever gap this creates could easily and more efficiently be handled by UPS, Fedex or some other privatly owned company.
http://www.cpucpc.org/
http://www.youtube.com/watch?v=4zJFQg6UfJg&feature=youtu.be
http://waco.ynn.com/content/top_stories/282945/outcry-continues-over-temple-post-office-closure
Your story is further confirmation that central planners WANT the USPS to fail.
I understand your misgivings towards the post office, but would you have thought the same before your contract was ended? I guess that's a "no". It DID function.
let amazon buy them with their funbucks stock
cutting back on postal service is imbecility.....for all of the trillions of dollars spent on war and we can't find a few billion to keep postal service running, someone should be tarred, feathered, and burned....
Trillions are spent on war so the government should just send me ten million bucks. It all makes sense when you put things in perspective.
I have to say that the USPS is much better for packages than UPS or Fedex. With UPS or Fedex, if you miss the delivery you have to travel half way across town to pick up the package. And since they aren't open on Saturdays, you have to take time off work. Fedex does have a Saturday delivery service, but since you can never predict when they are going to arrive you are stuck at home the whole day waiting for them. Actually I make it a point not to buy things that must be shipped by UPS or Fedex.
Also, a first class stamp cost 5 cents in the late 1960's. Since prices have gone up at least 10X since then, a first class stamp should really cost at least 50 cents today.
UPS delivers in my neighborhood every weekday around 12:30. I know what day they are coming because their online tracking is up to date. They usually ring the bell when a package arrives or they'll place it inside the storm door if I'm not in. The PO might show up any time between 8AM and 4PM, their online tracking can be hours behind schedule, they never ring the bell and they leave the package in plain view. I've only ever had one package stolen from my porch and it had been delivered by the post office the day before it was expected with no delivery update posted on my account page. Thankfully private industry (in the form of Amazon) replaced the stolen items.
They are able to offer cheap because they are 14 billion in the hole, the taxpayer is about to be funding the lost cost.
In order to throw the USPS in the bag of government funded nonsense, ole Barnanke will have to pump a little more fairy dust into the system. So the USPS inflation mandate becomes one big fat negative feedback look to infinite. Where is my bailout, after 20 yrs of working for them I get a 250.00 unemployment check every week. I guess I am lucky, my father who held the contract gets nothing as do the other 19 contractors. The guy in Florida who for the past 23 yrs has been here running his CPU on an investors visa, well he gets deported back to the UK since he no longer has a business that employess Americans, gotta love how the government does business.
They gave the union in their last labor agreement the authority to close us and all other contract post offices down, so the union got what they wanted which was appparently more work since the are now 20 stations short. 20 stations that did not cost the USPS to operate, we generated alltogether close to 20 million dollars a year for them, they are in the hole so explain to me why they threw that much money away just to appease the postal workers union?
Can anyone give me a good example of government spending that was not a waste of money?
I can't think of a single Federal, State or local agency that is not staffed with overpaid morons, who spend most of their day pissing off the taxpayers money and when they are working it's usually involves stealing more of our money through licenses, permits or fees. If you don't believe this to be true than you are either a government employee or you are really into getting shit on.
No I have never had a pension or any expectation of one, I have never worked for the government I worked in the private sector, you know the one that barely exists anymore.
All I would expect is that the USPS would be held to the same standard as any other business that breaks a contract, they should not have a special get out of obligations clause that is not how contract law works for anyone but the government apparently. I do not tink anyone would e happy if their contract was give away in a third party deal, which was kept secret from you and then when you found out about it they lied and said"I don't know what your talking about, we would never cancel your contract". Then they cancel your contract, that is the Bullshit I have had to deal with from them.
Well thats my complaint about the Postal Service, maybe I will try punching a mail clerk next time they say something smart ass to me, that might make me feel better.
Would that still be considered "Going Postal?" I mean, do you have to be a postal employee?
NOW GET THIS THROUGH YOUR PAROCHIAL REPUBLICAN HEADS........SIMPLY BECAUSE SOMETHING ISN'T PROFITABLE DOESN'T MEAN IT SHOULDN'T EXIST. MOREOVER, JUST BECAUSE SOMETHING IS "PROFITABLE" DOESN"T MEAN IT SHOULD EXIST (GOLDMAN POSTED GREAT NUMBERS). THE POST OFFICE PROVIDES A RELATIVELY VALUABLE SERVICE TO MANY AMERICANS UNLIKE MOST BRANCHES OF GOVERNMENT. IF YOU ARE SO FANATICAL ABOUT IMPROVING THE FISCAL LANDSCAPE LOOK NO FURTHER THAN THE US MILLITARY OR CONGRESS. DID WE NEED A LIVE FEED AND A SPECIAL HELICOPTER JUST TO OFF BIN LADEN (WHO WAS GUARDED BY TWO PEOPLE)? HOW MUCH DID THAT MANHUNT COST? MY POINT IS GOVERNMENT EXCESS IS ABOUND IN THESE TIMES SO DON'T BE HYPOCRITICAL. NO ONE ON ZERO HEDGE HAS QUANTITATIVELY ASSESSED THE VALUE OF THE FUCKING US POSTAL SERVICE. THERE ARE INSTANCE WHERE P&L DON'T CUT IT. DO YOU FEEL THE INSTITUTION IS NOT WORKING ANYMORE? NOT OPTIMAL? FUCK YOUR FEELINGS AND THOUGHTS. GIVE ME MORE OBJECTIVE CRITERIA AND REAL NUMBERS NOT YOUR IDIOTIC AND FEMININE SOUNDING FEELINGS.
OK, how about this? Don't take and use my money for something I don't use. Quit stealing from me.
One word: Privatize
hah, you shitstain, you really don't understand the issues going on here at all do you? Privatization is just an excuse to sell off critical industries to buddies that make a killing on it. Then when the bill comes due to maitain anything they whine and scream about how broke they are.
One Word: NATIONALIZE
There doesn't even need to be a bailout. The only reason there is a problem here is because some shitstain got the brilliant idea of forcing the USPS to dump all their revenue to cover pensions for the distant future. Big shocker there, it was the GOP.
Postal Service tanks and UPS and Fedex are doing great.
Yet another business the government should get out of - government and unions - two toxic vultures that can destroy any business and can't compete.