The U.S. Postal Service Needs to Go

According to Monday's edition as well as Tuesday's edition of the New York Times, the U.S. Postal Service is attempting to avoid a default in its monthly $5.5 billion payment to the U.S. Treasury. The long and short of it is this: the quasi-government agency is faced with some looming (yet very likely) possibilities resting squarely on its shoulders:

• Yanking Saturday delivery for its residential and business recipients;
• Closing down 3,700 offices nationwide;


• Consolidating other post offices;


• Laying off 270,000 of its 574,000 employees;
and

• Altering retirement and health care benefits and programs that its dwindling employee base enjoys;

According to the Times on Monday, the costs and reasons for the declining use of the Postal Service are simply the following:

'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.The post office’s problems stem from one hard reality: it is being squeezed on both revenue and costs.As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.

The Obama administration unsurprisingly responded on Tuesday with the following:

The Obama administration said on Tuesday that it would seek to save the deficit-plagued Postal Service from an embarrassing default by proposing to give it an extra three months to make a $5.5 billion payment due on Sept. 30 to finance retirees’ future health coverage.

Patrick Donahoe, the postmaster general, speaking before the Senate. His office has proposed alleviating its fiscal problems by taking back an estimated $50 billion in pension overpayments.Speaking at a Senate hearing, John Berry, director of the federal Office of Personnel Management, also said the administration would soon put forward a plan to stabilize the postal service, which faces a deficit of nearly $10 billion this fiscal year and had warned that it could run out of money entirely this winter.

'We must act quickly to prevent a Postal Service collapse,' said Senator Joseph Lieberman, independent of Connecticut, who is chairman of the Senate Homeland Security and Governmental Affairs Committee, which held the Tuesday hearing on the Postal Service’s financial crisis.

Postmaster General Patrick R. Donahoe testified that even with a three-month reprieve on the $5.5 billion payment, the post office was likely to run out of cash and face a shutdown next July or August unless Congress passed legislation that provided a long-term solution for the ailing agency.

To help erase the postal service’s deficit, Mr. Donahoe has proposed several painful and controversial steps, among them, eliminating Saturday delivery, closing up to 3,700 postal locations and laying off 120,000 workers — despite union contracts with strict limits on layoffs.'

The Postal Service is on the brink of default,' Mr. Donahoe testified. 'The Postal Service requires radical change to its business model if is to remain viable in the future.'

Mr. Berry said the Obama administration would push for legislation to allow a three-month delay in the $5.5 billion payment. But he stopped short of endorsing a far-reaching proposal, backed by the postal service, to allow the agency to claw back more than $50 billion that two independent actuaries have said the post office has overpaid into a major federal pension plan. Postal Service officials say such a move would go far to alleviate the agency’s financial problems.

Mr. Berry said the administration was studying the proposal, but not endorsing or opposing it at this point.

For the longest time the agency has engulfed itself in an economic, financial, and political quagmire. Although it is in some ways configured like a private business, it is not functioning like one, and it certainly is not one. The prices of its stamps, envelopes, packages, and other services proceed to spike on an annual basis with no end in sight. New Jersey-based Rutger University's very own The Daily Targum scribed in an op-ed that the agency's labor costs "make up 80 percent of the USPS's operating costs" and that its own mail inventory "is so small these days the USPS cannot keep paying as many employees as much money as it currently does." (Bear in mind that the paper is crying havoc over the complete shut-down of the agency, saying that "it is still something we don't want to see." Why? Because, according to the Targum, "The USPS is a valuable federal service.")

The Targum also opposes "privatization" of the institution for the following reason:

[T]he increased privatization of traditionally government-provided services is a frightening thought for too many reasons to list here, and, therefore, we'd rather not have to rely on private companies for all of our mail needs.

This refrain is all too common from the minds of "privatization" (preferably, marketization) opponents. They believe that a federal post office must be maintained, and that Congress must rescue the agency and save its workforce from the impending forces of layoffs as forced upon by real, natural market forces working against the federal establishment, their concession that the agency is unable to remunerate its employee base as much as it used to due to the excessively low demand for its services notwithstanding. What the paper fails to figure into account is the health care and pension costs that are drying up the funds for the agency, which are mandated by the labor unions in their existing contracts. The unions as well as Congress have made it virtually (almost) impossible for the agency to craft its health care and retirement benefits plans, simply due to the political and protectionistic nature of these parties. Oh, and let's not forget that the USPS is protected by congressional edict from free market competition with any company that wants to jump into the game and offers consumers a better value and service that the USPS has failed to accomplished at its given, ongoing rate. This means that the organization is a legally-protected, government-approved, and government-imposed monopoly on the delivery of first-class mail and standard mail (once known simply as third-class mail). No other firm can legally challenge the USPS and provide more efficient products and services to customers because of the government cementing the Offices as the only legitimate provider of delivered U.S. and international first-class and standard mail; thus, Congress merely restricts access to mailboxes by the USPS. Other private mail firms are legally prohibited by law allowed to drop off deliveries to mailboxes.

The reason for this is that the prices charged by the USPS are universally uniform across the board throughout the States, irrespective of where its customers live. And the old congressional law that sustains the enterprise's monopoly on these services ensures that package deliveries are set at a uniform price based on the weight and volume of the contents within them, especially when it is cheaper than Fed-Ex or United Parcel Service (UPS).

The Constitution's own Article 1, Section 8 stipulates that Congress is accorded with the power "to establish Post Offices and post Roads." But just because the Constitution allows the government to get involved doesn't mean that the State should get involved, and that it should be granted an exclusive monopoly over mail service.

But how did the Postal Service become powerful? Throughout the 19th century, just shortly before the passage of the Postal Act of 1863, mail was dispersed from city to city where a post office would pick up the volumes, or an independent contractor handled the delivery. Then came the Postal Code of 1872, which put into place a local monopoly on mail delivery by outlawing private carriers. At one point these carriers numbered to 147 and pioneered some innovative services. For instance, they introduced postage stamps just before the Postal Service got into that business.

Before 1971, postal service was provided by the U.S. Post Office Department, which centrally planned the agency by fixing prices of its products and services and determined which managers would be charge. The agency was the biggest recipient of globs of congressional subsidies and an annual appropriations budget as set by the governing body. By the time the Postal Reorganization Act of 1970 was passed and signed into law, the Department was shut down and reallocated into what has become the USPS today, thus making it a quasi-public independent agency separated from the Executive Branch and structured to be a self-financing agency whose own existence and its operations depend upon the sales of its postage, mail products, and other services. According to federal law, it must cover its costs, and request the U.S. Treasury to lend funds to it (which is supposed to be limited to approximately $3 billion annually in bailout subsidies to its coffers and allow for a total debt ceiling of $15 billion).

What makes this firm so different from real private firms is that it carries privileges that other companies are not allowed to possess. For instance, it is not subjected to vehicle licensing requirements, and it pays no sales and property taxes. As Tad DeHaven of the CATO Institute noted a year ago:

It doesn’t have to pay parking tickets, and it has eminent domain powers. It pays to itself the income taxes that it would owe if it were a private business.

Understand this point for once: the USPS is more or less a wing of the U.S. federal government. The Postmaster General and a Board of Governors, along with some federal control and oversight by the Postal Regulatory Commission are unaccountable to the taxpayers and the American public at-large. The federal mail delivery organization in itself neither has any incentive to innovate, nor reduce its internal and external fixed and varied costs, nor enhance customer service and other areas in the name of efficiency, nor establish other ways to keep it financially and economically solvent.

And this claim that private companies are not capable of providing our needs is nonsense. A private mail service enterprise could provide physical delivery of mail at a much faster and cheaper rate than the USPS does and provide postage, packaging, and a variety of options and services for clientele that would be far superior in terms of innovation and quality than the USPS does. However, in the grandest scheme of things, the Internet and smart phone technologies have provided innovative means of electronic communications for customers by ISP and mobile phone carriers at a fraction of the costs that rival the high, exploding costs of the USPS, thus making physical mail delivery a relic of American history.

While DeHaven and other similar critics urge for the privatization (or marketization) of the organization, I dispute that notion. I call for the abolition of the firm and allow an unfettered free market to prop up and flourish, providing more quality and more pioneering products and services to consumers globally at the lowest price. This signifies an end of the U.S. Post Office, an idea whose time has ultimately come.

"Libertarians" or Libertarians, Part 1: The Real Advocates of Liberty Are The Original Leftists

In the late afternoon of Christmas Eve last Wednesday, sometime after my parents and I arrived at my brother's house to celebrate the holiday with him, my sister-in-law (his wife), and my niece (their daughter), my brother, my dad, and I sat at the table in his kitchen discussing politics (that is, his brand of "right-wing"/conservative with a heavy dose of libertarianesque Republican politics being monopolized in the discussion). These discussions have always been a politically religious tradition in the Barnett family on an annual basis, even if they are held on Thanksgiving Day and Xmas Eve. My mom, my sister-in-law, and my niece stepped out a few times for intervals of five to ten minutes, during which my dad, my brother, and I got into our political chats. (Interestingly enough, my sister-in-law, according to my brother, has grown quite intolerant of the political conversations that are often held at his house or anywhere with all of us together for dinner. Apparently, she can't stomach such discourse during those times together, from what I can gather.)

At one point during the talks, my brother, my father, and I found ourselves in a discussion over the ObamaCare bill that the Senate had just voted to pass its version of it. (The final vote tally is 60 to 39, with Biden presiding over the key vote on the mandate.) Now the Senate and the House (and even my sibling confirmed this at the table) are scrambling to match their provisions contained in their versions of the bill, so that they can draft a final bill to be passed by both chambers of the House and Obama to sign it into law.

(Keep in mind that, all his best intentions notwithstanding, my brother idealistically -- but not erroneously -- believes that the law will be successfully challenged by the courts on constitutional grounds. It's possible that the U.S. Supreme Court can and might overturn the impending law, but given the fact that most conservatives -- not to mention their right-wing populists and allies - have historically gone along with government programs once and long after they have passed, it stands to reason that this program will remain in place and be nearly impossible to abolish at the federal level.)

At one point in the conversation, (I'm paraphrasing here!), my brother states that when he talks to people regarding health care, they respond, "We have a right to health care!" My brother argues against that proposition (assuming those people with whom he spoke are of the progressive mindset), claiming that no one has a right to it because he takes the constitutional position that an individual "has a right to life, liberty, and the pursuit of happiness." (While the praxeology per se is valid, it is not a good argument to make against the so-called public option because it is a cookie cutter talking point that libertarianesque conservatives like him take.)

The reason for his argument against the "public option"? He says that it's taking money from those who didn't pay for it and giving it to those who can't. It's a fair and valid point, and quite a solid libertarian one at that. Who can rightfully argue against that? (The progressives can make a counter-argument in response to that standpoint, but that's a subject for another post.)

Of course, I interjected by saying that the same argument can be made about Social Security, and I made that point after he applied that same principle to Medicare. He even agreed that Social Security "should never have been created in the first place." It's nice to know that we concur on the principles, because his talking points are libertarian to the core. I even pointed out that those programs absolutely should never been created in the first place, and that I have told my listeners and guests on my BlogTalkRadio.com Internet talk radio show Liberty Cap Talk Live (specifically, some of those listeners who really don't get the point yet) that, once those programs are created, they eventually morph into something other than they were originally intended to be. (Interestingly enough, he agreed. I did even bring up my criticisms of the Big Players of the insurance industry who had a stake in this mess, but we were cut off because my mother, my sister-in-law, and my niece returned from their "in-the-garage" cigarette break.)

But this is what I wanted to ask him, and I wish I had the opportunity to ask him this but didn't have a chance to do so: "Do you oppose or support the big corporate players in the insurance industry (specifically the big corporate insurance firms like Blue Cross Blue Shield and BlueCare Network) that are on board with ObamaCare?" Furthermore, I wanted to ask him, "Do you oppose welfare in all of its forms? Or do you oppose welfare only for the poor, but support corporate welfare (or corporatism) all the way?"

I suspect he supports the latter. After all, his admission of his supporting the government bailouts of the Big Three and the automotive industry that transpired in the last few months of Bush's final term of his presidency (when I was at his house for Christmas Eve last year) is an overwhelming indication of that.

Herein lies the heart of the problem with my brother's thinking, including the mindset that dominates the old libertarian movement. The mentality that has long pervaded the libertarian movement is this: "Despite government intervention in the economy, corporations are still needed, are not the creature of the state, and are not protected by but are victims of the state. Oh, and we do need limited liability laws to protect the interests of our shareholders, specifically the small ones."

Thus, in corporate libertarianese (particularly those espoused by those self-proclaimed libertarians from both the CATO Institute and Lew Rockwell's Ludwig von Mises Institute), corporations are the apotheosis of laissez-faire and that they can exist without state-sanctioned privileges and guarantees and state-furnished subsidies. (Imagine the health insurance corporations that stand to gain everything once the state-provided, vile ObamaCare is set in stone. After all, consider how much tax money is riding on this bill by the entire corporate insurance establishment that's colluded with the state with this bill.) Furthermore, it's also another reason why many progressives revile libertarians for adopting Ben Steinan/Lawrence Kudlowesque rhetoric that has significantly dominated the vast majority of the movement, thus harming and scathing it in its entirety.

"Left-libertarian" a.k.a. ideologically pure libertarian/anarchist/agorist Sheldon Richman, who has been in the old libertarian movement for nearly 40 years, had this to say about the state of libertarianism as it stands today:

There are also good strategic reasons for associating libertarianism with the left and not with the right. The modern movement has, despite futile protests that we pro-Liberty activists are "neither left nor right," been placed on the right as sort of a hip variant of conservatism. Some of this comes from the observers' lack of perceptiveness, but much of it is the movement's own fault. A good deal of libertarian commentary sounds like corporate apologetics.

Sheldon is right on the money. Today's "modern movement" is seen by progressives and many other nonlibertarians as a "cool" aberration of the modern conservative movement. This is not a good PR image for the movement, whether we care to admit it or not. It does not bode well for us in the long run.

Furthermore, libertarians who take -- and not to mention embrace -- the unconvincing (and largely unbelievable) "neither left nor right" stance have given their adversaries excuses to think that conservatives and libertarians come from the same family when that is not so. Conservatives are fundamentally different from true advocates of liberty (whether those advocates use the label "libertarian" or not). Moreover, the movement has been infiltrated by shady opportunists and collectivists who seek to use the state to their advantage. Look at alleged "libertarians" like Wayne Allyn Root whose most recent book reads like a playbook for a Republican football team and former Libertarian Party activist and now retired Republican talk radio show host Larry Elder who fled the LP a few years ago because of its old non-interventionist position on foreign policy! He even has supported Bush's invasion and occupation of Iraq and Afghanistan consistently and the government's incessant intervention of the economy via corporate protectionism and mercantilism. Is that the image that we as pro-Liberty activists want to portray?

(Furthermore, how about the pro-preemptive war comments that GOP senatorial candidate Peter Schiff recently made? How would anti-war nonliberal leftists respond to that rubbish? Or how about Rand Paul's recent statements on the Gitmo detainees in his senatorial campaign's press release on the issue? What are civil libertarians and antiwar activists supposed to take away from that crud? Many of the defenders of those two candidates are "libertarian" [actually conservative] supporters of the Lew Rockwell/Ron Paul wing of the movement who, while trying not to come off as not very corporatist in rhetoric, appear to be very apologetic of the corporate state. Some of them take the "libertarian Republican" [quite an oxymoron to boot!], or what should be called the neolibertarian, position that an aggressive foreign policy and a solid national defense [conservative concepts, by the way!] will keep us safe from would-be terrorists and produce peace only by means of an offensive war.)

This is what "free market anticapitalist" Kevin Carson was referring to when he coined the term "vulgar libertarianism" -- the brand of libertarianism practiced by those "libertarians" who believe that today's corporate market would be what the free market entails if decades of government intervention and central planning had not been in the way. When libertarians have that attitude about the marketplace in that fashion, then they give the progressives legitimate reasons to discredit us and persecute us, thus making our jobs harder or even nearly impossible to remove the state from our lives.

Let's not forget that many free marketeers come off as very combative, very belligerent, and very antagonistic when a morsel of sympathy is given to working class laborers who are the true victims of government taxes, regulations, and pro-state business/corporate guarantees, protections, subsidies, and privileges. A number of those libertarians who complain about this spew this nonsensical attitude that a free market (especially one without state privileges, guarantees, and the like) would not last very long and that the current market, despite the government's incessant interventions, could not exist in the absence of the state. That assertion tells me several things: that ilk lacks an extraordinary amount of deep perception and objectivity, certainly fathoms the concept of a free market but has never experienced it in a real sense, and has never fathomed how the pains of government intervention have affected the poor and the blue-collar middle "working" class on all levels, physical, economic, mental, and psychological.

When libertarians become indifferent and cold to people who experience true cruelty and misery by defending rotten employers who treat their good employees like a pile of rubbish, it gives nonlibertarians and progressives an excuse to attack free enterprise and side with the state. Of course, there are rotten employees too, and that's a given in any business, yet that's not the point. Not only that, it's an unfair talking point, because libertarians (and conservatives as well) who employ that argument lump in the good laborers with the bad.

And that also raises another paramount standpoint as well: when shady, politically-protected firms abuse their good workers, and those libertarians come to their defense despite all that nonsense, that alienates those workers, thus pushing them into the arms of the politically-connected unions, the bureaucrats, and the politicians who will use them as political and campaign fodder to score some political points, even on the campaign trail. That transpires all the time during every election and legislative cycle. If the politicians, as opportunistic as they are, capitalize on the pains of the working class by appearing to be champions of the poor and the middle class, then those groups will flock to them and see their employers and the entire marketplace as enemies of the "working man."

This is a massive reason why libertarians of all stripes in the Liberty movement lose on economic liberty big time every single time, before, during, and after every election season. They will keep losing until they stop seeing big employers' workers as albatrosses on the necks of their businesses and understand that, without their customers and employees, employers don't have their businesses. If libertarians and employers do that, then the working class and the poor, who are the victims of the state like the entrepreneurs and every non-politically-connected businesses are, will side with them and support a real return to the free market. Why can't they just do that? What have we go to lose if we do exactly that?

The real advocates of liberty are the original leftists who support and advocate a voluntary society based on mutual consent, not the kind of society that these corporatists and their government cronies want to engineer for all of us.