Do We Still Need a Post Office?

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This is a blog mostly about three subjects: technology, politics, and economics. While I talk about other things, I usually try to tie them to one or more of the three. But it is hard to get the trifecta in any meaningful way. Which is why it was notable that earlier this week all the sites I read, the tech sites, the political sites, the economics sites all at once decided to cover the same story. The story of course is the end of Saturday mail and the slow torturous death of the post office.

Not So Obsolete

It is commonly thought that technology is killing the postal service. The rise of email and things like online bill pay have disrupted the postal service so much that it is headed towards the same fate as the US steel industry. This is the common trope politicians and sadly even the Postmaster General site as the reason the postal service is failing. Damn you technology you’ve John Henryed another American institution. Forgive me for saying this but this smacks of a total lack of vision. I’m sorry but the telegraph, the telephone, and the fax machine didn’t kill the postal service and I don’t think the internet will either. People who think the internet will kill the postal service misunderstand what the post services core product is. If the core product of the postal service was communication then yes, the internet is a much better technology which is why the internet has supplanted said telegraph and fax services. The core product of the post office though is its physical real world network. Until the internet can transport physical things the internet will not kill the post office.

If The Constitution Didn’t Mandate A Post Office, Man Would Create One

When people talk about doing away with the postal service they tend to under estimate the scope of the postal services offerings. At the post office you can yes send a letter anywhere in the country for a flat fee, but you can also verify your identity. The post office is one of the few places you can officially declare who you are and where you are that is accepted by… well everyone. The reason is the post office is backed by the federal government, through laws. A breakdown of the postal system would affect more than just correspondence it would change the way we do simple business. It would also severely over burden the other methods or verification we have. Think the DMV sucks now wait until all the post offices close. Throughout the history of this country the Postal Service has enabled companies to build and grow into international success. From the Sears and Roebuck catalogue over a century ago to Netflix today entire industries have been created by the robust cost effective and reliable post office.

Email Is Not Free

People keep on saying email is free, which is stupid. While the cost of sending an email seems nonexistent even a brief glance back at history would reveal this was not always the case. It used to be a fee tacked on to your internet service, and if you were using one of those “free” email addresses you weren’t taken seriously (because there was no verification system). Many people received email address at college but again, in contrast to the several thousands of dollars for college tuition it’s easy to miss that you paid for the service. Why does this matter? Because the use of “free email” is cited as the reason we don’t need the postal service. The fact that this is not true seems like a salient piece of information. Let’s start with the fact that despite our best efforts, we do not have universal broadband access, which in a web optimized for FIOS and LTE makes the internet hardly the most convenient system. But beyond that marginal cost does not mean free, Companies are able to virtually give away email by rolling the cost of email into the cost of their other services. The same is true in the physical world. FedeX purchased Kinkos to broaden their portfolio and stabilize their costs.

Don’t Let Congress Kill The Post Office

The only thing that will kill the post office is incompetence in the legislator. Most of the post office’s budgetary woes are due to the congressionally mandated prefunding of 75 years of benefits by 2016. A ludicrous requirement for any sane enterprise especially one operating near the edges of profitability in a rapidly changing market in which it’s very viability is supposedly in question.  Like I said the post office won’t vanish until the internet can transport things, something not out of the realm of possibility in this same 75 year time frame. But you may say given the rising cost of these benefits isn’t it simply prudent to secure some capital for these services? Yes it would and most companies would do that over the course of several decades. The truth is the purpose of this mandate was to shore up federal revenue shortfalls under the Bush administration. In other words the post office is subsidizing the federal government. That said removing this ridiculous mandate would not instantly sort out the books of the post office. They will need to expand their revenue. The best proposal I’ve heard for this is allow the post office to provide basic banking services. Essentially expanding their money order service to include check cashing, bill payments and wire transfers. The additional revenue generated from these services could easily return the post office to sustainability.

 

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