By Lambert Strether of Corrente.
Article 1, Section 8, Clause 7 of the United States Constitution reads:
[The Congress shall have power to t]o establish post offices and post roads
This enumerated power, as Schmoop (I love Schmoop) points out, wasn’t trivial:
For most of the first century of American independence, the Post Office was by far the largest and most important organization within the federal government. Congress has the power to set up Post Offices and to build roads connecting them
James Madison explains the design behind this powerful grant of authority in Federalist 42:
The powers included in the THIRD class [of powers lodged in the general government] are those which provide for the harmony and proper intercourse among the States, [e.g.] to establish post offices and post roads. The defect of power in the existing Confederacy to regulate the commerce between its several members, is in the number of those which have been clearly pointed out by experience.
…A very material object of this power was the relief of the States which import and export through other States, from the improper contributions levied on them by the latter. Were these at liberty to regulate the trade between State and State, it must be foreseen that ways would be found out to load the articles of import and export, during the passage through their jurisdiction, with duties which would fall on the makers of the latter and the consumers of the former. We may be assured by past experience, that such a practice would be introduced by future contrivances; and both by that and a common knowledge of human affairs, that it would nourish unceasing animosities, and not improbably terminate in serious interruptions of the public tranquillity.
An originalist might note that neither the Framers nor Madison have any notion that the United States Post Office (USPS) might require a “business model” or seek to make a profit; the intent is to promote “harmony and proper intercourse among the States” by preventing states from charging each other rents (“levies”) in the manner of robber barons. This goal is expressed by the Universal Service Obligation (USO), described by the United States Post Office in 2018 as follows:
The mission of the U.S. Postal Service is to provide the American public with trusted, affordable, universal service. Congress and the President set forth this mission by recognizing the Postal Service’s critical role in commerce and in binding the nation together. While not explicitly defined, the Postal Service’s universal service obligation (USO) is broadly outlined in multiple statutes and encompasses multiple dimensions: geographic scope, range of products, access to services and facilities, delivery frequency, affordable and uniform pricing, service quality, and security of the mail. While other carriers might offer delivery on a universal basis, the Postal Service is the only carrier obligated to provide all aspects of universal service at affordable prices. To ensure funding of the USO, Congress and the President established the Private Express Statutes (PES) and the mailbox access rule, which together comprise the postal monopoly.
Of course, most requirements can be specified and implemented in multiple ways; in 2014 the USPS Office of the Inspector General wrote that “the Postal Service’s USO is long overdue for updating and clarification.” One such “update” would be privatizing the Post Office, once a bipartisan project, now (given Trump) less so. That project is a fine example of the neoliberal playbook; Jim Hightower gives the ugly details here. Unexpectedly, and happily, the project is stalled.
USPS Privatization is Currently Stalled
There are two key documents. The first is the administration’s plan to reorganize the Federal Government: “Delivering Government Solutions in the 21st Century Reform Plan and Reorganization Recommendations” (for clarity, I’ve edited out the talking points from the neoliberal playbook; primarily the pension obligations scam). From the Recommendations:
USPS has extremely high fixed costs as a result of relatively generous employee benefits combined with a universal service obligation that is understood to require mail carriers to visit over 150 million addresses six days per week…. A new model that adequately finances USPS while meeting the needs of rural and urban communities, large mailers, and small businesses is needed… This proposal would restructure USPS by aligning revenues and expenses to restore a sustainable business model and possibly prepare it for future conversion from a Government agency into a privately-held corporation…. USPS privatization through an initial public offering (IPO) or sale to another entity would require the implementation of significant reforms prior to sale to show a possible path to profitability… To address these major issues and identify solutions, possibly including private ownership, the President has issued Executive Order 13829: Task Force on the United States Postal System. The Task Force will conduct a thorough evaluation of the operations and finances of the Postal Service and make recommendations for reform consistent with this reorganization proposal… The report will be available by August 10, 2018.
Two key points. First, the adminstration proposes a two-step process: Restructuring, followed by sale. Second, a Task Force will be established, and the Task Force will deliver a report by August 10, 2018.
The Task Force report is the second key document, but as of November 26, 2018, it has not yet appeared. (This has happily has not prevented postal workers unions from organizing rallies against privatization[1], or making large ad buys.) Here is a rough timeline:
August 8, 2018: Trump’s Postal Task Force Has Recommendations Ready for the President (Government Executive):
Trump tapped Treasury Secretary Steve Mnuchin, Office of Personnel Management Director Jeff Pon and Office of Management and Budget Director Mick Mulvaney to head up the task force, but their staffers have led the charge. The group held meetings over the summer with an array of stakeholders, industry groups and employee representatives.
While the report is completed and expected at the White House by Friday’s deadline, multiple individuals engaged in discussions with the task force told Government Executive the administration will not make it public immediately. The report is already being circulated within the administration, those individuals said, but the White House will not widely release it for at least a couple of weeks.
The task force is by all accounts playing its cards very close to the vest, with no details of its proposals making their way out to the groups it met with over the last few months.
August 30, 2018 White House Expected to Keep Postal Task Force Report Secret Until After Midterms (Government Executive):
The Trump administration is planning to keep secret until after the mid-term elections a report delivered to the president earlier this month with suggestions for reforming the U.S. Postal Service, according to individuals with knowledge of the plan.
August 31, 2018: Senate Hearing on USPS Task Force Report Postponed (Multichannel Merchant):
The report was delivered to President Trump on Aug. 10… The Sept. 5 hearing was to be before the Senate Committee on Homeland Security and Governmental Affairs. No new date has been set, pushing out any potential legislative action indefinitely.
September 26, 2018: Task force’s recommendations to Trump remain a mystery (Linn’s Stamp News):
[T]he planned Aug. 10 release of the study of USPS’ finances has passed without any disclosure of what the presidential task force recommended to Trump.
That silence has led to several public predictions that the panel’s proposals will “never see the light of day.”
Two of the largest mailing organizations, the Association for Postal Commerce (PostCom) and the Alliance of Nonprofit Mailers, were telling its members just that in August.
On Sept. 13, the DC Velocity website, which covers transportation issues, echoed that sentiment.
It said that the “Trump administration has shelved the release” of the postal report, citing unnamed “people familiar with the matter.”
Trump has been briefed on the panel’s recommendations, Velocity said, and was unhappy with its findings.
Michael Plunkett, president of PostCom, said the Velocity account is “consistent with what I have been told.”
Stephen Kearney, executive director of the nonprofit mailers, said, “I’m still assuming it will be released by the end of the year because a Treasury spokesperson said so.”
Why Is USPS Privatization Stalled?
It would be irresponsible not to speculate![2] I can think of a few reasons:
(1) The rural vote. As is well-known, rural voters break heavily for Trump. Trump may not wish to alienate them by killing off one of their few community centers remaining after deindustrialization, which Post Office reforms focused on “fixed costs” often try to do. At least not until after 2020.
(2) Trump’s beef with Amazon. Reuters:
A Senate hearing about reforming the U.S. Postal Service that could have scrutinized what Amazon.com Inc (AMZN.O) and others pay for package delivery has been delayed, three sources familiar with the matter told Reuters, moving back President Donald Trump’s effort to hike the world’s largest online retailer’s rates.
(This is the August 31, 2018 hearing mentioned above.)
Trump has repeatedly attacked Amazon on Twitter for treating the Postal Service as its “delivery boy” by paying less than it should for deliveries and contributing to the service’s $65 billion loss since the global financial crisis of 2007-2009, without presenting evidence [Vox: “Maybe Trump is somewhat right].
Trump’s attacks on Amazon have gone hand-in-hand with attacks on its founder and Chief Executive Jeff Bezos, who privately owns the Washington Post, which has published several articles critical of Trump’s campaign and presidency.
Trump has described the newspaper as Amazon’s “chief lobbyist.” The Washington Post’s top editor has said Bezos has no involvement in its news coverage [no doubt!].
If Bezos and Trump have their squillionaire horns locked in some way, it makes sense that the Task Force recommendations would stall.
(3) The spoils have not yet been divided. Nobody talks about Post Office real estate, which seems odd to me, since they have rather a lot of it. HuffPo:
But it also owns 8,621 properties (totaling about 318 million square feet of interior space), and about 500 acres of vacant land.
Most of that owned real estate is prime, downtown real estate in every town and city in America — the main Post Office and the neighborhood branches in cities, suburban branches, and big operations centers. The land is scattered all over the country, but pretty much none of it is in wilderness areas.
How much is it worth? Nobody really knows. The USPS, like every government entity, doesn’t regularly appraise its properties. But there is an estimate nosed about by the Right; the [Scaife-funded Institute for Research on the Economics of Taxation (IRET)] reported in a 2003 paper that the USPS carried its properties on its books at $15 billion, and that in 1999, it reported that properties it sold went for about seven times book value.
So by the Right Wing’s estimates, the owned USPS property portfolio is worth about $105 billion.
$105 billion! That’s real money! Interestingly, the USPS recently replaced its old real estate broker — CBRE, whose chair, Richard Blum, is DiFi’s husband, how cozy — with Jones Lang LaSalle (JLL). “In 2017 JLL was named one of the World’s Most Ethical Companies by the Ethisphere Institute for the tenth consecutive year. So perhaps the USPS is clearing the decks for some reason. In any case, Trump used to be in real estate. So perhaps he has strong… views on how the swag should be divvied up.
Anyhow, that’s all I can think of off the top of my head; readers may wish to speculate further. Note, however, that these considerations — which are not mutually exclusive — could also be complicated by the two-stage structure imposed by the Task Force. Especially for real estate: Which tasks are to be allocated to the first phase, restructuring, and which to the second phase, post-sale?
Conclusion
The administration being what it is, the Task Force recommendations could be released any day, and the privatization goons would spring into action, making my speculations obsolete. But until that day comes, I’ll take the win, temporary though it may be. Oh, and why not purge our thinking of neoliberal clap-trap, and bring the purpose of the Post Office back to the original, harmonious intent of the Framers?
NOTES
[1] I linked to a Google search because doesn’t seem to be an aggregation of the rallies. The last aggregation I can find is at Labor Notes, from 2011.
[2] The Trump administration is often depicted as chaotic and out of control, as in many cases it is. However, in some cases — trade, and nominating judges — the administration has proven to be both competent and disciplined; it’s foolish to underestimate them. The Task Force looks to me like one of these cases. Conducting a Task Force, producing a report, briefing the President, and then burying the report, all without any leaks, is not an easy thing to do in Washington, but the administration seems to have pulled it off.
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Or really? With Amazon killing malls, and malls having killed rundown retail, real esate for what? Apartments?
Not so prime in CA. Maybe in old cities like NY.
Thanks for another good backgrounder, Lambert.
What a spectacularly bad idea. Privatize means allow some weenie(s) to profit from selling off the real estate and crapifying the service while raising the prices. Better that Congress remove the shackles from the service and allow it to do its job
Banks have a fear of USPO Service banking. Fighting for the Post Office is like fighting for the United States. It is a uniformed service.
The political scientist Edward Hallet Carr said you don’t ask the Post Office to fight your wars nor ask the army to deliver the mail. It was an FDR Failure to ask the Air Corp to deliver mail.
I’ve wondered if the Post Office relations internationally ought be part of the State Department. Amazes me that mail moves as well as it does internationally. UPS in France slowed a priority package to a major diplomat from me that had to do with French UPS workers, a private firm that didn’t care to force a standard of delivery. I’d of been better off mailing the package, a Videotape, via the USPO.
“Give us back our post office!”
Real estate is a real consideration. Trump loves what he took. All that territory is in bronze “Dedicated to the Service of Americans”. Morale at the Post Office has been under attack and they are afraid of being Air Controlled.
I tell all my post persons I support the USPO. I want to see Post Office Banking.
I want to see a PO Bank too – but I dread the trough-snarfing that would result.
Great idea – No-interest accounts based entirely on short-term T-bills. Use debit cards and GIRO to ensure no overdrafts. PO branches could also distribute silver coins (gold-backed coinage being illegal under IMF rules). This also forces real competition among the primary-dealers for the remaining part of govt debt.
Bad idea – Govt in the ‘business’ of making loans. Or doing anything under the fractional-reserve model. Or unions rent-seeking off of that money system.
This is all bad. The Post Office is the government structure that serves all people equally. It’s like a road or a school, a public utility that benefits all. Taking it private will be the ruination of 250 years of goodness.
The world is upside down. Bad is good, good is bad, Democrats are Republicans, Republicans are …? I don’t know but everything, and I mean everything, is upside down.
The passage from madison says it all…
…A very material object of this power was the relief of the States which import and export through other States, from the improper contributions levied on them by the latter. Were these at liberty to regulate the trade between State and State, it must be foreseen that ways would be found out to load the articles of import and export, during the passage through their jurisdiction, with duties which would fall on the makers of the latter and the consumers of the former. We may be assured by past experience, that such a practice would be introduced by future contrivances; and both by that and a common knowledge of human affairs, that it would nourish unceasing animosities, and not improbably terminate in serious interruptions of the public tranquillity.
post office privatization doesn’t make me feel tranquil…
Reading the works of the Founding Fathers typically provides numerous examples of how incredibly smart and ethical they were overall. By comparison today’s lot are unethical dolts participating in their own irrelevance while attempting to cash in while they can.
A dystopian vision of the future (privatised) USPO seems a bit like a physical version of the ‘net neutrality free’ internet.
I know what will happen if your Post Offices get privatized. They will be mostly closed down and instead collection centers will be set up. That means that you will get a text that you have mail (how handy – unless you do not have a mobile!) and then you will have to drive to the collection center to access your digitized PO Box. Good luck getting parking when a whole area’s citizens are also trying to get their mail. Larger parcels you will have to collect from another center as those PO Boxes will not hold them. Tough luck if you live in the country and have a long drive to go get your mail. That is the reality of what a privatized Post Office will be like as they tried to do the same in Oz. They put an ex-banker in charge who got a fantastic salary but could not get support for privatization. The person that followed him got a regular salary because of the uproar over his fantastic salary.
Rural House members (mainly Republicans) will go bonkers, since it will mainly be their constituents who will get the “more efficient” services and lose their local post offices and rural mail service.
Between this and GM becoming more efficient after investing their tax cut windfall in plant closings and layoffs, the Trump voters who thought they were at the table may now realize they are on the table. The only question is whether or not they are being served rare or well done.
In the meantime UPS and FEDEX will make out like bandits delivering mail and packages at triple the cost.
I cringe every time I hear about privatizing the PO. I’d hoped this idea was dead & gone, but obviously not.
Last week a girlfriend said she heard the price of stamps is increasing again.
I told her to save her whining for when it’s privatized. Then she’ll really have something to cry about. We all will, I predict.
Of course, privatization will also kill any hope of banking at PO’s.
“Trump has been briefed on the panel’s recommendations, Velocity said, and was unhappy with its findings.”
Why? Was there not enough profit built-in for him & his cohorts (yet)?
“USPS privatization through an initial public offering (IPO) or sale to another entity would require the implementation of significant reforms prior to sale to show a possible path to profitability”
It may be that they discovered that you cannot provide the services, as specified in the Constitution, of the USPS profitably. And I suspect that any reforms that CalPERS-ize it enough to make it possibly profitable can be challenged as unconstitutional.
I suspect a privatized postal service would cause significant changes to the law, especially for bills and debt collections.
No bill, no debt?
From the link, Jones Lang LaSalle:
I’m betting the vast majority of average California residents, didn’t even have a clue. None of the ones I spoke to (they weren’t on the internet all day long, they would’ve gotten fired if they were; only the managerial class, paid writers and Tenured Academia can get away with that and financially survive), in Silicon Valley, knew.
When I spoke to Silicon Valley Postal Employees, they didn’t even seem to have a clue (they weren’t on the internet all day long, they would’ve gotten fired if they were; only the managerial class, paid writers and Tenured Academia can get away with that and financially survive).
No thanks to the repulsive California Fourth Estate Editors of The Newz, and many of the USPS’s Striving Managerial Class – who can be stunningly ugly and traitorous to the employees they ‘supervise,’ and the public at large – that’s why the term Going Postal was coined.
A Non Profit Post Office Service is a vital necessity, it’s horrifying that so many would like to destroy that service to humanity.
(Oh and f DIFIBLUM, an analogy of everything that’s despicable and deadly about Capitalism, and the Politicians, and other Sub Humans who gorge on it.)
While Richard Blum was still engaged with Perini, the company was an early winner in the distribution of no bid contracts in Iraq – all this while his wife sat on the Senate Intelligence Committee. Not a coincidence me thinks.
There’s really nothing nice you can say about the couple.
Well, they are superannuated, so they have that going for them, which is nice. /s
They weren’t at all superannuated when they began their moral crime spree, so I’m bewildered by your tying that into why they are horrid.
One’s physical age in adulthood has nothing much to do with signifying a persons amorality, from what I’ve witnessed.
> They weren’t at all superannuated when they began their moral crime spree, so I’m bewildered by your tying that into why they are horrid.
They may be superannuated when they cash out, but they were young and spry when they started their scam. See my comment on the neoliberal playbook below.
Single payer world benefit the USPS more than any other organization in the USA- it would remove that 75 year healthcare pre-funding obligation.
Somehow I think it is not just the properties that are attractive. The retirement pre-funding might
have not only been a ploy to put stresses on the USPS, but also a nice hidden gem to raid as well.
Aye, you see to the heart of the matter.
The USPS is full of hidden gems to raid.
That’s an excellent point. The plays in the neoliberal playbook are not driven by quarterly results, but can in fact operate on a long-term, even dynastic scale.
But what would Madison have really thought if he could order shoelaces, Pepto Bisomol, and a Ring Video Doorbell, then have them all delivered in two days to his home via privatized, or now even “GIg”itized delivery services?
What is wrong with these people. Obviously their hearts are too small, and their brains are too smooth.
No one says the navy has to make a profit, or the marines. But these morons are always whining about the post office and amtrack not making a profit.Considering the work and usefulness, of these entities, a small bit of extra funding coming from our collective purse is a no brainer. I would rather pay for things like a postal service, or a nice train ride,or even the latest adventure from the nasa space program. These things contribute to our quality of life. I would rather see the defense dept come up with matching funds for all the money “it can’t find”, as a give back/penalty. which could go to something useful. What is that ;100 billion a year? or something.
Obviously trump(the chump) got an earful from his friend VLAD.” the trick is to make a fortune off of liquidation of formerly state owned infrastructure and enterprises. Look what we made of the old soviet assets. a fortune for me and my friends. He probably told him he can make even more money by selling off gov’t property, than his dad did building public housing for the gov’t(while skimming and overcharging ,;like his dad.
Another stupid idea, from the people who tear gas women and children. hoorah.
> No one says the navy has to make a profit, or the marines.
Not yet. See Snow Crash, p. 144:
If you want an example of what an open borders world could look like, Snow Crash is a fine example.
I think lambert’s got a good start on a list of possible explanations.
I’d add that small businesses, an early group of trump backers, still use the post office to send mailers and gin up new business. Internet ads are locked down by google…everyone already hates the never-ending robo-dials…paid mailers are still a good channel to reach customers. Driving up that cost would frustrate a lot of small-medium sized businesses.
> I’d add that small businesses, an early group of trump backers, still use the post office to send mailers and gin up new business.
Excellent point. I might add that at least in Maine as flyover country, one of the few ways to make money is to bring it in from out-of-state. Lots of people who do that need the mail. (There are also small presses to consider, which are labors of love, to be sure, but not less valuable for that.)
In Salt Lake City, the usps leases a building and isn’t getting it lease renewed because the land is valuable right now. It’ll probably end up a parking lot, of course. Also in SLC, the local conservative news likes to bash usps because they refuse to pay parking tickets but the letter carriers have nowhere to park legally and do their job.
I don’t think my fellow Utahns realize just how many people are employed by USPS here. Its like the third largest employer and it’s still a good job since our cost of living isn’t as high as other metro areas.
I grew up in rural Idaho and the post office was where all community info went up, and where I put up fliers to babysit at 11 years old. I even got a couple of phone calls and gigs. It would be a shame if usps closed in rural towns.
I left a tweet on the cutting room floor that gave a similar example in Chicago. Account name: @CondoShark
I remember reading way back about the Feinsteins’ venality on this…remarkable (or not) that exposure of this kind of thing generally has zero negative effect on them. Our “public servants” and their circle of fellow parasites can cash in and if they suffer a little bad press, well, it’s all eventually lost in the news onslaught… or perhaps voters just shrug it off because they assume they’re all corrupt…the whole system is corrupt, which it is…just think we need way more anger.
Thanks for this post- it’s important.
https://www.nakedcapitalism.com/2013/09/senator-diane-feinsteins-husband-selling-post-offices-to-cronies-on-the-cheap.html
https://www.alternet.org/news-amp-politics/dianne-feinsteins-husbands-real-estate-firm-poised-make-1-billion-selling-post
And essentially the same thing happening up north? Disarm the workers as part of the end-goal?
https://www.reuters.com/article/canada-mail-strike/canada-passes-legislation-to-end-month-long-postal-strike-idUSL4N1Y21NE
“Is it time to get rid of Canada Post?
https://globalnews.ca/news/4567926/privatization-canada-post/
I am amazed that I can send a letter anywhere in the country for .50. Adjusted for inflation, postal rates have been pretty constant since inception according to Wikipedia. It works! It ain’t broke! It provides amazing service! Leave it alone!
Our geniuses in Chicago political power “sold” our street parking meter business to a secret group of “investors” and now we are paying five times the old rates to park in the city. If we do not learn from history…
Take a look at our privatized prison systems’ costs. We want more of that? Not me!
I would put the privatization of Postal Services in the same category as burning the furniture. My wife’s family evacuating from Poland to East Germany in the Spring of 1945 burnt the Mahogany and Walnut furniture last because it was difficult to cut up and was considered valuable. This was in the mansions allocated to refugee families by the Wehrmacht. Cooking, and heating to ensure survival was key. Abandoning people in rural and remote areas is one of the first steps taken when countries are in decline. Next is likely to be public transit in large cities. Last will be industries supported by the MIC lobbyists.
> Next is likely to be public transit in large cities
Cuomo is doing an excellent job of that right now.
A horrible, no good, very bad idea. The PO operates at cost. It serves all Americans equally, something abhorrent to neoliberals. It is the way those unable to afford computers and high-cost, low quality Internet service communicate with their government, pay their taxes and bills, and mail the odd Christmas card. No private alternative would operate as widely, as uniformly, or as cheaply.
The PO’s real estate parcel, on the other hand, neoliberals would consider an under-utilized resource. That’s the pearl-clutching description offered by Europeans for why it was essential to take Native American lands from their inhabitants and properly utilize their resources.
Privatization also means destroying the large PO workers union, and tossing the PO’s’ pension and benefits schemes. All unalloyed, if unsung, benefits for neoliberals. None of that is good for American civic culture, American workers, American businesses, or American government.
Contrast American attempts to privatize the PO with French moves to add to postal workers jobs by having them acts as a roving “neighborhood watch” for the elderly and shut-ins on their routes. Then there’s the lost opportunity of opening a PO savings bank in the US, a function often provided by European post offices. Such banks provide, at cost, essential services to millions of people who cannot afford high-cost High Street banking, let alone the predatory accounting and fee models routinely adopted by large US banks.
> Contrast American attempts to privatize the PO with French moves to add to postal workers jobs by having them acts as a roving “neighborhood watch” for the elderly and shut-ins on their routes.
What a brilliant idea. At that to the Post Office bank. Can any French readers or expats point me to links on this? (Use the email at the bottom of Water Cooler please.)
Here are two, printing out the full cites:
https://www.theguardian.com/world/2018/nov/23/care-package-french-postal-workers-helping-lonely-older-people
https://www.connexionfrance.com/French-news/Postal-workers-will-watch-over-your-elderly-parents