Peter Orszag: Privatize the Post Office

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    Jul 31, 2012 2:57 PM GMT
    Interestingly he suggests that government has failed with the Post Office and to maintain confidence in the government, the Post Office should be privatized.

    http://www.bloomberg.com/news/2012-07-24/best-fix-for-postal-service-is-to-take-it-private.html

    Those who believe in the usefulness of government must be vigilant about making sure all its activities are vital ones, since the unnecessary ones undermine public confidence. With this in mind, Congress should now privatize the U.S. Postal Service. [...]

    The Postal Service faces three problems: First, Congress has not given it the permission it needs to cut costs and raise revenue -- and lawmakers seem unable to approve even modest reforms. Second, its market has been declining for years, as e- mail, electronic payment and other alternatives to traditional mail have grown. Third, the economic slump has caused a further drop-off in mail volumes. [...]

    [P]rivatization has become the best path forward, mainly because it would take Congress out of the picture. As New York Times columnist Joe Nocera recently argued, "the problem is that neither the management nor the workers really control the Postal Service. Even though the post office has been self-financed since the 1980s, it remains shackled by Congress, which simply can't bring itself to allow the service to make its own decisions." And Congress won't do so, as long as the post office remains part of the government.

    The Postal Service has many assets that could be managed more efficiently, if Congress got out of the way. In addition to its 32,000 post offices, it has 461 processing facilities, monopoly access to residential mailboxes and an overfunded pension plan. These assets would attract bidders. Consider, for example, that many processing facilities and post offices sit on valuable real estate, and it may be smarter to sell many of them than to keep them. [...]

    The U.S. Postal Service has a long and storied history. Yet it is now struggling because the world has changed and because congressional sclerosis has prevented it from adapting to the new realities. The best way to modernize it now is to move it out of the government.
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    Jul 31, 2012 5:42 PM GMT
    Please Orzag lost any shred of credibility when he left the administration to work for Citigroup, the worst of the TBTF banks with an epic record of corruption and malfeasance. icon_rolleyes.gif