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Laramie Movie Scope: Bad Economics

Essay: Save the US Postal Service

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by Robert Roten, Film Critic
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May 3, 2021 – Like a lot of people, I use the U.S. Postal Service (USPS) a lot, and, like a lot of people I have noticed the recent deterioration of USPS service, slower deliveries and higher fees, during the past year. Movie rentals slowed down, for one thing.

I rent movies from both Netflix and from a lesser known company, 3D Blu-ray Rental. Netflix, whose primary business is streaming video content, still mails DVDs and Bluray disks to millions of customers as well. People like me who have home theaters, movie screens, projectors, surround sound systems, 3D video, high definition and 4K equipment, still get better picture and sound from disks than from streaming services, particularly since I don't happen to have a super fast broadband connection.

Both Netflix and 3D Blu-ray Rental rent disks by mail. They sitll base their business models on the way the USPS used to work. Those business models are negatively impacted when mail deliveries slow down. For instance, 3D Blu-ray Rental has a subscription plan that allows you to rent up to five disks per month, one at a time, but my subscription cost per disk goes up if it takes more than a week or so for each disk to get to me, and this is not the company's fault. This is due to the actions of the USPS.

Slower, more expensive mail deliveries also hurt other kinds of businesses, most notably Amazon and Ebay, and countless smaller businesses that rely on USPS. Slower, more expensive mail service is a hallmark of the current Postmaster General, Louis DeJoy (he assumed office in June, 2020) who proposes more of the same in the future.

DeJoy's plans for the future of the USPS call for slower mail deliveries and higher fees, along with reduced hours of operation at Post Offices around the country. How does this help the customers of USPS? DeJoy argues these actions are needed to save money because USPS is going broke.

I saw a kind of libertarian argument defending DeJoy in the AVS forum (www.avsforum.com) that goes like this: “The Postal service is not typically funded from taxpayer money. And Congress tied their hands years ago with the retirement fund. DeJoy was finally a person that knew what he was doing. To truly fix the postal service hard decisions need to be made. It can't keep going at the rate it has been, losing money regularly.”

The USPS has been buffeted for years by a political tug-of-war by politicians who want to privatize it, fighting with other politicians who want to keep it a strictly governmental service. The result of this fight could end up being the worst of both worlds.

But is USPS really going broke? Even if it is, is this the real reason for these proposed cutbacks and price increases? USPS is not a private company, but if it was a private company, reducing the level of service to its customers, while at the same asking customers to pay more, seems like the way to lose business, not gain it. Maybe that is DeJoy's real goal.

DeJoy's plans for the future of USPS are defensible for a monopoly, which USPS is not. These actions are understandable if they are designed to aid the competitors of USPS, such as UPS or FedEx, or if they are designed to weaken, or to get rid of USPS entirely, or perhaps to demolish the American Postal Workers Union. From a purely business standpoint, they don't make sense to me. What are DeJoy's goals? Here are facts that may shed some light on this question:

According to a December 27, 2019, Fortune article by Nicole Goodkind, a task force appointed by President Trump recommended rolling back collective bargaining agreements for postal workers and selling off pieces of USPS to private companies. The same article mentions a 2018 White House Office of Budget and Management recommendation to privatize some USPS functions and completely ending USPS package deliveries.

DeJoy is an appointee of President Trump, and was a major contributor to Trump's campaign. Trump opposed voting by mail, and he was also a bitter opponent of Washington Post owner Jeff Bezos, founder of Amazon. Trump wrote this about a proposal to increase voter participation by mail-in voting, “They had levels of voting, that if you ever agreed to it you'd never have a Republican elected in this country again.”

Voting by mail has been shown to increase voter participation. Republican legislatures all over the nation, following Trump's lead, are in the process of passing laws, including new restrictions on voting by mail, to make it harder for voters to vote. Democrats used mail-in ballots in far greater numbers than Republicans did in the 2020 presidential election. Slowing down the mail would seem to fit into this overal Republican strategy.

Trump also criticized USPS package rates for Amazon, saying they are too low. It appeared that the mail slowdown implemented by DeJoy was intended to hurt the timely delivery of ballots in the 2020 Presidential Election. The slowdown would also seem to negatively impact the timely delivery of Amazon packages. If DeJoy tries to increase Amazon's package postal rates, that would be another indicator of intent.

Of course last year's mail slowdown was impacted heavily by the Covid-19 pandemic (despite emergency pandemic funding from Congress) as package volume increased by 50 percent and many postal service employees got sick, but that is probably a temporary situation, what I am talking about here are future plans for USPS to slow down mail deliveries and increase postal rates.

The facts supporting these suspicions about political motivations are unclear, but it does look suspicious. Here are some more facts which may be relevant to the slowdown in mail deliveries. Louis DeJoy and his wife owned stock in companies which compete with USPS. According to a USA Today fact check dated Aug. 13, 2020:

“Louis DeJoy and his wife, Aldona Wos, reported between at least $30 million to just over $75 million in assets from XPO Logistics, J.B. Hunt and UPS. All are competitors with U.S. Postal Service operations. While government records confirm their ownership of the assets, the exact value of the holdings is not clear from the records.”

As for USPS going broke, it really isn't, except for a couple of Republican, libertarian-style accounting tricks referred to in the AVS forum post above: “The Postal service is not typically funded from taxpayer money. And Congress tied their hands years ago with the retirement fund.”

What's that, you say? That refers to “the Postal Accountability and Enhancement Act, which requires the Postal Service to create a $72 billion fund to pay for employees’ retirement health benefits for more than 50 years into the future.” Passed by the Republican-controlled Congress and signed by President George W. Bush, also a Republican, in 2006. And, yes, the federal government can, and does help fund USPS from time to time. It seems suspicious that this health benefits funding law, passed by Republicans, is being used as a justification for a mail slowdown which directly benefits Republican candidates.

The law sounds reasonable, and it seems prudent to pre-fund some retirement benefits, but does this law make good business sense? Is this practice common in business, or in other government services? No, it isn't. “According to Bloomberg, prefunding the health benefits of retirees ‘is a requirement that no other entity, private or public, has to make’ (quote as cited in Wikipedia).”

It makes good business sense, then, if you want to want to eliminate the phony deficit of USPS, that you repeal this law, which accounts for most, if not all, of the USPS budget deficit. The USPS Fairness Act would do just that. It would, “repeal the requirement that the United States Postal Service prepay future retirement benefits.” This repeal is supported by the 200,000-member American Postal Workers Union (APWU).

If Republicans oppose the USPS Fairness Act (and I suspect they will, if they haven't already) it will reveal much about their true motives. Suspected motives include the desire to damage mail-in voting, damage to Amazon, damage to postal worker unions, and at the same time benefiting Republican candidates and USPS competitors. The ultimate goal of Republicans may be the libertarian ideal of the complete elimination of the USPS as we know it. The USPS would be replaced by private companies because, in libertarian land, private companies are always better.

Obviously, I support the USPS Fairness Act, and I support the appointment of a new Postmaster General who will return the Postal Service to goals of faster mail delivery, while keeping the price of postage as low as possible. That's good for the USPS, and it is good for business, particularly small businesses operating on thin margins, which can't afford high package delivery fees.

To that end, I have signed the petition to fire Louis DeJoy being sponsored by: Americans for Tax Fairness Action Fund, Broward for Progress, California Clean Money Action Fund, Coalition On Human Needs, Common Cause, Citizens for Responsibility and Ethics in Washington, Daily Kos, Demand Progress, DemCastUSA, Democrats.com, Hip Hop Caucus, The Juggernaut Project, Other98, Progress America, Progressive Caucus Action Fund, Progressive Reform Network and United We Dream.

Here is a direct link to the petition (https://actionnetwork.org/petitions/sign-the-petition-fire-postmaster-general-louis-dejoy?source=direct_link&) By signing this petition, you will automatically start receiving email from some liberal group email lists, but you can also get off those mailing lists by requesting removal from them at grassroots@commoncause.org or by calling 202.833.1200, by using the unsubscibe feature in the emails.

Click here for links to places to buy or rent movies in digital formats, or to buy the soundtrack, posters, books, even used videos, games, electronics and lots of other stuff (no extra charges apply). I suggest you shop at least two of these places before buying anything. Prices seem to vary continuously. For more information on this film, click on this link to The Internet Movie Database. Type in the name of the movie in the search box and press enter. You will be able to find background information on the film, the actors, and links to much more information.

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Copyright © 2021 Robert Roten. All rights reserved.
Reproduced with the permission of the copyright holder.
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(If you e-mail me with a question about this or any other movie or review, please mention the name of the movie you are asking the question about, otherwise I may have no way of knowing which film you are referring to)

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Robert Roten can be reached via e-mail at dalek three zero one nine at gmail dot com [Mailer button: image of letter and envelope]