It’s Not Just Trump: The Neoliberal Roots of the Postal Service Crisis

We should defend the Post Office, both from Trump and the ideology of austerity that treats the agency “like a business.”

Max B. Sawicky August 20, 2020

Photo by Alex Wroblewski/Getty Images

We’re cur­rent­ly get­ting a vivid, painful reminder of why we need a pub­lic sec­tor. The col­lapse of pub­lic ser­vices, in par­tic­u­lar the pro­vi­sion of pub­lic health, has tor­pe­doed the entire econ­o­my as a dead­ly pan­dem­ic rav­ages the coun­try. The end of the road in our cur­rent devo­lu­tion may be the assault on one of our old­est pub­lic insti­tu­tions — the ven­er­a­ble and very pop­u­lar U.S. Postal Service. 

The inter­net has come to take on much of how we com­mu­ni­cate in the 21st Cen­tu­ry, but the fact remains that Amer­i­cans still rely heav­i­ly on the deliv­ery of phys­i­cal cor­re­spon­dence. And it’s not just assis­tance checks and life-sav­ing med­ica­tion, all kinds of com­merce in pri­vate goods is facil­i­tat­ed to a sig­nif­i­cant extent by the Postal Service’s pack­age deliv­ery. Trans­port of peri­od­i­cals, the busi­ness of non-prof­it orga­ni­za­tions, and now the very fea­si­bil­i­ty of our nation­al elec­tions, also all depend on a well-func­tion­ing Postal Service.

There has been a cas­cade of well-found­ed furor over Pres­i­dent Trump’s bla­tant sab­o­tage of the mail in order to ben­e­fit him polit­i­cal­ly. But focus­ing only on Trump’s cur­rent attacks obscures the bipar­ti­san, neolib­er­al roots of the cur­rent crisis.

Fol­low­ing the U.S. postal strike of 1970, Con­gress—includ­ing Repub­li­cans and Democ­rats — passed the Postal Reor­ga­ni­za­tion Act, which sep­a­rat­ed the agency from the fed­er­al gov­ern­ment as an inde­pen­dent, qua­si-pub­lic cor­po­ra­tion. One upside of the change was that postal work­ers won col­lec­tive bar­gain­ing rights, and the ser­vice was large­ly able to func­tion and escape con­tro­ver­sy for decades after­wards. Yet it also ensured that the Postal Ser­vice would be run like a business.”

The 1990s were a peri­od of retrench­ment in the pub­lic sec­tor. Demo­c­ra­t­ic Pres­i­dent Bill Clin­ton declared, The era of Big Gov­ern­ment is over.” Vice Pres­i­dent Al Gore cru­sad­ed to rein­vent gov­ern­ment.” The admin­is­tra­tion boast­ed of its efforts to reduce the num­ber of fed­er­al employ­ees, and pri­va­ti­za­tion and shrink­ing of cer­tain pub­lic ser­vices became the cause-cele­bre. The Demo­c­ra­t­ic Lead­er­ship Coun­cil, also known as New Democ­rats,’ put much of their faith in mar­kets rather than government. 

It could not have been sur­pris­ing that the neolib­er­al gun­sights lat­er became trained on the U.S. Postal Ser­vice. Clin­ton admin­is­tra­tion alum­na Elaine Kamar­ck, a leader in Al Gore’s rein­vent­ing gov­ern­ment project, sub­se­quent­ly called for pri­va­ti­za­tion of the Postal Ser­vice.

In 2012, Pres­i­dent Barack Obama’s for­mer head of the Office of Man­age­ment and Bud­get, Peter Orszag, also advo­cat­ed pri­va­ti­za­tion of the Postal Ser­vice. Among the Oba­ma administration’s laps­es was the fail­ure to appoint its own major­i­ty to the Postal Ser­vice Board of Gov­er­nors (BoG). Unfor­tu­nate­ly, Obama’s fail­ure to exer­cise his appoint­ment pow­er was a pat­tern that affect­ed mul­ti­ple gov­ern­ment insti­tu­tions. Postal Ser­vice employ­ment itself was reduced by almost 20 per­cent dur­ing Obama’s time in office.

Oba­ma end­ed up nom­i­nat­ing Bush admin­is­tra­tion holdovers to the BoG that were reject­ed by a coali­tion of pro­gres­sive orga­ni­za­tions, includ­ing La Raza, the Lead­er­ship Con­fer­ence on Civ­il Rights, the NAACP, the Nation­al Urban League, the AFL-CIO, and postal work­ers’ unions.

Recent­ly, the objec­tion at the time of Sen. Bernie Sanders to these Oba­ma nom­i­na­tions, on the grounds that they threat­ened the future of the agency, was said by both MSNBC com­men­ta­tor Jason John­son
and Dai­ly Kos blog­ger Markos Moulit­sas to have helped cause the cur­rent dys­func­tion at the Postal Ser­vice. It should not be sur­pris­ing that, despite such spe­cious rewrit­ing of his­to­ry, Sanders actu­al­ly had the strong sup­port of postal work­ers them­selves.

From its defen­sive crouch, the Postal Ser­vice now attempts to shore up its polit­i­cal sup­port by pledg­ing that it does not require tax dol­lars” to func­tion. Its lead­er­ship is now say­ing that once the cur­rent hit to its finances due to the coro­n­avirus is reme­di­at­ed, the agency will be able oper­ate as a stand-alone enter­prise.

From an eco­nom­ic stand­point, there is no rea­son a postal ser­vice must run a prof­it. As many com­men­ta­tors have point­ed out, this con­straint is applied selec­tive­ly, out of ide­o­log­i­cal prej­u­dices. Nobody requires the Depart­ment of Defense to turn a prof­it. (For this we should prob­a­bly be grateful.)

The tra­di­tion­al ratio­nale for sub­si­diz­ing a postal ser­vice goes by the prin­ci­ple of uni­ver­sal ser­vice.” The bonds of a nation are strength­ened by the abil­i­ty to com­mu­ni­cate on paper, at nom­i­nal cost, with any res­i­den­tial address in the coun­try. In eco­nom­ics, the tech­ni­cal buzz­word for this is net­work exter­nal­i­ties.” All mem­bers of a net­work ben­e­fit from direct links to oth­er mem­bers, even if they are sel­dom or even nev­er tak­en advan­tage of.

The uni­ver­sal ser­vice com­mit­ment makes pos­si­ble the pro­vi­sion of reg­u­lar mail deliv­ery to rel­a­tive­ly iso­lat­ed rur­al loca­tions. If the Postal Ser­vice were an unreg­u­lat­ed, prof­it-mak­ing con­cern, mail deliv­ery would cost a pre­mi­um for cus­tomers in such areas. That is why, when push comes to shove, you can find con­ser­v­a­tive mem­bers of Con­gress from rur­al dis­tricts stick­ing up for their rel­a­tive­ly cost­ly local post offices and mail routes. 

The prob­lem with a pledge to reject tax dol­lars” became evi­dent with the Postal Account­abil­i­ty and Enhance­ment Act of 2006, passed in a lame-duck Con­gress by unan­i­mous con­sent, by Repub­li­cans and Democ­rats alike. One of the orig­i­nal spon­sors was Rep. Hen­ry Wax­man (D‑Calif.), a long-time lib­er­al stal­wart in the House of Representatives. 

Among oth­er changes, the act required the Postal Ser­vice to put aside mon­ey for the health ben­e­fits of future retirees, lead­ing inex­orably to bud­get pres­sure on cur­rent oper­at­ing expen­di­tures and jus­ti­fi­ca­tions for ser­vice cuts: few­er postal work­ers, less over­time, decom­mis­sion­ing mail-sort­ing machines, and short­er win­dow hours at the nation’s post offices add up to less time­ly and reli­able ser­vice.


Now, in the heat of a nation­al elec­tion with a great­ly expand­ed use of mail-in vot­ing, prob­lems should be expect­ed. The spu­ri­ous notion of a stand-alone agency also means that any infu­sion of funds from gen­er­al tax rev­enue, oth­er­wise jus­ti­fi­able in eco­nom­ic terms, can be stig­ma­tized as a bail-out.”

The point here is that the spu­ri­ous notion that the U.S. Postal Ser­vice should be finan­cial­ly self-suf­fi­cient — which goes back decades — helped give rise to the abil­i­ty of Trump’s crony in charge of the Post Office, the con­flict-of-inter­est-rid­den Louis DeJoy, to cut ser­vices in the name of account­ing sol­ven­cy. For his part, Trump has acknowl­edged open­ly that his refusal to pro­vide nec­es­sary sup­ple­men­tary funds to ensure effec­tive deliv­ery of the mail is found­ed on his deter­mi­na­tion to frus­trate the vote-by-mail system.

In the wake of the uproar over mail sab­o­tage, pub­lic pres­sure has appar­ent­ly forced DeJoy to defer some ser­vice cuts until after the elec­tion. To make sure this pledge is hon­ored, we will have to keep a clear eye on the actu­al progress, on the ground, in prepar­ing for the elec­tion. For­tu­nate­ly, union­ized postal work­ers will be essen­tial allies in mon­i­tor­ing the integri­ty of Postal Ser­vice man­age­ment. Pend­ing the suc­cess­ful removal of the cur­rent admin­is­tra­tion, a forth­right reju­ve­na­tion of the U.S. Postal Ser­vice can com­mence, in which we final­ly cast off the unfound­ed account­ing imper­a­tives that crip­ple its operations.

Max B. Saw­icky is an econ­o­mist and writer based in Vir­ginia. He pre­vi­ous­ly worked for 18 years at the Eco­nom­ic Pol­i­cy Insti­tute in Wash­ing­ton, D.C.
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