A chronicle of the Obama Administration, and related matters.

Monday, February 2, 2009

I've taken a few days off from this blog, which I know bloggers are not supposed to do. Tough. As I have already said, I don't really like the whole blogging subculture, so I have no intention of being obedient toward it beyond necessity. I was just tired. But now I am not tired, and I have plenty to blither about. I'll limit myself, however, to three semi-random comments.

First, I noticed that one of the answers in Sunday's New York Times crossword puzzle is "Powell", the clue referencing his autobiography. Did I send my old boss an email advising him that now he'd really hit the bigtime? He has a finely honed sense of humor, but I thought better of it. I'll save it. Another, less royal friend once provided the quote for the Times' quote acrostic puzzle, from his book Modern Dictators. This was some several years ago. I told him about it; he, no puzzle doer himself, never otherwise would have found out. He was delighted and appreciative. So one never knows about such things. 

Second, I saw that President Obama, in the early flurry of things he can do by Executive Order alone, reversed several Bush Administration edicts having to do with labor relations. Hurray! This, to remind myself and others, is why I once was a Democrat and never was a Republican. It is unfair to caricature Republicans as the party of big business, who have no interest or compassion for the "little guy", while Democrats are the party of  real, working Americans and are against corporate concentrations of power. In fact there are compassionate conservatives; this is not just some sort of deflectionary slogan. And in fact, if you look at the record, Democrats have been in bed as much or more with the Wall Street muggers than have Republicans. Many if not most of the deeply unfortunate decisions made about the deregulation of financial markets in recent years were made during the Clinton watch, not the Bush watch.

All that said, yeah, it's true: Rank-and-file Republicans are unsympathetic to labor unions, while at least most Democrats are sympathetic. Even my colleague and friend Frank Fukuyama, a Republican who nonetheless pronounced himself pro-Obama, opined recently that we should not overreact to the present economic crisis, and one example of overreacting he gave was that we should not want to return to the union-dominated labor markets of the 1950s and 1960s. 

Well, there isn't much chance of that, but why would that be such a bad thing? There isn't much chance of it because we don't have the kind of industries anymore in plentitude sufficient to support such a shift. Our manufacturing sector in this country is a pathetic shell of its once thunderous self. This is bad, for reasons I'll get to later. And the recent growth of the percentage of the workforce in unions is mainly a result of the growth of public sector unions, teachers unions and, worse, things like AFSCME.  These are to real industrial labor unions what a mere Brussel sprout is to a full-grown cabbage. 

Now, it's true that Labor unions -- AFL-CIO and International Brotherhood of Teamsters -- did abuse their power and their rank-and-file in some respects some decades back. It's also true that high labor costs put many American manufacturers at a competitive disadvantage in a world of liberalizing trade. But what's wrong with the kind of collective bargaining that insures that skilled workers get paid a living wage? Do Republicans think that only unions skew the market, that without unions there would be a completely fair labor market -- that large concentrations of corporate power are not capable of unfair practices, of tipping the playing field in their direction by, not least, suborning Congress and shaping, say, tax laws, in their own favor? Wake up, wake up, little GOP-children.

We have a law about all this stuff, of course: The National Labor Relations Act. It's a good law, too. But like all complex laws that beg regulators and interpretations, there are ways to bend it this way and ways to bend it that way. The Bush Administration bent it in ways that hurt labor; all these little subversions at the margins, which I will not stop to describe here, have been undone with the President's pen.  Good for him.  

Now third: What really got me toward the end of last week was John E. Potter, the postmaster general, who went on Wednesday before a Senate committee and broached the idea of ending Tuesday mail delivery to bail out the ailing USPS -- that's United States Postal System, for those not in the postal "know."

Mr. Potter noted before the Congress that new technology has depressed first-class mail volume, which is true; there is no doubt that the post office faces a long-term structural problem. But that isn’t its only problem, which is proved by the fact that USPS inefficiency long predated the technology/structure issue. After all, increases in first-class rates have significantly and consistently outpaced the rate of inflation for more than 40 years.

As I understand it, the real sources are threefold and internally related:

(1) An obscenely complex rate structure that gets worse every year. Gratuitous complexity is very expensive. It takes tens of thousands of over-paid middle managers working in acres of needless office space to manage this completely pointless baroque rate structure.

(2) The postal union, which strikes me most days as institutionalized featherbedding that does not really benefit the heroes of the postal service, the clerks and especially the carriers, but all those overpaid middle managers mentioned in point 1.

I suspect that the complexity of the rate structure derives in part from an infatuation with technology that violates Occam’s Razor in spades, and which, combined with the union problem, explains why the USPS is the only large organization I can think of that adds labor-saving technology without ever saving any labor costs! 

(3) Congress’ success over the years in turning the USPS into a business subsidy. All that advertising crap in our mailboxes six days a week is tax deductible for business. You didn't know that, did you? The USPS claim that it makes money off 3rd-class mail would turn out to be inaccurate, I suspect, if one counted all system costs over time, including the middle-manager, rate-complexity-induced bloat I’ve already noted, since most of the rate complexity is business/advertising related.

If it were up to me (obviously, it isn’t) I would simplify the rate structure dramatically, getting rid of as many of the transactional costs it takes to apply it as possible. We need first class, parcel post, media mail and a special rate for advertising, but within those simple categories there should be no subdivisions for zip-plus four or machinable packages or bulk-mail. The rates should be set in a way to raise the necessary revenue while simplifying the whole affair, it being understood that simplification in the end will trump all the glass-bead-game like "incentives" cooked up to try to get USPS patrons to accommodate its absurdly complex machinery. 

I would also get rid of ounce-by-ounce distinctions under a pound within the rate structures, since it has been many, many decades since the fine weight of a package was the main factor in determining how much it costs to deliver (how many hands and machines have to move it now matters a whole lot more): 1 ounce and under; 2-6 oz.; 7-12 oz.; and 12-16 oz should do it. 

I would also significantly increase costs to advertisers and significantly decrease costs for both individual/individual and business/individual exchanges. We should be making it easier to buy and exchange goods and services via the USPS—that’s good for the economy—and using advertising revenue to subsidize that: not the other way around! I think most manufacturers would love a deal that decreases their shipping costs more than it raises their advertising budget. That would be good for everyone, except of course the special interests that make their livings dumping printed garbage into our homes and offices. Well, screw `em; let them learn to do something useful for a change.

Seems to me there is still a role for the postal service as an inherently governmental function that, in my view, should allow competition but not be completely privatized. It may have a smaller role on account of technology, but it still has a role. For Mr. Potter to propose eliminating Tuesday service, without even hinting at what’s really wrong, is a depressing sight to see (or to read about the next day).

I realize that efforts have been afoot for a long while now to deal with the real problems. I know that the Postal Regulatory Commission was created in 1996, and I know about Vision 2013 from this past October, a study designed to look out to the future and get ahead of the USPS' problems. But I frankly don’t think that these efforts so far have been bold enough to save the system from its problems—the structural ones combined with the self-inflicted ones.

Well, by now you're saying "Who cares? Who gives a shit or a giggle about the post office?" (Well, maybe you didn't say it quite that way, fair enough.) Yes, fair enough, but it's interesting all the same at least as a minor example of a major problem: Bureaucratic aging, the encrustation of layers of memo-and-meeting nonsense in governmental functions that prove the old adage of committee life that "where there's a will, there's a won't." Good heavens, folks: If we can't even tell ourselves the truth about something as insignificant as the post office, let alone figure out how to fix it, how on earth are we going to fix Social Security and Medicaid, the Homeland Security Department, the intelligence community, Defense Department acquisition and personnel policy, our bizarre food safety system, our health care mess, our failing schools (I could go on)?

I won't however.  Next time something, maybe, about Davos, about free trade, about whether this economic crisis is really all that bad...... is economic growth really the "master" social good?  Rather than assume that, as most do, perhaps we ought to think about it for a change.


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