Book by CU faculty member details ways to save the U.S. Postal Service

By Susan Lang

The U.S. Postal Service -- America's largest public enterprise -- is in need of reform and should be transformed from a government-owned entity into a privately owned firm, says an expert at Cornell.

In a new book, Saving the Mail: How to Solve the Problems of the U.S. Postal Service (American Enterprise Institute Press), assistant professor of policy analysis and management Rick Geddes argues that the postal service should become a completely demonopolized company that offers publicly traded shares. Germany and Holland have successfully privatized their postal services, he points out.

Geddes

Geddes, who also is a research fellow at the Hoover Institution and an adjunct scholar at the American Enterprise Institute, said, "The only way the U.S. Postal Service will remain viable is by confronting head-on the financial and structural problems facing this huge institution." He noted that the postal service employs 850,000 workers and handles about 40 percent of the world's mail. Although its revenues are $66 billion a year, it lost $1.7 billion in fiscal 2001 and $676 million in fiscal 2002. Last December, President Bush named a nine-member commission to study postal reform.

"The Postal Service's current structure, which was established in 1970, is no longer appropriate. It not only should reflect recent technological advances but also needs to undergo economic restructuring similar to the deregulation of the airlines, telecommunications, oil, natural gas, electricity, trucking, cable television and railroad industries, which are also network industries," Geddes said.

The Postal Reorganization Act of 1970 created a self-supporting postal corporation wholly owned by the U.S. government. By increasing the post office's commercial freedoms, eventually eliminating its monopoly, and by increasing incentives for postal service workers through employee stock ownership, Geddes said the postal service would be subject to market competition and would better serve customers and taxpayers.