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USPS Sends Out an S.O.S

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    Geddes, Cornell University associate professor, on how to save the U.S. Postal Service.

  • Duration 4:31
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This transcript is automatically generated

A muscle and time is running out.

My next guest says the government should just get out of the way look the post office govern itself -- Gaddis is an associate professor.

At Cornell university and a visiting scholar at the American Enterprise Institute.

Thanks so much for joining us you know I saw -- staggering statistic.

That said that in that volume of mail has dropped its largest amount since the Great Depression we -- 25% of the volume.

Between 2005.

And now but unlike the Great Depression that volume is -- likely to come back this is a permanent change right.

Well molested really looks like it is a permanent change I think you hit the the nail on the head with a signal fact about.

The US Postal Service today is that.

-- sect profit center which is first class mail which is what I think you're referring to yeah has dropped about 25% is between 2005 in 2011.

And we don't have the final numbers for the postal service's 2012 fiscal year -- were expecting.

That large drop to to continue.

And to go on another.

Important thing that happened about that same time around 2005.

Is that the volume of mail which attract.

The growth of the US economy and GDP between roughly two -- 1970.

And that time.

Stopped so the the change in mail volumes.

Started to decline mall the the economy was sort of doing its own things I think yeah if the US economy makes a big comeback.

Folks aren't really expecting the volume of.

-- know -- everybody's sending everything right email I mean you get I get all my bills and statements electronically now and don't waste that paper -- -- revenue at the post office go down 1% in the third quarter while expenses have gone up better than 10%.

-- that doesn't mean that it's a business without value they do a lot of different things that can generate revenue they just came out of those baseball stamps a baseball greats.

Those blew out.

Priority mail and express mail are things that generate revenue it seems like if this were a private business it would either go out of business at this point when it's defaulting on its debt it's about run out of cash or.

Private actually be would buy it out.

And get rid of some of the legacy costs get -- of some of the services that aren't making any money and focus on the things that make money right I mean are there it is there are worth while business and -- -- opinion.

So not behavior you clearly have -- a solid grip on this Melissa that's exactly right most of the folks that I talked to.

Who follow these sorts of things think there's still a lot of value in the mail it's just that the nature.

Of the -- is changing and that the public policies.

Towards the Postal Service have to change with it.

And that it basically has two.

Evolve in a way that would give the management of the Postal Service more flexibility.

Over there business decisions the same sorts of decisions that FedEx and United Parcel Service.

Makes on a regular basis.

And that it is possible for the Postal Service to adapt.

To what I think we all know is a massively changed.

Communications marketplace with obviously instant messaging and texting and emails.

Phone calls being less expensive all these things -- really changing the nature of communications but we've also seen parcel post.

Improvement the Postal Service -- as far as.

-- -- -- -- It was a waste let them do what they need to deal in order to right size this business -- the postmaster general has been on this show and he he knows what needs to be done I mean you know is that a lot of post offices have to be shut down they've really got to cut costs.

Why won't the government get out of the way.

I'll tell you Melissa I really have enormous respect for those folks and a senior source of the post service between a rock and a hard place and congress really will not.

Give them the flexibility that they need I think they're doing a terrific job in a very difficult.

Situation.

But it's exactly like you say is that it's a political situation.

Whenever the Postal Service talks about closing large sorting centers which employ a lot of people.

Congress has no no you can't close that sorting center that's in my congressional district.

So I think we really need to have some change in policy we're hopeful that after the election in the fall.

Maybe once -- new congress forms that we will get some serious postal reform but if we don't see that Melissa.

I'm afraid we're going to be seeing some some major tax Payer bailout.

-- I mean we bring this up again because thereabouts and evolve and another payment and they're gonna run out of cash in October we talked about this before but nothing is getting fixed and the problem is getting worse -- -- us thanks for coming on.

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