Gloom of Night27 February 2008
The problem here is that the Postal Service long-ago passed the point where each increase in price caused a drop in total revenues, as people began switching first to facsimile machines and, more recently, to e.mail. And officials report their expenses as continuing to climb, which shows that they're not paring dis·economies of scale. Basically, officials increase the price per letter in an attempt to off-set the cost per letter which increases as the number of letters decreases because of past price increases. It's a death-spiral.
Post officials have long been told, and surely recognize, where things are headed. They probably feel that there would be little for them but grief in attempting at this point to promote the reforms that could get the the Postal Service off its present path.
My expectation is that we will eventually be told that
privatization failed, that the Postal Service will stop pretending to be a firm, and that its prices and services will be determined by political and bureaucratic notions of necessity and of justice, with overt subsidies off-setting ever-increasing deficits.