President Obama couldn’t have been more right: The post office is struggling, and for good reason.
While defending his government-funded health insurance option a week ago – a controversial idea that, at this writing, he appears to be willing to ditch – he said private insurers shouldn’t worry about competing with the government.
He said it is the U.S. Postal Service, not FedEx and UPS, that is struggling.
To be sure, our quasi-government postal operation is on track to lose $7 billion this year.
Why? In the Internet era, fewer people are mailing things. They’re mailing even less during a deep recession.
But here are the real challenges our post office faces: regulations, mandates and bureaucratic inertia that make it incapable of adjusting to market conditions.
Postmaster General John Potter is trying to correct that. He said Congress needs to allow the post office to "think outside the mailbox" – to consider new activities that could generate new revenue.
The Italian post office allows customers to do their banking. Post offices in other countries allow customers to purchase insurance. The Australian postal system allows customers to renew their driver’s licenses.
Heck, we’re already waiting in long lines. Why not wait for two or three things at once?
Besides, our postal system has 36,000 locations across America – it generates massive foot traffic. Surely, it could generate new dough by offering new services and products that consumers want.
But, since quasi-government organizations move at a snail’s pace, if at all, that may take a while.
If you want an example of someone who really did think outside the mailbox, visit the FedEx Web site.
Fred Smith, the company’s founder, had a vision to do something the post office wasn’t able to do: deliver small packages fast.
In 1971, he invested money he inherited – along with venture capital he was able to raise – to buy a used-aircraft company in Little Rock, Ark.
He began using the aircraft to provide overnight delivery services for envelopes and small packages shipped within the United States.
He ran into all kinds of challenges and obstacles. He and his team obviously were successful at resolving them. They pushed advances in computer technology to drive efficiency. Their creativity and innovation ultimately changed the world.
Needless to say, FedEx has become so innovative and efficient, we take for granted that the package we drop off today will arrive virtually anywhere in America by noon tomorrow.
In fact, so reliable is FedEx, our postal system signed a contract with the company to deliver its own express packages all over America – something the post office could never do on its own.
Which brings us back to Obama’s telling comment comparing public and private organizations.
It is true that our health care system needs some reforming and our government has an important role in nudging the reform along.
But do we really want "reforms" that will lead to a post office-style bureaucracy and the constant meddling of big-talking politicians?
In the era of Google and innovation and massive new efficiencies, do we really want a government-directed system that, by its very nature, will quell innovation and efficiency?
Or do we want reform that will move us more toward the energetic FedEx model?
Most agree that lawmakers must address the big challenges — there are creative ways to deal with portability, pre-existing conditions, the uninsured, etc. — but they must establish new guidelines without taking away more of our freedom.
Unleashing private-sector creativity and innovation is the only way we can drive the improvements our health care system so badly needs.
Is there anyone on the planet who thinks the government can manage one-seventh of the U.S. economy better than the private sector?
If you do, let me ask you this: If you needed to ship a precious personal item halfway across the world, whom would you entrust it to?
The post office or FedEx?
The health care debate isn’t much more complicated than that.