Thursday, February 21, 2013

Upside Down?

The Post Office announced recently that they’re eliminating Saturday delivery .  This week it was reported that Google is going to open retail stores.  This all seems somewhat counter-intuitive – that the service whose function is to deliver letters and packages will be a M-F service while the company that epitomizes the internet is moving to bricks and mortar.  Of course that’s a simplistic analysis, but these announcements show the complexity of the current economy.
 
The Post Office is a robust institution that loses billions of dollars per year.   The organization is not a government agency, yet is chartered and overseen by Congress – sort of the worst possible situation by not being on the federal dole yet having to comply with federal rules.  (AmTrack is similarly run.)  The losses are the result of many things:  union intransigence, huge health care and pension burden, bad management, but mostly for having a cost basis that far exceeds the price they charge for the service.  A first-class letter costs double what a stamp costs.  The same is true (but at lesser percentages) for magazine and catalog delivery.    No operation (for-profit, not-for-profit or governmental) can exist on that set-up for long.
Google helped to accelerate the demise of the USPS through the prolific use of email.  As people communicate by email, social media and text – there is less of a need or value to having something on paper delivered to a mailbox.  Online purchasing rose 14% in 2012 to $50 billion.  Google’s reported plan is to sell a variety of products that its operating system Android runs on.  Unlike the Apple or Microsoft shops the Google store won’t be hardware unique. 
I think Google will go the way of Gateway and become a huge albatross if they actually launch this idea.  It makes little sense for them to directly compete with their advertisers which is the foundation of the company's income.  It’s apparently an evolution from the kiosk driven pop-up stores that the search provider has been utilizing over the past 18 months or so.  This may, however, prove to be one of those (many) things that I’m wrong about. 
In the case of such fallibility, the next area that I would most like to see move in an unexpected direction is the U.S. political establishment.  The just completed 112th Congress was in session for 153 out of 352 days.    Many of those “days” were for 10 or 15 minutes for ceremonial reading of proclamations and such.  The 113th Congress that just started last month (52 days ago) has put in 19 days.  They’re currently on a 10 day winter break.
 
Given the havoc that Congress creates, having them in session fewer days might be the better option.  Since the rank and file members earn $174,000 per year - based on last year’s sessions, they’re getting about $1,100 per session, no matter how long or short it is.  If this is frustrating – then send an email from your Gmail accounts via the United States Post Office.

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