On the last day before summer vacation, our grade school was treated to a movie at the local theater. We watched "Flipper". Curiously, the only thing I remember (beside the fact that The Rifleman, Chuck Connors, was in it) is the main characters huddling in the corner of a building during a hurricane. One said to another: "don't worry: no hurricane would dare blow done a US Post Office!"
That awe and respect for federal government is, for better or worse, a thing of the distant past. For better or worse, the same may be true of the Post Office. From the WaPo:
The U.S. Postal Service is on the verge of defaulting on billions of dollars in payments due to the U.S. Treasury, but Congress isn't any closer to resolving the delivery service's financial woes.
On Wednesday the first of two legally required payments come due, a $5.5 billion obligation to fund future postal retiree health benefits. Another $5.6 billion is due at the end of September. But with mail volume and revenues plummeting — leading to roughly $25 million in losses each day — USPS has warned it will be unable to make the payments and may need to delay other obligations, including a $1.5 billion payment to the Labor Department for workers compensation.
The Postal Service doesn't use taxpayer money to fund operations, but is regulated by Congress, which for years has passed short-term resolutions to prop up its sagging finances.
The Post Office is in an unenviable position. It is not funded by taxes but has to produce its own revenues. However, it is also The United States Post Office, and so has to keep Congress happy. It cannot make the kind of decisions (closing unprofitable centers, cutting delivery to five days a week) that a private corporation might make to keep in business. So here we are.
General Motors is in a rather different but similarly unenviable position. It is a corporation with a dysfunctional and apparently irremediable culture. The natural remedy for that situation is bankruptcy and or extinction, in favor of new corporations that do not have the same defects. That natural outcome was avoided by the Federal bailout. Unfortunately, there are some things that federal money can't fix. From Mickey Kaus:
I've been told that after its Rattnerized bailout GM is "back," a dramatic "success story." The president himself has boasted "General Motors is back on top." Yet now a few weeks later Bloomberg says the company is in a "slump"–it's right there, in the headline: "slump." How can the bailed out, comebacked, turned around success story GM be in a slump when the U.S. auto market as a whole is growing rapidly? It's almost as if an easily spun media wildly underestimated the problems at GM (and the inadequacy of the administration's fixes) in a way that helped President Obama's favored narrative (and pleased a major advertiser at the same time!) …
P.S.: Why is all this executive turmoil happening now? It's very hard for an outsider to know exactly what is going on, but there are three theories. 1) GM CEO Akerson is panicking (Truth About Cars' theory); 2) Akerson is kind of incompetent and hires people he then chases away or has to fire; 3) … I'm thinking of a third. … What's the third? I know there's a third. …
P.P.S.: I'd forgotten that in April, 2010 President Obama told the nation (in his weekly radio address) "It won't be too long before the stock the Treasury is holding in GM could be sold …."
Two years later, the Treasury still owns more than 26% of GM. The stock price of the dramatic administration success story is too low to sell without taking gigantic, embarrassing losses.
The President was right to insist that Government has a role in making the market work. It is equally true that Government frequently makes the market work less efficiently for most of the people involved. Saving GM may have been good for the unions and for the corporate managers (at least temporarily) but it was not necessarily good for the United States or its people.
What is quite evident is that Government is no damn good at all when it comes to managing the markets. I don't think that Mr. Obama knows this. I don't think he is capable of learning it.