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For Deutsche Post, privatizing was a smart move
An employee prepares a customer's package for postage at a small franchise of German postal carrier Deutsche Post on March 9, 2010 in Berlin, Germany.
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Jeremy Hobson: A group of U.S. Senators has unveiled a plan to rescue the U.S. Postal Service. It would allow the USPS to tap the surplus from its retirement fund to help shore up its budget. That's one option; others want the post office to go private... completely.
As Caitlan Carroll reports from Berlin, the Germans have already gone that route.
Caitlan Carroll: Germany, 1989. Change was in the air. The Berlin Wall was falling. The Cold War was ending. And the German postal service was privatizing.
Harald Gleissner: The point was to get it out of the state budget. That was the major point. And the second thing was to get competition.
Harald Gleissner teaches logistics and transportation at the Berlin School for Economics and Law. In the late '80s, Germany's postal service was dependable but slow and losing money. So in 1995, the German government made Deutsche Post a private business, giving it more control over its operations.
Gleissner: It was a long process.
Gleissner saw that long process firsthand because his father ran a post office. Many post offices were consolidated. Retiring workers weren't replaced, and mail routes were centralized.
As a private business, Deutsche Post could make these changes without federal approval. But the German government did create one stipulation.
Gleissner: There is a law to make sure that letters are distributed in any corner of the country.
Even with that logistical challenge, Deutsche Post is often touted as a privatization success story. It remained dependable but also diversified. Deutsche Post now runs DHL, the express mail company. And it's responded well to the Internet shopping boom. So the business is healthier, but are the customers any happier?
At a flower shop near a post office in Berlin, opinions are mixed. Antje Schmidt says mail seems more expensive now and the lines are longer.
Harald Gleissner says a national postal service doesn't need to be perfect, but it does need to be agile. He says in America, every major decision about mail delivery gets sent to Congress. And for the U.S. Postal Service, those stamps of approval may arrive too late to be effective.
In Berlin, I'm Caitlan Carroll for Marketplace.
More myth-making from your friendly financial/public relations sponsors: From the Chicago School of Economics to the lobbyists on K Street to mainstream media outlets and on to the halls of Congress. This is right on cue, though: the classic MO for quasi-banana republics and budding right-wing dictatorships. Never mind that we should be talking about the nationalization of oil, as speculation in gas has pushed prices up to $4 a gallon, or at least banking, as prescribed by law after its private market failure. Oh, no. Instead, privatization of the post office is in the offing. Privatization is great for all those who wish to gut unions, transfer revenue streams from government to private industry, increase costs to both taxpayers and consumers, and enrich corporations and financiers in the bargain. The examples of its failure and widespread abuse are numerous: In Bolivia, where water privatization cost citizens a full quarter of their annual income; Chile, under Pinochet, in several industries decimated by market imbalances and inequities; in California—short memories, here, I guess—anyone happen to remember how deregulation of utilities promised to increase competition and lower prices? What we got instead was market manipulation from Texas and the collapse of Enron; in the UK, with the hugely unpopular and subsequent failure of a partially privatized underground (The Tube). The list goes on and on. For more on London, please read: http://www.thetransportpolitic.com/2010/05/11/london-undergrounds-privat...
