JACKSON HOLE, Wyo. -- The commentariat would have you believe that there isn't a business in the country with so much as a drop of pricing power.
Yet there exists at least one. It is the
U.S. Postal Service
And it must be the envy of every private company in America. Four straight years of billion-dollar profits. A workforce that, owing to its penchant for eliminating chunks of the customer base, has spawned a synonym for psychotic. Just one bone -- the privilege of pressing stamps instead of licking them -- for us loyal dogs in umpteen years. Increased competition from email to a host of private carriers. Priority mail that doesn't arrive any earlier (and often later) than the regular kind. Lines 10 deep -- and surly counter help waiting at only two of five open windows at the end of them.
And still able to get away with a 3.1% price hike.
In its press release announcing the increase, the USPS points out that this goes down as the smallest postage increase ever. It notes that Americans have one of the lowest postage rates in the world (only Mexicans and Australians have it better). It says the increase is needed "to fund Postal Service improvements in post offices and facilities, transportation, and equipment; and to ensure mail service continues to improve."
Yet privately, last year, a USPS manager conceded this: "We want to avoid the mistakes made in the 1980s when we waited too long before raising rates."
And what the press release does not say is that the increase will swell USPS coffers to the tune of a billion dollars. Or that, during the past 40 years, stamp prices have risen more than 1 1/2 times faster than the overall inflation rate.
In this New Deflationary World, where inflation is dead and where everything will grow ever cheaper, an outright price increase just doesn't fit. A pre-emptive one stands out even more.
But neither rain, nor sleet, nor snow...