End mail delivery?

The U.S. Postal Service is having financial problems again and is proposing higher postage feeds and cutting out Saturday deliveries.  What, though, do you get in your mail these days?  In an age of e-mails and electronic banking, do we even need snail mail anymore?  Yes, we need delivery of packages for what we order online–something done profitably by Fed-Ex and UPS–so why not make that the business of the USPS, with those who still send paper correspondence paying for them as little packages?  Or why not let the government-subsidized post offices go out of business and let the private companies do it all?  Here is a proposal and rationale:

The Postal Service projects deficits of $238 billion — roughly the current gross domestic product of Portugal — through 2020. Raising rates slightly and reducing delivery would make tiny dents — and that’s the best possible outcome; in the worst, the changes would accelerate the service’s problems. Meanwhile, the debate obscures the fact that digital communications are fast eliminating the need for mail delivery.

To understand what could happen to the Postal Service, look at Kodak, whose 130-year history includes the kind of dominance that USPS long enjoyed. Even as the long-term threat from digital photography became clear in the 1990s, Kodak temporized. It tinkered with its traditional film, paper and chemicals businesses, never acknowledging that digital would all but eliminate them. Kodak continually predicted growth, even as it fell from being one of the most profitable companies in the world to one that’s essentially worthless.

The Postal Service, too, is looking at the future as a variant of the present. USPS, convinced of the long-term need for physical mail delivery, has been relying on increases in volume, according to a Government Accountability Office report published in April. Yet delivery volume for first-class mail fell 22 percent from 1998 through 2007, tumbled an additional 13 percent last year and was down 3 percent in the first half of this year despite heavy mailings from the Census Bureau.

Step one in avoiding Kodak’s fate is for the Postal Service to acknowledge that its future will have almost no connection to the present. Anything that can be conceived of as information will, in time, be sent electronically. The Internet is faster, cheaper and more convenient for the sender and the receiver.

E-mail has already supplanted letters, but that’s just the start. More people will send money via PayPal or other electronic services rather than mail checks. As is increasingly the case, people will download their movies and books, check their bills online, receive information about their investments electronically, and so on.

USPS’s future lies in things that need to be delivered physically: shoes, computers and other objects. On those items, the Internet can’t compete, and USPS has assets that could let it take on UPS and FedEx (which, unencumbered by USPS’s declining business, are in splendid shape; UPS reported Thursday that its second-quarter profit had nearly doubled, to $845 million, from a year earlier).

via Paul B. Carroll and Chunka Mui – How the U.S. Postal Service can save itself.

Land of the Freon

Although I had a good time in France and Germany and came to appreciate their people, their culture, and their history, I have to say that the experience also helped me to appreciate even more what America stands for and what makes America great. And what America stands for and what makes America great, among other things, is air-conditioning!

They just don’t have air-conditioning much in Europe. The stores don’t. The restaurants don’t (which explains the sidewalk cafes). The houses and apartments don’t. At one point, I splurged on a rather nice hotel in Germany, and it didn’t have air-conditioning either. Maybe the Europeans are hardier than us Yanks, or at least closer to nature. But it sure got hot.

An enterprising salesman who could sell refrigerators to the Eskimos could surely sell air-conditioning units to the Europeans and make a fortune. In fact, air-conditioning Europe could solve our balance of trade problem, as well as helping with unemployment and getting the U.S. economy going again.

Also, screens. You open the window and you experience the outside directly. I heard an Eric Hoffer interview in which he said that nature is harsher in the New World than in the Old. They don’t seem to have so many mosquitos and other things you would want to screen out.

Then again, Europeans have things that Americans don’t. Two-hour lunch breaks, in France; castles; gothic cathedrals.

Medicare doctors

Not every doctor accepts medicare patients.  Many doctors only accept a few.  The same is true of medicaid patients.  This is because government payments are less than the going rate for their services.  This could become a problem.

The number of doctors refusing new Medicare patients because of low government payment rates is setting a new high, just six months before millions of Baby Boomers begin enrolling in the government health care program.

Recent surveys by national and state medical societies have found more doctors limiting Medicare patients, partly because Congress has failed to stop an automatic 21% cut in payments that doctors already regard as too low. The cut went into effect Friday, even as the Senate approved a six-month reprieve. The House has approved a different bill.

• The American Academy of Family Physicians says 13% of respondents didn’t participate in Medicare last year, up from 8% in 2008 and 6% in 2004.

• The American Osteopathic Association says 15% of its members don’t participate in Medicare and 19% don’t accept new Medicare patients. If the cut is not reversed, it says, the numbers will double.

• The American Medical Association says 17% of more than 9,000 doctors surveyed restrict the number of Medicare patients in their practice. Among primary care physicians, the rate is 31%.

The federal health insurance program for seniors paid doctors on average 78% of what private insurers paid in 2008.

“Physicians are saying, ‘I can’t afford to keep losing money,’ ” says Lori Heim, president of the family doctors’ group.

via Doctors limit new Medicare patients – USATODAY.com.

We’ve got to cut medical expenses, we keep saying.  That means doctors will get less money.  But what if doctors won’t work for what we want to pay?  Shouldn’t doctors, like other economic players, be able to set the fees the market will allow?  Or should they be forced to serve anyone who comes into their offices?

The billionaire challenge

Fortune Magazine has an exclusive story about a project among the nation’s billionaires.  Here is an excerpt:

Just over a year ago, in May 2009, word leaked to the press that the two richest men in America, Bill Gates and Warren Buffett, had organized and presided over a confidential dinner meeting of billionaires in New York City. David Rockefeller was said to have been a host, Mayor Michael Bloomberg and Oprah Winfrey to have been among those attending, and philanthropy to have been the main subject.

Pushed by the press to explain, Buffett and Gates declined. But that certainly didn’t dim the media’s interest in reaching for descriptions of the meeting: The Chronicle of Philanthropy called it “unprecedented”; both ABC News and the Houston Chronicle went for “clandestine”; a New York magazine parody gleefully imagined George Soros to have been starstruck in the presence of Oprah. One radio broadcaster painted a dark picture: “Ladies and gentlemen, there’s mischief afoot and it does not bode well for the rest of us.” No, no, rebutted the former CEO of the Bill & Melinda Gates Foundation, Patty Stonesifer, who had been at the meeting and had reluctantly emerged to combat the rumors. The event, she told the Seattle Times, was simply a group of friends and colleagues “discussing ideas” about philanthropy.

And so it was. But that discussion — to be fully described for the first time in this article — has the potential to dramatically change the philanthropic behavior of Americans, inducing them to step up the amounts they give. With that dinner meeting, Gates and Buffett started what can be called the biggest fundraising drive in history. They’d welcome donors of any kind. But their direct target is billionaires, whom the two men wish to see greatly raise the amounts they give to charities, of any and all kinds. That wish was not mathematically framed at the time of the New York meeting. But as two other U.S. dinners were held (though not leaked), Buffett and Gates and his wife, Melinda, set the goal: They are driving to get the super-rich, starting with the Forbes list of the 400 wealthiest Americans, to pledge — literally pledge — at least 50% of their net worth to charity during their lifetimes or at death.

Without a doubt, that plan could create a colossal jump in the dollars going to philanthropy, though of what size is a puzzle we’ll get to. To begin with, a word about this article you are reading. It is the first public disclosure of what Buffett and Melinda and Bill Gates are trying to do. Over the past couple of months Fortune has interviewed the three principals as the project has unfolded, as well as a group of billionaires who have signed up to add their names to the Gates/Buffett campaign.

via The $600 billion challenge – FORTUNE Features – Fortune on CNNMoney.com.

HT:  tODD

What could your church do with a billion dollars?

Pretend that one of the megabillionaires mentioned above lived in your community.  To fulfill the pledge, he gave every church in your community a billion dollars.   What could your church do with that much money?   If all the churches in your community had that kind of money, what do you think would happen?

I intend this not as a fantasy but as a thought experiment.  Would it be an unmitigated blessing, or could it do harm to your congregation?  (If the church could thrive on an endowment and members didn’t have to contribute anymore, what would that do?)  If all the churches decided to get together to end poverty in your town, how might that be done?  (Give each poor person a million dollars so he wouldn’t be poor anymore?)

China needs brands

OK, maybe China won’t bury us economically after all:

Quick: Think of a Chinese brand name.

Japan has Sony. Mexico has Corona. Germany has BMW. South Korea? Samsung.

And China has . . . ?

If you’re stumped, you’re not alone. And for China, that is an enormous problem.

Last year, China overtook Germany to become the world’s largest exporter, and this year it could surpass Japan as the world’s No. 2 economy. But as China gains international heft, its lack of global brands threatens its dream of becoming a superpower.

No big marquee brands means China is stuck doing the global grunt work in factory cities while designers and engineers overseas reap the profits. Much of Apple’s iPhone, for example, is made in China. But if a high-end version costs $750, China is lucky to hold on to $25. For a pair of Nikes, it’s four pennies on the dollar.

“We’ve lost a bucketload of money to foreigners because they have brands and we don’t,” complained Fan Chunyong, the secretary general of the China Industrial Overseas Development and Planning Association. “Our clothes are Italian, French, German, so the profits are all leaving China. . . . We need to create brands, and fast.”

The problem is exacerbated by China’s lack of successful innovation and its reliance on stitching and welding together products that are imagined, invented and designed by others. A failure to innovate means China is trapped paying enormous amounts in patent royalties and licensing fees to foreigners who are.

China’s government has responded in typically lavish fashion, launching a multibillion-dollar effort to create brands, encourage innovation and protect its market from foreign domination.

Through tax breaks and subsidies, China has embraced what it calls “a going-out strategy,” backing firms seeking to buy foreign businesses, snap up natural resources or expand their footprint overseas.

Domestically, it has launched the “indigenous innovation” program to encourage its companies to manufacture high-tech goods by forcing foreign firms to hand over their trade secrets and patents if they want to sell their products there.

via Beijing tries to push beyond ‘Made in China’ status to find name-brand innovation.

Just because a country takes advantage of the market doesn’t mean it has a free-enterprise economic system.   China’s government-controlled socialist economy may be good at mass industry and mobilizing labor, but innovation and consumer-capitalist tricks such as “branding” are hard to come up with under a top-down, command economy.  (So why, one might ask, are WE moving in that direction?)


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