John Potter became U.S. Postmaster General in 2001. His salary has risen 40 percent since 2006 and he received a $135,000 bonus last year. The value of his total compensation and retirement package came to $800,000 in 2008. The deputy postmaster receives $600,026 in total compensation and the chief of human resources receives $482,820.
Itís unfortunate we have so many companies that reward their CEOís with lavish compensation packages and large bonuses, even when those companies are losing money. But in these cases, only shareholders are hurt. When bureaucrats are rewarded for failure, we are all punished. So, after receiving his princely bonuses and salary increases, what can we expect from Mr. Potter?
For starters, the USPS lost $384 million in the first quarter of FY 2009 and revenue dropped $1.3 billion (6.3 percent) from the same quarter in 2008, when it lost $2.8 billion for the whole year. Going forward, thereís no point in trying to predict USPS profitability. The USPS, by law, is not required to make a profit. And, as we all know, if the USPS needs money, it simply jacks up stamp prices. Instead, Iíll try to predict future quality of service and, of course, stamp prices.
Take a look at the chart below showing the stock price performance of General Motors (G.M.) from 2001 to the present. Apart from spanning the same period of time he has been Postmaster General, what does G.M. stock price history have to do with Potterís ability to run the USPS?
The answer is that G.M. is the business model Potter wants the USPS to emulate. How could he pick G.M., unless he is a complete idiot? I can think of worse companies than G.M., but not many. During the time Potter has been Postmaster General, G.M. share price has dropped from over $80 to under $3. Plus, what does manufacturing and selling automobiles have to do with delivering mail? Someone a little smarter (say, an imbecile or a moron) would probably at least pick a shipping company to look at. If he did, he might have found a company such as UPS or FedEx to be a better choice. For example, UPS has only dropped from about $60 to $41 in share price over the same period.
I donít think itís the business model Potter is trying to emulate. Itís the executive salary model Ė the one in which G.M. CEO Rick Wagoner got a 64% salary increase in 2007 as his company swirled around the bowl, losing $39 billion. So get ready for a bigger USPS and bigger delivery delays. And weíll pay a bigger cost (i.e., stamp prices + tax money) for the privilege.
If you want real change, we need to get rid of the Potters of the Public Sector. He is a glowing example of government arrogance and incompetence. Unfortunately, we are now in the process of adding an unprecedented number of Potters to the government payroll. Thatís not change you can believe in, unless you are an idiot like Potter, and a gullible one at that.