THE BLOG
05/05/2010 05:12 am ET Updated May 25, 2011

Like the Post Office? You'll Love Health Care.

If you're looking for one of the few remaining remnants of Soviet-era bureaucracy, don't set your gaze on Castro's Cuba or North Korea. The Post Office will do.

There may be other institutions in America that are perceived as being as incompetently run, as arrogant, as unaccountable, and as lacking in any fundamental strategic logic. But they certainly aren't as visible.

In a telling instance of bureaucratic synchronicity, the Post Office has just proposed a "ten year recovery plan" this week that includes a projected $40 billion lift to the bottom line that would come from just from eliminating Saturday delivery.

I call it "ironic" because it comes smack in the middle of the health care debate, a struggle in which the phrase "government bureaucrats standing between you and your doctor" is repeated about as often as "Next on line" is grunted by a bored and distracted post-office worker.

The Post Office is a daily reminder for millions of Americans of what happens when you create an organization void of incentive or motivation - an organization that is also incapable of even the most modest degree of marketplace awareness. That's why the carefully crafted Republican arguments about government clumsiness penetrate so deeply into our neural networks and stick like glue. Psychologists call it the availability heuristic. That means we make judgments about the things we don't know much about - or the things we fear - based on how easily a comparable example can be brought to mind.

So the President talks about a new regulatory agency and our brains fire up an image of the Post Office or the Motor Vehicle Bureau or the Passport Office.

This isn't an entirely unfair comparative framework. The reasons the Post Office is in its current mess has a lot to do with the way government operates in general. Government agencies tend to be very bad at forward-planning, at scoping out the trends and drawing conclusions from them, at -in the words of the 9/11 Commission - connecting the dots.

It was the Post Office's failure to first pay attention to the over-night business, which was innovated by Fedex - largely because the government wasn't meeting the needs of business - and then to overlook a little wrinkle called email, that conspired push them to the rim of bankruptcy.

It's been a slow and trackable decline that could have been addressed years ago. The use of the postal system hit its high in 2006, when 213 billion items were dropped in the mail. Last year, the number shrank to 177 billion, and it's projected to drop to 150 billion buy 2020. (That seems wildly optimistic to me.} Those metrics will result in a loss of $238 billion over the next decade. Those are subprime crisis numbers.

Of course, there are systemic reasons behind the government's inability to strategize and anticipate. Even the military - which is constantly playing war-games and using game-theory to plan ahead - constantly finds itself reacting late-in-the-game to what wasn't really that unexpected at all.

The problem is that anticipation and visioning involve risk and require courage. You've got to take a stand. It's far easier (and safer) to sit back, particularly in the government, to let things happen, and then react. Then you can point to "exogenous" market factors that changed the competitive landscape, and then appoint a clutch of committees to investigate the problem. And report back in twenty-five years. And collect a nice pension.

In fairness to the Postal Service, however, there is a built-in structural problem they face. There are crippling regulatory constraints that prevent them from being as nimble and responsive to market needs as a private-sector company would be. As they put in in a PowerPoint present that depicts the handcuffs they're wearing:

"Current regulatory requirements limit USPS's ability to quickly respond to the market and leverage its assets to diversify into more non-mail products and services that support its core mission."

Of course, any health care infrastructure established through new legislation is likely to be similarly burdened, similarly unable to react, and change course when market conditions demand such strategic nimbleness. We need to become much better at creating regulation without creating death-by-regulation.

Understand, I'm not someone who thinks any government is too much government. There are things that government should do and must do - and that the private sector should be kept out of it because there are inherent conflicts between the public good and the profit motive.

But as long as the comparison between walking into a Fedex office and the Post office is as much of a brand disaster for Uncle Sam as it currently is, the public will for an expanded role of government, or even a baseline role, will become as scarce as a 5-cent stamp.