Free Markets, Free People

Your Tuesday “surprise”

And yes, I’m being sarcastic:

The U.S. Postal Service’s current business model “is not viable” and the mail agency should make deeper job and wage cuts, hire more part-time staff and consider outsourcing operations, according to a draft of a government audit acquired by The Federal Eye.

Auditors also urge Congress to remove restrictions on the Postal Service’s ability to cut Saturday mail delivery and close post offices, according to the report, which offers recommendations similar to the USPS’s own proposed 10-year business plan.

Lawmakers requested the Government Accountability Office report, set for a Monday release, as they prepare to consider the USPS plan, which was introduced last month. The proposals call for an end to six-day delivery and ask Congress to give the mail agency the ability to raise prices beyond the rate of inflation and close post offices if necessary.

Other than law, there is no reason the mail should be a government run service.  Nothing.  And especially now.  If ever a part of the government could easily be privatized, this is it.  Every single service it provides exists now in the private sector, and there’s not a single reason I can think of to continue subsidizing this fiscal black hole.  But as you’ll see, even as it loses billions of dollars a year, there is no appetite to shut it down.  Why?

Well of course there is the aspect of putting people out of work during a recession with high unemployment.  But even if that wasn’t a problem politically, would anyone seriously consider shutting this money loser down?  Instead, you, the consumer, will be faced with higher prices, less service and fewer locations.  How would you treat a private business that offered such a fix to their business problems?

You’d look elsewhere, of course.

That’s the power of monopoly of course – government granted monopoly.  It is against the law to compete against the post office.  But, as you can see, monopoly doesn’t grant guaranteed success or profit.  Everything the post office does can be and would be done by competing private firms to ensure the cheapest price and best service at that price point.  Instead you’re kept captive to an organization that is inefficient, unprofitable and overpriced.

So why isn’t the government at large at least putting a panel together (a favorite bureaucratic ploy to delay a decision – panel, report, furor has died down, results buried) to explore privatizing the post office?  Is it because the party in power isn’t in favor of shifting anything out of government’s control?  Then why aren’t the Republicans bringing it up?  If “smaller and less costly” government is the new standard, it would seem – given the report above and its recent history of loss – that the post office would be a perfect candidate for privatizing.  Or is it because politicians have so demonized the term “privatization”?

Why not shut it down and allow those who already do this privately to take it over?  Who would you depend on to get it to you if you had to bet on it – FedEx or USPS?  And would you object to FedEx (or UPS) doing it instead?  Yeah, me neither – and I’d bet, given most people’s experience with the private carriers, 90% of the rest of the country wouldn’t care either.

So what’s the hold up?

~McQ

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17 Responses to Your Tuesday “surprise”

  • I’ve been amazed that the Government Printing Office has been outsourcing work for the last decade and a half.
    I used to hear these horrific stories of stupidity from suppliers to the GPO about the union rules that made just about everything it produced, late.

  • The USPS has always been there, people are used to it, and it’s practically lost in the noise, budget-wise. Killing it would be a serious political loser. Most people don’t realize what a mess it is.

  • I see the USPS as an example of something that would have already died off if the government wasn’t feeding it taxpayer dollars.  When I think about it, most of the items I receive via postal delivery are junk mail, items that I discard unread.  Pertinent messages from family and friends come via email or social networks such as Facebook.  I track my finances via email and the web, and no longer receive bills through the mail.  Delivery of packages?  FedEx and UPS.  The only periodical I receive through the mail is the magazine from ESPN, and I’ve been thinking of having them stop delivering it, because by the time it arrives I’ve already read most of the articles… on their website.
     
    The USPS is running at a loss because it has become superfluous to a lot of people.  If ever there was an apt analogy to the buggy whip industry, I think the Post Office fits the bill.

  • One slight correction: the post office provides two things that private carriers don’t or can’t. First, they create physical addresses. This has to be common among everyone for delivery to universally work. Second, they deliver to rural addresses which are too far apart to make commercial sense to deliver to. Since the government does certain business by mail, it has an obligation to ensure that everyone has access to a mail service.

    • And of course, neither of those could be handled by a private concern at a cost to the taxpayer that is significantly less than the cost of the USPS’s total cost, correct? IOW, neither of those things you bring up require the USPS exist to fulfill.

  • The question is, “Why is the USPS losing money?”

    I suspect that it’s a combination of (as Tonus writes) attempting to fill a need that doesn’t really exist anymore and too many employees who get too much in pay and benefits.  It would be of some interest to ask the head of UPS and FedEx how much it would cost them to do the USPS’s job.

  • “The USPS has always been there, people are used to it, and it’s practically lost in the noise…”

     

    Well, memory isn’t what it used to be, but I remember years ago when this was all gone through.  The scenario goes something like this:  If the postal service was were private, because of its importance, a strike by its union would cripple the country.  The government would have to break the strike by taking it over.  So why not avoid all that by keeping it like it is now?
    Remember when few (other than Californicators) bought foreign cars?  Remember what the UAW was able to do while we were captive to American-made cars?  Hey, when one gets paid for NOT working…  Had not wiser heads prevailed and allowed foreign carmakers free market access over the vehement objections of the UAW, imagine what POS kinds of cars we would be repairing now and what we would be paying for them.
    A similar process has taken place over the years at the Post Office.  Had it been private it would now be like GM or Chrysler.  We would be paying $3.50 per letter, postal workers (those few who had not retired earlier after becoming “disabled” by the onerous work) would be retiring at age 45 with full benefits and the government would have to take them over to prevent bankruptcy.  Isn’t that obvious?
    So why is this “lost in the noise” issue coming into our consciousness right now?
    Let’s see, maybe it is another situation like where the publicists of the LN have started shining the spotlight on the fact that 47% pay no income tax in order to pump the VAT.  A fact that has been “no news here, move along” for decades.  The LN now claims that the VAT will solve the problem of only the rich paying taxes.  Of course, when the VAT passes, then subsidies for “the poor” coupled with  retaining or reinstituting the income tax (only for higher incomes) will enshrine formal income redistribution in our society.
    So now, after being “no news here, move along” for decades, suddenly the LN is claiming that something must be done about the postal service.  See the connection?  All we have to do to solve the puzzle of “why now” is figure out how “reforming” the postal service now either adds to the process of government takeover, redistribution of income or both.

  • Hey, wait a minute.  See this ad at the top of the page?

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    Find a Local Post Office
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    Maybe there is another whole reason for this post today.

  • I’ve always thought that providing secure, reliable postal service was something a country had to do for lots of reasons, and was in fact a legitimate function of govt.

    But in our particular case, we may be at the point where USPS is no longer needed.

    • I agree, but I think we still need the USPS. Imperfect though it may be, I prefer it to an unknown agglomeration of for-profit companies of  unknown and unproven expertise and reliability with little if any accountability.

      It’s a nice fantasy but the USPS, like the IRS, is here to stay as long as we wish to have a reasonably well ordered and well run civilization.  

  • I think we’re letting our position in the ‘tech world’ (as we type our arguments) influence our thinking about this.  As we like to point out, the laws of unintended consequences will appear pretty quickly on this if we take it down.  Could be having worked for an old pre ATT break up Regional Phone company taught me about having to provide service in very non profitable areas while ATT had the areas where the same wire run could service hundreds more customers (like running copper line to Knickerbocker Texas with one drop at the end of it…..).  Oh, we’ll pay for it, one way or another.
    But I wonder,  People who don’t have electronic media capabilities to receive and pay their bills….
    Rules for who ‘owns’ your mailbox, Federal laws pertaining to robbing a Fed-Ex truck (example) becoming a Federal offense, cost for having your letter sent to BFE (Knickerbocker Texas, envelope, 1, white, self sealing) versus Houston (along with the other 40 tons of mail that day), the aforementioned ‘carriers’ strike by various companies.  The expansion of ‘carrier Unions’ across ALL the carrier companies to ensure that union has the desired effect when they demand their raise, and their COLA,…chuckling as I think back on Mark Twain’s description of postal bags being left by the daily stage for the ‘indians to read’ ( to lighten the carriage load ).
     
    I don’t think government could keep their cotton picking hands off it either in making sure the ‘playing field is level’…Just a feeling…

    • ” cost for having your letter sent to BFE (Knickerbocker Texas, envelope, 1, white, self sealing) versus Houston”
      I don’t think this would really be a problem if mail were privatized.  Neither FedEx nor UPS charges an additional fee for their priority mail services based solely on the accessibility of the address.  If I want to overnight an envelope from Chicago to NYC or from Chicago to say, Sibley, IL (a town of about 150 people in the central part of the state), the cost is exactly the same.  I don’t really see why privately-carried first class mail would necessarily be different.

      • I’m not sure it would be, could be like any other business, where occasionally you know you’ll take a loss(Knickerbocker) but you’ll still make a profit (Houston), but it does make me stop and consider if the government wouldn’t mandate it even though they were no longer providing the service.  Still, it IS an opportunity for little mom & pop delivery services (just as it was an opportunity for mom & pop Federal Post Offices, literally in people’s houses,  the likes of which I recall from summers spent in BFE Maine).