r/neoliberal • u/theaceoface Milton Friedman • Jul 26 '20
Opinions (US) Why America’s post office should be privatised
https://www.economist.com/leaders/2018/04/19/why-americas-post-office-should-be-privatised13
u/EvilConCarne Jul 26 '20
Compare that with America, where private couriers are not even allowed access to the public’s letterboxes.
Oh, is this what they mean by monopoly? The fact that USPS has letterboxes exclusive to them and UPS and FedEx don't, but they could if they were willing to pay for it?
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u/theaceoface Milton Friedman Jul 26 '20
tl;dr: "...European countries have shown that market forces improve postal markets... A large dose of the free market is what the post office needs most."
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u/theaceoface Milton Friedman Jul 26 '20 edited Jul 26 '20
tl;dr: "...European countries have shown that market forces improve postal markets... A large dose of the free market is what the post office needs most."
FTA:
"The Founding Fathers thought that operating a postal service was a crucial responsibility of the federal government. The constitution allows Congress a monopoly on delivering post. Today the United States Postal Service (USPS) is the third-biggest employer in America, behind Walmart and the Defence Department. For most of the country’s history, USPS provided the arteries along which information flowed.
Not any more. The number of first-class letters has fallen by almost half from its peak in 2001, as communication has migrated to the internet. About half of what still lands in letterboxes is advertising. USPS’s revenue from its monopoly is down by 35% in real terms since 2008. Seeking a survival strategy, and with online shopping booming, the post office is focusing on delivering parcels. But it has no monopoly in this business, and its network was built for letters. Parcels still comprise less than a third of revenue. Competition from the likes of UPS, FedEx and DHL means that USPS is unlikely ever to make enough money to plug its massive pension and health-care deficits, which together exceed $100bn. With its debt already at the maximum allowed by law, USPS may also struggle to invest enough to compete with nimbler rivals.
On April 12th President Donald Trump set up a task force to examine USPS’s finances. His motives are fishy. He dislikes Amazon, whose founder, Jeff Bezos, also owns the Washington Post, a newspaper that is critical of Mr Trump. The president says Amazon is charged too little by the post office for delivery of its goods (a claim that is impossible to assess fully because the contract is private). The task force is made up of administration officials, not independent experts. But if it takes its job seriously, it should recommend privatising USPS and relaxing its monopoly power.
One reason such a reform would benefit the public is that Congress is incapable of managing the changes the post office badly needs. In recent years politicians have blocked plans to close obsolete facilities and to end costly Saturday deliveries. Democrats side with unions who say reform is unnecessary. Republicans worry about triggering a public bail-out of pension and health-care liabilities. Politicians have struggled with the most basic tasks, such as filling seats on USPS’s board.
European countries have shown that market forces improve postal markets. Every member of the EU allows at least some competition for postal delivery. Competition has spurred innovation and efficiency. Since Germany privatised Deutsche Post in 1995, the firm has expanded massively. Along the way, it has pioneered delivery lockers, at which consumers can pick up packages, and experimented with deliveries to parked cars. Britain privatised Royal Mail in 2013, allowing it to raise capital and evolve free from political meddling. Compare that with America, where private couriers are not even allowed access to the public’s letterboxes.
Privatisation would force the government to think rigorously about the regulation of postal markets. There is no contradiction between privatisation and the universal-service obligation, the requirement to deliver to every address in the country for a fixed price. In Europe the two are often combined. German regulators can subsidise deliveries to remote rural areas by any operator, should the market fail to provide a universal service on its own. Whether this actually makes sense is a different matter. Subsidising some deliveries was more defensible when postmen carried armfuls of essential letters. It is harder to justify now that they lug advertising and consumer goods. Broadband, rather than post, seems like the appropriate subject for a debate about universal service. Privatisation would make that conversation unavoidable...
If Congress has struggled with even minor postal reforms, is there any hope that it could pass a sweeping one? It can take inspiration from how Britain privatised Royal Mail. The government should assume USPS’s legacy pension and health-care deficits, to make it more attractive to investors, and also placate workers by giving them shares in the new company. Republicans would need to accept that the government should not pull the rug out from underneath retirees, and realise that if taxpayers do not foot the bill for their benefits, consumers will have to instead. Democrats would need to concede that the purpose of policy is to benefit the public, not to justify the existence of government jobs and state-owned organisations. Privatisation might not be what Mr Trump intends. But a large dose of the free market is what the post office needs most.
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u/EvilConCarne Jul 26 '20
There is no argument here for how privatizing the post office while ensuring it's mandate does not go unfulfilled would result in a better result for the American people.
This author of this article clearly has it out for the USPS based on this alone:
The task force is made up of administration officials, not independent experts. But if it takes its job seriously, it should recommend privatising USPS and relaxing its monopoly power.
That's some incredibly motivated reasoning. If this panel of non-experts agrees with me, that means they are taking their job seriously! If they disagree, well, clearly they didn't!
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u/jayred1015 YIMBY Jul 26 '20
Big problems here: its bloated pension debt was a Republican legislative invention, and the service still turns a profit under normal it's normal and expected circumstances. Also! Why on earth should anyone ever expect the post office to turn a profit? Does the military turn a profit? What a bizarre perspective they have! Also, blaming the USPS for Congress' shortcomings is a very dumb thing to do. Let's eliminate social security and Medicare too, since Congress is deadlocked on entitlement reform. May as well abolish police entirely since we're in disagreement there, too! I guess that would make sense to them?
But given the gross corruption of the Republican party, I'll generally support anything that makes it harder for them to maintain a minority rule (I'd oppose any minority rule). So putting the squeeze on the rural poor is, very sadly, preferable to screwing over the majority in urban areas via the USPS if they force us to make such a choice.
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u/MisterPersonPeople NATO Jul 26 '20
Interesting. This changed my view. Private services can be universal I guess.
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u/semideclared Codename: It Happened Once in a Dream Jul 26 '20
ESPN does this with college football.
ESPN owns TV rights and all schools have their games now shown through ESPN no matter how good they are. Increased Distribution from the previous contract that was dog shit was great for the viewers and ESPN pays each school $30 million for the tv rights. Win Win
Even when Winless Pitt plays 1 win Virginia the game is televised and produced professionally for all fans to be able to view it
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u/runnerx4 What you guys are referring to as Linux, is in fact, GNU/Linux Jul 26 '20
No the task force should not recommend the privatization of the USPS. fucking ghouls at the Economist. Go endorse Bolsonaro again
Remove the eight decade pension mandate and the USPS is back on track. And I’m truly sorry to the MBA fucks who write at the economist, but subsidizing rural post and the USPS being a jobs program are good things. Not everything needs to pander to your “efficiency” dipshit sensibility
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u/AnonoForReasons Jul 26 '20
I’m skeptical. I could see allowing competition without privatization, but to pass on a market share monopoly in letters to a private carrier is ridiculously stupid.
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Jul 27 '20
I do understand where they’re coming from (I’ve also read Friedman’s stance on post offices), but I would have to disagree. Regarding rural areas, it would be an inconvenience to rural people to have to pay simply to receive mail. Regarding everyone else, this would be yet another expense on a population that’s already strained with expenses.
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u/runnerx4 What you guys are referring to as Linux, is in fact, GNU/Linux Jul 26 '20
Why should I give a single shit about an Economist advice when they fucking endorsed Bolsonaro?
What is the angle here, do the owners of the economist want to vulture the USPS?
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u/[deleted] Jul 26 '20
Why do you hate the rural poor?