Here’s a letter that I sent this morning to the Wall Street Journal:
American Postal Workers Union president William Burrus complains that “It is deeply troubling that Journal editors advocate ending the Postal Service’s exclusive right to sort and deliver mail. The Postal Service must remain a public service if we are to honor our nation’s commitment to serve every American community – large or small, rich or poor, urban or rural – at affordable, uniform rates” (Letters, Sept. 2).
Apart from disingenuously describing monopoly as a “public service,” Mr. Burrus makes two unfounded assumptions. The first is that private, competitive firms won’t supply everyone willing to pay. Small-town America brims with competitive private firms operating the likes of affordable supermarkets, motels, satellite t.v., restaurants, and clothing stores – oh, and also express overnight mail delivery!
Mr. Burrus’s second wrongheaded assumption is that it’s good that postal rates be uniform. How can it make sense that the price of mailing a letter from Manhattan to Brooklyn be the same as the price of mailing a letter from Manhattan to Point Barrow? But if such enforced “uniformity” does make sense – if it makes sense to charge prices that do not reflect the conditions of supply and demand – then why doesn’t the USPS pay all of its workers “uniform” wages? Why aren’t newly hired clerks paid the same salaries received by thirty-year veteran mail carriers?
Sincerely,
Donald J. Boudreaux
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There you go again, muddying the waters with that logic and common sense. Have you no shame, sir?
Ending the USPS is a simple matter. Nothing needs to be done except terminate the legislation that gives the USPS the exclusive monopolistic right to carry first class mail. The US Post Office subsidizes junk mail by charging excessive fees on first class mail.
As soon as competitive firms (Fedex, UPS, etc.) can carry and deliver first class mail the Post Office would disappear as no one would pay rates that are much higher for bad service and junk mailers would stop using them at the much higher rates than are currently charged. Oh well, a perfect win-win for everyone
It’s probably the reverse. The credit card offers they send out on a daily basis are the only thing that justifies daily delivery, and 20 cents per house is enough to keep them in business. When all that blew up they started posting 8 million dollar losses.
The USPS has long subsidized 2nd and 3rd class mail by charging too much for first class mail because they have a monoply on first class mail given to them by legislation. If they had to compete with private companies for the delivery of first class mail they would to charge much less for the first class mail and therefore charge much more for the junk mail. If you do NOT like junk mail this would be a win-win situation. If you happen to make your living sending out junk mail, they you would not like this situation because you are being subsidized by the US taxpayer. Which one are you?
Not sure I understand. Why would USPS raise the rates for bulk mailers? Bulk mailers presort their mail down to the carrier route level. Processing costs for bulk mail are very low.
I cannot envision bulk mailers paying much more for better quality. Reliability is not a big issue. If 5% of their ads get misdelivered, they’ve still reached 95% of their intended audience.
The USPS has long subsidized 2nd and 3rd class mail by charging too much for first class mail because they have a monoply on first class mail given to them by legislation. If they had to compete with private companies for the delivery of first class mail they would to charge much less for the first class mail and therefore charge much more for the junk mail. If you do NOT like junk mail this would be a win-win situation. If you happen to make your living sending out junk mail, they you would not like this situation because you are being subsidized by the US taxpayer. Which one are you?
Why do you assume I must be one or the other? Actually, I appreciate many of the offers I receive via direct mail. I was a small-time direct mailer for a few years in the 1990′s, but I opted for 1st class mail for my specialized customer base.
Are you sure that first class mail subsidizes third class mail? Bulk mail rates are lower because customers are required to pre-sort and bundle mail down to the zip and carrier route level. This greatly reduces the handling cost incurred by USPS. The delivery costs for all mail are spread across the many pieces delivered to every city block.
What is the basis for your claim about first class mail subsidizing second and third class mail? Have you read an economic analysis which makes this claim?
Don,
The following comment seems a bit disingenuous.
“The first is that private, competitive firms won’t supply everyone willing to pay.”
The real issue is always price. It is unclear private firms will offer this at sufficiently low price. Perhaps you can elaborate on the current state of broadband internet coverage in rural areas.
Mail delivery doesn’t require the expensive infrastructure of miles of buried cable or fiber.
BTW, DirectTV now offers broadband via satellite in rural communities at prices equivalent to cable and fiber.
It’s unclear what is a “sufficiently low price” is, but we can find that out by simply allowing other firms to compete with the post office. Perhaps we can begin to get a clearer picture of the true cost of delivering mail to rural areas by eliminating the statute which prevents any competitor to the USPS from delivering mail for less than $3.00!
I lived in rural Kentucky and we were able to purchase TV and internet via satellite on Hughes network. It was as good as any cable we have had, and a similar price.
Even if that were not available, does it mean that someone in Louisville should be forced to pay so I could have the privilege of internet and TV access? I could just as easily moved to Louisville.
Wintercow,
First, please see my previous reply to “methinks” above for the broader issue. In particular, you need to consider why some service should be handled by the governement. As for “I could just as easily moved to Louisville”, this may work for you. However, have you consider the consequence of a lot folk currently living in farming communities do the same? Is it net positive for society?
With regard to you broadband service, do you really know how Hughes network compares to broadband internet service in other major cities?
This website will let you test it out.
http://www.speedtest.net/
Where I live, the broadband speed are:
download – 12.53 Mb/s
upload – 9.24 Mb/s
I would be very surprise if you broadband service can do even 1 Mb/s (or 1000 Kb/s). In other words, the service you’ve got is very likely 1/10 or less than what is avaiable in a major city. The reality is no private company will invest in the infrasture so that you can get something comparable.
This is the kind of technological handicap that rural community has to live with. This handicap is ultimately bear by your chidren.
“you need to consider why some service should be handled by the governement”
And when you do that, it is amazing how hard it is to find such a service.
That rural communities are lagging a few years in broadband Internet speeds is hardly a tragedy. Having the government confiscate billions of dollars of people’s hard earned money to invest in an Internet infrastructure that WiMAX and 4G are about to make obsolete, would’ve been a tragedy.
Hi,
I’d just have to politely disagree. This is why:
” However, have you consider the consequence of a lot folk currently living
in farming communities do the same? Is it net positive for society?”
Yes, and yes. That is precisely what has happened over the last 200 years in
the modern world, and I would suggest that we are a little better off today
than even in the recent past.
But I really would like to raise a bigger issue. 30 years ago there was no
such thing as the internet. Now by some stroke of luck it is common and
powerful and fun and cool and … 30 years ago the internet was not
available in rural communities, and people chose to live there. Now that
something is newly produced does it entitle folks in rural America to have
subsidized access to it, paid for by folks in the cities and suburbs? I am
not sure I think this is a good idea. Furthermore, as one studies how new
products, services and technologies disperse, the continued cost reductions
you tend to get from competition and consumption by the relatively better
off factions of the consumers, the more these products and services become
available to the folks everywhere else. Maybe it makes sense to “help” push
this process along, but that is not at all clear to me.
Regards,
Mike
Michael Rizzo
University of Rochester
Department of Economics
234 Harkness Hall
Rochester, NY 14627
(585) 275-5273
http://theunbrokenwindow.com
Everything is a trade-off, and somewhat slower internet data rates in rural area do not represent a significant “technological handicap’ for rural children. I presume that those who live in rural areas are very happy to trade the internet data rates available for the lack of crowding, pollution and crime, etc of cities.
There are certain basic services that our government provide universally to all the citizens. For example, police fight crime, fire department handle fire, the USPS handle basic communication needs, transportation dept build roads, and etc. This has been the case for hundred of years for the US. Yet, anyone of these service can also be handled by the private sector.
1) To start, Don needs to clearify why we’ve deem it neccessary and benefitial for the public provides the above services to all it citizens. What are the criteria for determining when a service should be provided publically vs. publically. Under what circumstance will solely relying on the private sector to provide critical services fail to service the public interest?
2) After addressing #1, Don can than make the case why for hundreds of years we’ve deemed the uniform service from the USPS provided to all as important but the author (Don) now feels should be handled the private sector.
This current blog entry from Don lacked critical analysis of the root issues. It is purely an ideologically driven rant.
Two other clarifications.
1) On the surface this “eliminating the statute which prevents any competitor to the USPS from delivering mail for less than $3.00!” sounds right. However, it is not so simple. USPS has a mandate to provide service universally rural areas and major cities alike. A private company on the other hand can focus only on the most population dense areas. Clearly, the cost is vastly different between USPS and a private company. In fact, if we allow private sector to profit by focus only in profitable regions while USPS must service all of US, then we are really subsidizing the the private company earning.
2) On Direct TV broadband service – I will address that in my reply to wintercow20.
“What are the criteria”
There may have been reasons long ago when they were started up, but now—tradition, and severe lack of economic imagination, is just about all that I can think of. That and lack of a strong moral code.
“In fact, if we allow private sector to profit by focus only in profitable regions while USPS must service all of US, then we are really subsidizing the the private company earning.”
It never ceases to amaze me how otherwise intelligent people can believe such utter nonsense. It isn’t a private company’s responsibility to deliver anywhere it doesn’t choose to, so there is nothing resembling a subsidy unless there is ACTUALLY a subsidy.
Further, if the private companies are more efficient, then you should WANT them to do as much as they desire, because the total cost of delivery fees plus taxes will be minimized.
Finally, the USPS may be forced to operate under absurd mandates. That may not even be their fault. It certainly isn’t MY fault, or the fault of private carriers, or the fault of most taxpayers and purchasers of delivery services–so those people certainly shouldn’t be punished for it.
Regardless of who to blame for the ridiculous government controls, it just is not as efficient a system as it could be if fully privatized.
vikingvista,
You’ve made the same sloppy mistake Don made. You’ve simplistically stated your opinion without backing them up with any concrete evidence. Please demonstrate with substance of what has changed such that a public postal service for all is now antiquated. By the way, just to be clear, are you also suggesting other services such as the police department should too be privatized? After all, we do have private security guard companies. How about the fire department, the transportation department, the courts, and etc. Why not privatize all these?!
It takes no effort to rant about your opinion without substance. Unfortunate, that isn’t an intellectual discussion that will further anyone’s understanding. It is also very boring.
They have a like button but they don’t have a don’t like button. I like youtube’s thumbs up and down feature. Thumbs down here.
Just more blind shameless self-serving advocacy. The more detached from reality, the more pathetic.
Simply end their legal privileges, and after a few hard decisions, the USPS will find itself FINALLY efficient and profitable, either on their own, or under leadership of the companies who purchase them.
Of course, USPS does not offer the same service to all locations at the same rates. Bulk mailers are charged different rates for local and extended delivery, and are allowed zip code level discounts from standard rates based on volumes.
I believe it is economical to charge infrequent mailers the same rate for all standard mail destinations. The cost to return mail due to insufficient postage would be very high if the public were required to determine the postage for every letter mailed.
The cost to return mail due to insufficient postage would be very high if the public were required to determine the postage for every letter mailed.
This does not seem to be a problem with other delivery services.
Other delivery services do not currently offer a 44 cent product. Other delivery services pre-determine and collect postage for their customers and/or require an account which is charged post-delivery. Both those options would require overhead which, IMO, would exceed 44 cents per letter.
Maybe the overhead costs would be prohibitive, as you say. If they are, then a free market would wind up with the vast majority of first-class mail still going to through the USPS. So where’s the harm in trying a competitive market?
Maybe flat-rate really is the only cost-effective way to go. If so, maybe FedEx or UPS could do it for 43 cents. There’s only one way to find out.
I agree completely that a competitive market would be preferred to the monopoly we have. I wouldn’t bet on FedEx even considering trying to compete in that market, however. Based on my 1990′s experience as a planner at FedEx, I’d say that processing and delivery of non-priority mail would not build on FedEx’s strengths. But it has been a dozen years since I was privy to the thinking of FedEx executives, so things may have changed.
Both those options would require overhead which, IMO, would exceed 44 cents per letter.
Which suggests that the post office delivers at below market rates which is why it requires frequent budget bailouts at the expense of…?
I think you may have misunderstood my argument. I’m saying that variable pricing would require one of the three costly requirements I listed. Variable pricing would increase the delivery cost to higher than 44 cents. Flat rate pricing is much cheaper because it avoids the costs of dealing with incorrect postage.
The post office probably delivers mail to most urban locations at a cost below 44 cents per piece. The cost to deliver mail to small towns and rural routes is no doubt much higher than 44 cents.
Honestly, who cares what happens to first class mail? We have cell phones, fax, email, and other Internet services, in addition to the private carriers. Why not just deliver FCM 3x/wk, or 1x/wk? Why not just let FCM die? I really doubt any of us would struggle without it.
I don’t know, Vikingvista. Someone must care about first class mail. USPS delivers over 90 billion pieces of first class mail annually. Volumes are down about 6 percent from 5 years ago. But 90 billion pieces is a long, long way from dead. Over the same period, bulk mail – or standard mail – has grown by about 11 percent to 99 billion pieces. With total delivered volume growing, it’s hard to see the rationale for less frequent delivery.
As always, Don, your letters are amazing. When are you going to publish them as a book?!
From an unpublished work by economist/historian Jeff Hummel, discussing here the origin of Mr. Burris’ vaunted postal service: “Another permanent legacy of the [American] Revolution was socialized mail delivery. In 1707, during the War of the Spanish Succession (known in America as Queen Anne’s War), the British State had established a Crown monopoly on postal service in colonial America, with the explicit goal of facilitating censorship and suppression of sedition and treason.” It performed this role in World War I and II as well, suppressing dissent and censoring opponents of the government. It has also been a major source of patronage jobs for both major political parties.
If only it could deliver the mail…
One note… It *MIGHT* be good for postal rates to be uniform. After all, the overhead associated with determining postage for a standard letter based on distance may be cost-prohibitive, and thus UPS/FedEx may simply assign a uniform postage. Or, they may assign “buckets” of postage i.e. if you’re in CA and want to send to AZ, NM, NV, UT, and OR, it’s $0.15 and farther away it’s $0.40.
What WILL be determined is the most efficient method for pricing and sending mail, whether it be uniform or not. Right now we have no discovery process to make that determination.
I agree that ending the monopoly on non-priority mail would enable pricing experimentation. I’m skeptical about the use of zoned pricing for very low-priced deliveries.
UPS has effectively used zone pricing for quite a while. When I was a strategic planner for FedEx in the 1990′s, we were considering zoned pricing as well. I’m not sure when FedEx made that decision. Of course, both UPS and FedEx receive much higher revenue per item than does USPS.
Non-uniform pricing requires one of three things:
1. pre-ship human intervention to ensure adequate postage;
2. shippper accounts to enable credit and post-delivery collection;
3. method for handling postage errors – especially insufficient postage.
All three requirements will cost, IMO, more than the 44 cents postage now received for letter delivery.
I agree with George that if you don’t support the post office, you are not a patriot. In fact, it’s downright treasonous to question its legitimacy. And to call commercial advertisements sent through the mail “junk”. Well, that is just heresy. That “junk” is what makes the whole system work. If you didn’t have to go out to your mailbox once a week and empty out all the “junk”, well, you’d probably miss a birthday card or a rebate check!
Poor Mr. Burrus’ USPS–It is exempt from paying federal, state, or local taxes on its income, sales, purchases, or property. It is immune from most forms of regulation, such as antitrust, motor vehicle registration, parking tickets, zoning, and land use restrictions. It is also able to borrow money at the lowest possible rate through the U.S. Treasury. And with all these advantages, the USPS still can not balance its books: $7 billion in the hole. The injustice! The horror!
1) I used to live in Western Colorado, in a small town in a county that on a good day had all of 1500 people! Yet, every day the brown UPS truck rolled through town making deliveries. Sure UPS get’s a larger price per package but the ability to also deliver low priced mail might be a profitable adjunct to their parcel business.
2) A national postal service, like many artifacts of government, may have been a necessary and practical resource during the early centuries of this country. Times have changed.
3) The local postmaster general base pay is about $112,500 per year. Last year the USPS purchased some 14 multi-million dollar homes from relocating postal employees. One of them was a $1.2 mm home for a postmaster general in South Carolina. How can a postal employee with a base salary of $112,500 buy a million dollar home?
Time to end the postal monopoly.
USPS Postmaster John Potter’s compensation package 2009 is $850,000 http://abcnews.go.com/Business/story?id=6899700&page=1
vikingvista,
“…Internet infrastructure that WiMAX and 4G are about to make obsolete, would’ve been a tragedy.”
From this ridiculously simple minded quote, It is very clear you know absolute nothing about these technology and the business of offering services base on these technologies. The fact that you didn’t even bother to read up on the technical advantages, limitations and costs of these technology strongly suggest you are blinded by your ideology. It is unfortunate that your goal isn’t debate to get at a deeper truth.
I’ll bite.
When the government, and USPS, was established there was no other nation-wide architecture that COULD handle things such as mail. Horse and buggy transportation and communication made such things difficult; unless I’m very mistaken, most industry was very localized. The advent of telegraph and train was the beginning of end to that. Now, with easy communication and transportation to anywhere, any time, anyone truly can set up a nation or planet-wide organization and infrastructure with relative ease (compared with back in the day). So, whereas 200 years ago you would be hard pressed to be able to compete, now, not so much.
Perhaps, and I’m just spit-balling here, changing times and changing technologies require a re-evaluation of how things have always been done. Maybe, just maybe, those changes might make those time-honored things into (gasp!) irrelevant relics of the past? Just a thought…..
Of course, the pony express managed to compete with USPS quite well 100 or so years ago….until it was forcibly disbanded….
“It takes no effort to rant”
How about you use half the energy you waste whining about people’s opinions and do what people posting here have done–look up and read some articles or books by people who have considered these things.
The position that needs defending is the one that gives legal advantage at others’ expense. Without a defense–and I have not heard one from you–the practice is unjust, unfair, and should be stopped.
“Why not privatize all these?!”
Well now, that is a question for someone who wants to “not privatize”, isn’t it? If giving them unfair advantage cannot be justified–and you certainly haven’t done so in your vacuous spewings–then the question has no answer.
RE: “You’ve simplistically stated your opinion without backing them up with any concrete evidence.”
An interesting criticism in light of the fact that it describes exactly what you’ve done in each of your posts on this thread.
I don’t misunderstand your argument at all.
The way to deal with the issue is put it out in the market and see if someone can figure out how to profitably deliver mail, including the issue of variable pricing costs.
All those words and not one substantive idea for me to respond to. Since you didn’t tell me, I have no idea what you are talking about. I have to assume that you don’t either.
Actually it is worse. Since I have read extensively about these technologies–following them diligently over the years, and applying my formal engineering training in their comprehension, I can confidently assert that you are a vacuous buffoon.
At 40 cents/letter (or whatever it is this week), even I use it. My point is that if it didn’t exist, it would hardly disrupt my life in any appreciable way. On the few times per year that I actually feel like mailing a letter, any of the other alternatives would do just fine.
I agree that a free market would develop the best solution for the most consumers at the lowest price. But I don’t expect Congress to allow that anytime soon. If they did, though, I do not believe a better alternative to USPS would develop for many, many years. The infrasturcture in place for regular mail delivery dwarfs by a huge margin what the largest potential competitor now possesses. IMO, the first result of mail deregulation would be higher postal rates.
IMO, the first result of mail deregulation would be higher postal rates.
As they should, the profit/loss signal is essential to market functioning.
wintercow20,
1. farming labor force:
Technology and productivity increase will result in excess labor force in farming. Consequently, it is good that the excessive labor force move into the cities. This was very good for the US.
However, Today, the US has already reached a balance in its farming labor force. However, farming labor force can become imbalanced in the opposite way (i.e. too little). If suddenly a large population of the remaining US farmers leave for the cities, the resulting imbalance will be negative. This imbalance will have negative implication for food supply and US national security.
2. Government’s role to subsidize access to new technology in rural communities.
Before offering my view, I like to clarify that this isn’t related to my original objection to Don’s blog entry on the USPS. Also, please be aware that I don’t have any deep analysis to support the following; it is just an opinion.
For most new technologies, I don’t think we need any subsidies. However, the Internet isn’t just another run-of-the-mill technology innovation. Internet has already fundamentally changed the human society. It is overwhelmingly evident in business, in politics, in entertainment and etc. Amazingly, the interent is still just getting started.
I believe anyone with inadequate access to the internet is significantly handicap in today’s world. This is particularly true for the youth.
I also view this from a more sappy angle. I think it is given that we need the US farmers to continue to produce our food. I also think farmers as a group live a more difficult lives. At the same time farmers earn less and consume less in their life time compare to people in the city. Given this, I am very comfortable with the idea of subsidizing internet access for rural communities. I particularly like the idea of the children in rural areas having equal internet access as the children in cities.
Because of the importance of the internet, I do think we should at minimum seriously evaluate if subsidizing internet access for rural communities is necessary.
Alexei,
I agree your suggestion is the right approach.
vikingvista,
“The position that needs defending is the one that gives legal advantage at others’ expense … the practice is unjust, unfair, and should be stopped.”
You are clearly ignorant of the fact that your entire life, from cradle to grave, has been and will be subsidized in one form or another! Your entire life is based on legal advantages at other’s expense!
When you were in school, it costs more to educate you than the bright kids. The parents of the bright kids could have pay less for their children’s education in comparison to you. However, because of our public education system, they in fact subsidized your education.
When you are an adult, it cost more to provide for your safety than those smart enough not to get stuck in untenable situations. Others could have pay less for their personal safety. However, because of our public police service, your safety is subsidized at other’s expense.
When you are old, your health care cost will be more than those with better genes and lived a more balanced life. Again, with our health care system, a big portion of your health care cost will be subsidized by those better than you.
I should also mention the subsidies your parents gave you! I guess legally they have no choice but to provide for your well being. They must even if, hypothetically, you are dim and unbalanced!
Did you know you had so much legal advantages over so many!
If you are curious about what life is like without being subsidized by society, you can read up on the The Dark Ages. If you really want to talk the talk and walk the walk, you should join a village somewhere deep in the Africa juggle. Remember, no one is forcing you to live a self righteous lie in this society!
Well, have fun! A more primitive environment will fit better with your simple world view!
Vikingvista,
Excellent use of the powerful name calling technique from grammar school! Well done showcasing the very high level of your persuasion skills!
Please see my reply to your other message further below. Enjoy!
I should also add the following.
William Burrus made a disingenous argument for why the USPS should remain a public service. Don Boudreaux took pleasure in pointing out the disengenous comment from William Burrus. However, Boudreaux did the exact same thing that he critize Burrus for. Boudreaux’s comment was also disingenous!
The hypocracy of both Burrus and Boudreaux didn’t further the understanding of the real issue. Instead of bridging the 2 sides of this argument, they’ve only broaden the chasm with they simple ideological views. They’ve broaden the chasm because it is obvious when an argument is disingenous. Both sides know it is just a sophomoric debate trick. Disingenous argements will only deepen mistrust. It almost never change minds.
As for me, I took the guilty pleasure of pointing out a disingenous response to a disingenous response! To bad, many others failed to see the humor in this!
Lastly, I could care less if the USPS stays or goes as a public service. As long as a reasonable evaluation is done, either USPS outcome is fine by me.
I encourage you to take a basic economics course on the role of prices, and
which includes a primer on the economic history of the US.
Vikingvista: “Why not just let FCM die? I really doubt any of us would struggle without it.”
Vikingvista: “My point is that if it didn’t exist, it would hardly disrupt my life in any appreciable way.”
Those are two very different arguments. Regardless of what value you see in first class mail, it is obvious that the nation as a whole appreciates its value. In fiscal year 2008, USPS received $38.2 billion for first class mail service.
We can argue all day long about whether the USPS monopoly is justified. We can argue about whether a free market would increase the effectiveness and lower the price of the services provided by USPS. But one point is very clear: U.S. consumers are choosing to use USPS services for nearly 200 billion deliveries annually.
Wintercow20,
Thanks! I also recommend you review the following from an introduction to economics class!
1. The concept of equilibrium
2. When markets and prices fails
By the way, I am hesitant to think you teaches at UR. You’ll notice that teacher salary in US is another example of market and price failure. At least in the sense that the desired social outcome doesn’t align with the market outcome. Those most qualify and able to teach don’t teach because the salary is just too low!
I don’t see Don’s statement as disingenuous; however, your selective quoting was disingenuous. Why did you leave out the second sentence where Don specifically mentions affordable services? Was it because it would undermine your point?
yet another Dave,
Evidently, you have trouble with simple logic and basic reading comprehension.
What I’ve wrote are criticisms of what others have written on this thread. Others writings are my evidences.
By the way, did you notice my current criticism of you is evident by what you’ve wrote?!
You mean just by simply naming some affordable private services in rural communities automatically imply all service are affordable?!
Nice demonstration of your critical analysis ability.
You are correct that I know nothing about economics – in particular that I
should treat sunk costs as sunk.
“it is obvious that the nation as a whole appreciates its value. In fiscal year 2008, USPS received $38.2 billion for first class mail service.”
JD, if McDonald’s received government subsidies or protections so they could start selling hamburgers for 5 cents/ea, I’m sure their volume would skyrocket, and then you’d be saying “See how obvious it is that everyone appreciates their value”. And then I would say, “Abolish that subsidy, and we would all be fine (like in our real world today)”. And then you would say again, “Obviously you are wrong, because see all the hamburgers McD’s sells.”
I am telling you that if FCM died, the country would function just fine, because there are readily available substitutes. Would I have to pay UPS $5 to send a letter? Maybe, but spending $25 to $50/year to send documents across the country is not a major hardship. Are there people who use USPS services much more frequently than I–people who are apparently unaware of scanners and email, and fax machines? Of course, but they too would have substitutes. It may cost them more for sending mail, but if you include the bailout and inefficiency costs to the economy as a whole, we’d be better off.
And of course, I’m not saying we should BAN FCM at any price. If someone wants to try to profit of a similar service, that is their right. I am merely pointing out that FCM is not a vital service in this day and age, and it would not long be missed if it disappeared.
And if the junk mailers providing the bulk of that $38 billion service to the USPS want to pay the full price for maintaining it, that is none of my business either.
vikingvista: “if McDonald’s received government subsidies or protections”
Are you claiming that USPS first class mail is subsidized by taxpayers? What government subsidies are you referring to which allows USPS to offer first class mail for 44 cents? What subsidies? Are you referring to sales tax exemption enjoyed by USPS customers?
Are you referring to the USPS monopoly protection? Why would monopoly protection mean that USPS would offer a lower first class mail rate? When an business enjoys a monopoly, it raises prices. It does not lower them.
I don’t understand what you are arguing, vikingvista. What is the point of talking about ending first class mail? Because you personally do not find it valueable? Why would anyone want to end first class mail? If the service is being used more than 90 billion times a year, why would anyone want to end it?
If you wish to argue that other corporations should be allowed to offer first class mail, I can understand why you would make that argument. But why would anyone argue that a service used 90 billion times should be ended?
“Are you claiming that USPS first class mail is subsidized by taxpayers”
Let’s not get far afield here. No, I am telling you that they have government protections. The USPS should be treated no differently by the government than you, I, FedEx, UPS, or McDonald’s, but they are. Like a subsidy, those protections are a special benefit to the USPS. If you disagree, then maybe you can join me in my advocacy that those supports be removed–as you don’t think removal will hurt the USPS. That is *ALL* I ask–that all legislative supports, all special government recognition of any kind, be abolished.
Don’t let that distract you from my point about FCM. Even if McDonald’s hamburgers were to die altogether, with all of their billions and billions served, it would not be a difficult ordeal for Americans to get around (and please, don’t reply saying that I support banning hamburgers. I do appreciate the courtesy of recognizing my point).
And the REASON I downplay the value of FCM, is to hopefully get you to recognize that trying to preserve FCM does not justify any special government protections for the USPS.
But if you REALLY LOVE FCM, then I am all for you doing everything you can without special privileges to maintain that service. I don’t hate the service, I hate the injustice of special treatment.