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Privatize the USPS?

Races for the Senate, U.S. House, etc. and other issues of national importance.

Privatize the USPS?

Postby ArturoBandini » Wed Jan 09, 2013 7:05 pm

In response to a tongue in cheek comment regarding Charter cable's junk mail non-policies in another thread, a conversation about the US Postal Service happened. I'm moving it to this thread so Wagstaff can keep his rant energy focused firmly on Charter cable in that thread. Here's where we left off:
Prof. Wagstaff wrote:
ArturoBandini wrote:The USPS has a monopoly on letter delivery with a few minor exceptions for super-urgent items.
I have no problem with this whatsoever. (And you can always stick your letter in a box and ship it UPS, if you don't mind paying more and getting crappier service.)
What an absurd response - sure, I could also purchase a car, tape my letter to the windshield and hire a driver to drop off the car on the lawn at the destination address. And anyway, drawing attention to the letter monopoly enjoyed by the USPS is not to criticize the service itself, but to point out that comparison with competitors is practically impossible. You can't say that USPS letter service is better than something else, because there is no something else that is an appropriate comparison. At least, not recently.
Prof. Wagstaff wrote:Of course, which is why I never suggested private competitors should be outlawed or anything -- I just don't use them (and 99.99% of my customers thank me for that.) You, on the other hand, called for the dissolution of the USPS because blah blah blah free market and whatever.
By supporting a monopoly on letter service, at least, you are suggesting that private competitors should be outlawed in that space. But we were talking about parcel service, so I grant your point. Anyway, I called for privatization, not dissolution. I don't care if the USPS continues to exist, but it should exist without subsidy and without monopoly protection. Actually, I would be happy to allow the USPS to be continue to be supervised by the government if the subsidy and monopoly protections were removed, so I'm not even a hardliner for privatization.

Do you actually know that 99.99% of your customers actively thank you for using USPS, or are you just inferring that?
Prof. Wagstaff wrote:I really couldn't disagree with you more strongly, both on principle (I believe the government should help subsidize quality postal service for everyone --just as the fellas who wrote The Constituion did) and also because what you're suggesting would almost assuredly put me out of business.
Two points - the Constitution was fairly vague on the implementation of the postal clause, and to me it says nothing about monopoly protection and subsidy, merely establishment. Additionally, it is merely within the powers of Congress to establish postal services and roads, it is not an obligation (imagine the same interpretation being applied to Congressional war declaration powers).

Upon recognizing that you are dependent on the subsidized USPS for your own living (if that is indeed true) - some of your advocacy in favor of preferential treatment for the USPS must be construed as self-interested rent-seeking. That aside, you should consider the alternatives more deeply - maybe you couldn't stay afloat at the present rates of competitors ceteris paribus, but there is no reason to think that those rates would stay the same absent the monopoly protection and subsidy of the USPS.

To make a final point, if the present service and rate structure of the USPS that you favor is in part the result of monopoly letter privileges and revenues thereof, maybe you shouldn't be so critical of Charter Cable and other junk-mail offenders - their junk mail is helping you get lower parcel rates!
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Re: Privatize the USPS?

Postby Sandi » Wed Jan 09, 2013 8:19 pm

To make a final point, if the present service and rate structure of the USPS that you favor is in part the result of monopoly letter privileges and revenues thereof, maybe you shouldn't be so critical of Charter Cable and other junk-mail offenders - their junk mail is helping you get lower parcel rates!


I used to take the time to write "Refused" on junk mail, which might work for charter. Legally the USPS is required to return the mail to the sender. Although I think some of it gets thrown away, it does seem to cut it down some.

If a company sends me junk mail with one of those Business Reply envelopes, then I really stick it to them. Legally you can tape the prepaid reply envelope to a box up to 40 pounds in weight.

I sent a box with an old car rim to AARP when they were overly persistent. The letters stopped for a few years: they are arriving again, but not nearly so many.
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Re: Privatize the USPS?

Postby pjbogart » Wed Jan 09, 2013 8:26 pm

Great idea, Arturo. I'm going to start investing in paper and mailbox manufacturers right away.

"Well, you see sir, now that private companies are delivering your mail, your actual mailbox is going to look something like your virtual mailbox. The most cost effective way to approach this problem is to buy a coffin, use it for a mailbox until you die and then be buried in it."
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Re: Privatize the USPS?

Postby Prof. Wagstaff » Wed Jan 09, 2013 8:26 pm

ArturoBandini wrote:You can't say that USPS letter service is better than something else, because there is no something else that is an appropriate comparison.
There are all the other postal services around the world. Ask anyone who actually knows what they're talking about: Ours is the best. Is it possible to do it even better? Perhaps, but you seem to think there's something that needs fixing, while I don't think there is. Our postal system already works phenomenally well and does so at a very reasonable price. Why "solve" a problem that doesn't exist?
ArturoBandini wrote:By supporting a monopoly on letter service, at least, you are suggesting that private competitors should be outlawed in that space.
I suppose you're right, but as I said above, we don't need private competitors when what we have already works better than any similar system anywhere else on the planet.

ArturoBandini wrote:Anyway, I called for privatization, not dissolution. I don't care if the USPS continues to exist, but it should exist without subsidy and without monopoly protection. Actually, I would be happy to allow the USPS to be continue to be supervised by the government if the subsidy and monopoly protections were removed, so I'm not even a hardliner for privatization.

The only subsidies USPS gets that I am aware of are to help pay for services to the disabled and overseas voters. Other than that, they haven't received a dime in tax dollars since the '80s.
The monopoly protection is in place to guarantee that every U.S. citizen gets the same service and rates as every other citizen. I think that's a good thing. You disagree. Not really much more to discuss, is there?
ArturoBandini wrote:Do you actually know that 99.99% of your customers actively thank you for using USPS, or are you just inferring that?

For fucks sake, I haven't taken a poll, no. But I've discussed shipping methods with dozens of customers in the 13+ years I've operated my business and they all agree that USPS provides the most reliable service. I think it's fairly safe to assume that those opinions are representative given that nobody has ever once complained that I don't use other services.
Prof. Wagstaff wrote:Upon recognizing that you are dependent on the subsidized USPS for your own living (if that is indeed true) - some of your advocacy in favor of preferential treatment for the USPS must be construed as self-interested rent-seeking.

Of course part of my advocacy is self-interest. I admitted as much already. And what the fuck is "if that is indeed true" supposed to mean? I earn my living boxing and shipping. If my customers suddenly had to pay more, it would decrease my business. I know this is true, because it happened post-9/11 when overseas Surface Mail ceased to exist. Now everything goes Priority Mail by plane, and I lost a lot of regular customers who could no longer afford the shipping costs. And yes, I've checked -- it's still more expensive to go with other shippers overseas.
Prof. Wagstaff wrote:...there is no reason to think that those rates would stay the same absent the monopoly protection and subsidy of the USPS.
I guess at this point you need to tell me what subsidies you think the USPS gets, since it seems to be a central focus of your argument.

Regardless, there is every reason to think rates would go up for delivering letters, as none of the other shippers are anywhere near equipped for dealing with that kind of volume. Are you aware that USPS is the third largest employer in the country? And that they have the largest civilian fleet of vehicles in the world? I fail to see how anyone could fill that gap and make it profitable. What would most likely happen is rates would either stay the same or go up, and hundreds of thousands of delivery points would simply vanish, leaving large chunks of less-populated areas with no viable letter service at all.

Prof. Wagstaff wrote:...maybe you shouldn't be so critical of Charter Cable and other junk-mail offenders - their junk mail is helping you get lower parcel rates!
I'm not critical of junk mail, in general. I happily accept plenty without complaint (heck, I like some of it.) But 1) I stopped subscribing to Charter services 15+ years ago because they have terrible service, so I already dislike them, 2) they send far more junk mail to me than any other single source (who else sends 3-4 pieces a week?), and 3) I've asked them nicely to stop and they won't. So fuck'em.
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Re: Privatize the USPS?

Postby ArturoBandini » Wed Jan 09, 2013 9:06 pm

Prof. Wagstaff wrote:The only subsidies USPS gets that I am aware of are to help pay for services to the disabled and overseas voters. Other than that, they haven't received a dime in tax dollars since the '80s.
You brought up the idea of subsidization in the previous thread. It doesn't matter what the types or magnitudes of subsidies are for the purposes of my argument. I don't take particular offense at the specific subsidies enjoyed by the USPS, but they should be removed and other subsidies preemptively resisted. I'm glad that the USPS operates largely self-sufficiently.
Prof. Wagstaff wrote:The monopoly protection is in place to guarantee that every U.S. citizen gets the same service and rates as every other citizen. I think that's a good thing. You disagree. Not really much more to discuss, is there?
The disagreement is whether or not monopoly privileges are the best or only way of achieving a satisfactory postal system. Even if the current system is satisfactory, you don't even want to entertain the possibility that an alternative system could be better?
Prof. Wagstaff wrote:Of course part of my advocacy is self-interest. I admitted as much already. And what the fuck is "if that is indeed true" supposed to mean?
You said earlier that you would "almost assuredly be put out of business" if the USPS were privatized. I'm not convinced that such a result is inevitable.
Prof. Wagstaff wrote:I earn my living boxing and shipping. If my customers suddenly had to pay more, it would decrease my business. I know this is true, because it happened post-9/11 when overseas Surface Mail ceased to exist. Now everything goes Priority Mail by plane, and I lost a lot of regular customers who could no longer afford the shipping costs. And yes, I've checked -- it's still more expensive to go with other shippers overseas.
OK.
Prof. Wagstaff wrote:I guess at this point you need to tell me what subsidies you think the USPS gets, since it seems to be a central focus of your argument.
I'm arguing primarily against monopoly privileges for letter carrying. Subsidies are incidental to the discussion. I realize that direct subsidies are a tiny part of USPS revenues. However, monopoly privileges on the most common form of postal communication can be considered a subsidy of sorts, and the magnitude of this commerce is on the order of tens of billions of dollars.
Prof. Wagstaff wrote:Regardless, there is every reason to think rates would go up for delivering letters, as none of the other shippers are anywhere near equipped for dealing with that kind of volume. Are you aware that USPS is the third largest employer in the country? And that they have the largest civilian fleet of vehicles in the world? I fail to see how anyone could fill that gap and make it profitable. What would most likely happen is rates would either stay the same or go up, and hundreds of thousands of delivery points would simply vanish, leaving large chunks of less-populated areas with no viable letter service at all.
Having a large number of employees, a large number of vehicles, and a large number of facilities to maintain are all liabilities that could drive USPS prices up, not down. A competitor with a novel business model might be able to deliver satisfactory services with much lower capital expenditures and fewer long-term liabilities. I agree that the scale of the present USPS would be hard to match, but there is nothing that requires the best postal system to be monolothic with the same provider for all locations, nor that the best system operate at exactly the same scale as the present one. If minor post-offices were to close their doors, this would have both negative and positive consequences that would not be distributed equally for postal customers/taxpayers. I'm OK with that. The United States government spent the previous century subsidizing sprawling development patterns and this should stop.
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Re: Privatize the USPS?

Postby Prof. Wagstaff » Thu Jan 10, 2013 11:16 am

ArturoBandini wrote:Even if the current system is satisfactory, you don't even want to entertain the possibility that an alternative system could be better?

Sure, I'm happy to entertain that possibility.
But 1) the evidence so far is that alternatives are not better -- USPS does a better job delivering packages than their competitors, so what makes you think letters would fare better in the hands of others?
And 2) how about we wait until a better alternative is proposed before dismantling the best system in the world?

ArturoBandini wrote:You said earlier that you would "almost assuredly be put out of business" if the USPS were privatized. I'm not convinced that such a result is inevitable.

"Almost assuredly" and "inevitable" are not synonymous.

ArturoBandini wrote:I'm arguing primarily against monopoly privileges for letter carrying.
Yes, but why? What do see in the current system that needs improvement? Are letters being routinely lost? Are they being routinely damaged? Are people unable to get deliveries in their areas? Are costs too high? What about the current system needs fixing beyond your steadfast belief that all monopolies are inherently wrong?

ArturoBandini wrote:...monopoly privileges on the most common form of postal communication can be considered a subsidy of sorts, and the magnitude of this commerce is on the order of tens of billions of dollars.
Uh-huh. So what?
Can you explain why it would be better for a different company (or companies) with fewer employees to be making those billions? How would private companies trying to create high profits for their owners benefit mail service, exactly?

ArturoBandini wrote:Having a large number of employees, a large number of vehicles, and a large number of facilities to maintain are all liabilities that could drive USPS prices up, not down.
If you assume the only goal is to profit, perhaps you are correct. Have you considered that the actual goal, however, is to guarantee that every single U.S. citizen has access to the same prices and service, regardless of geography?

ArturoBandini wrote:If minor post-offices were to close their doors, this would have both negative and positive consequences that would not be distributed equally for postal customers/taxpayers. I'm OK with that.
I'm not.
Basic First Class postage has always been the same for all citizens, no matter their location within U.S. territory, and I absolutely believe that's the way it should stay. And damn right everyone should have access to a local post office. That's the price of the monopoly you decry: the legal obligation to serve all Americans uniformly, regardless of geography. I don't really care why you are opposed to that, but unless you can point to a proposed system that would work without a drop in quality of service or higher postage fees, I can't think of a single compelling reason to start dismantling the USPS.
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Re: Privatize the USPS?

Postby wack wack » Thu Jan 10, 2013 11:51 am

What former government agencies or services have been privatized to resounding success?
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Re: Privatize the USPS?

Postby fisticuffs » Thu Jan 10, 2013 11:54 am

What former government agencies or services have been privatized to resounding success?


All of them, always. Exceptions to that rule need to be rooted out and destroyed for the sake of ideological purity regardless of the cost.
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Re: Privatize the USPS?

Postby Henry Vilas » Thu Jan 10, 2013 12:58 pm

Why stop at the USPS? How about privatizing our roadways and allowing the owners to set up toll booths on all of them? I'm sure that Arturto would be all for it.
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Re: Privatize the USPS?

Postby Stebben84 » Thu Jan 10, 2013 1:03 pm

Henry Vilas wrote:Why stop at the USPS? How about privatizing our roadways and allowing the owners to set up toll booths on all of them? I'm sure that Arturto would be all for it.


Ha, I had a staunch libertarian co-worker who was all for that. It didn't involve toll booths, but he did argue the owner could allow only who he/she wanted on the road. Let's just say we had many a debate at work.
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Re: Privatize the USPS?

Postby ArturoBandini » Thu Jan 10, 2013 1:06 pm

Wags, I think it's funny how on this issue you are taking a deeply conservative stance - "things are just fine the way they have always been and any change would mean disaster!"

Otherwise, we've come to the nugget of disagreement one the issue, which is about the mandate for universal service and the corresponding monopoly protection for letter service. I don't think either of us is going to change the other's mind on that issue. We'll see what the future holds - I foresee a USPS with steadily declining revenues, or at least revenues that don't keep pace with growing liabilities, leading to eventual crisis and taxpayer bailout. Privatization could prevent this from happening, or barring that, perhaps induce it to happen faster and more efficiently (like pulling off a band-aid).

Successful privatization of state-run business.

fisticuffs, I freely recognize that not all privatization attempts are successful, and for varying reasons. Here is one such example, and I think I deserve extra points for finding an article that includes your username.
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Re: Privatize the USPS?

Postby O.J. » Thu Jan 10, 2013 1:10 pm

That's right, privatization was invented by the Nazis.

Good afternoon, Mr. Godwin.
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Re: Privatize the USPS?

Postby Prof. Wagstaff » Thu Jan 10, 2013 1:16 pm

ArturoBandini wrote:Wags, I think it's funny how on this issue you are taking a deeply conservative stance - "things are just fine the way they have always been and any change would mean disaster!"

I fail to see what's funny about suggesting that unless something is broken, it doesn't need to be fixed.

ArturoBandini wrote: We'll see what the future holds - I foresee a USPS with steadily declining revenues, or at least revenues that don't keep pace with growing liabilities, leading to eventual crisis and taxpayer bailout.
The only serious threat to the ability of USPS to continue to function is the underhanded attempt by Congressional Republicans to force privatization via the unfair burden of The Postal Accountability and Enhancement Act which requires $5.5 billion/year be paid into an account to pre-fund retiree health-care 75 years into the future. No other agency has such a ludicrous mandate and that, and only that, is what is currently crippling USPS financially.
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Re: Privatize the USPS?

Postby Mean Scenester » Thu Jan 10, 2013 1:20 pm

ArturoBandini wrote:I foresee a USPS with steadily declining revenues, or at least revenues that don't keep pace with growing liabilities, leading to eventual crisis and taxpayer bailout. Privatization could prevent this from happening, or barring that, perhaps induce it to happen faster and more efficiently (like pulling off a band-aid).

Ah, brilliant. So your "solution" will work one of two dichotomous ways, you're not sure which. Either it will save the post office or kill it off more expeditiously. Seems like if you had any credibility or clue what you were yammering about, your solution might produce results less resembling a coin toss.

You might want to read this:

http://www.pbs.org/wnet/need-to-know/fi ... ice/11433/

How 'bout we roll back that ridiculous 2006 Congressional mandate and stop having these ridiculous debates about a solution in search of a problem? Don't we have real shit to worry about?
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Re: Privatize the USPS?

Postby ArturoBandini » Thu Jan 10, 2013 1:21 pm

Henry Vilas wrote:Why stop at the USPS? How about privatizing our roadways and allowing the owners to set up toll booths on all of them? I'm sure that Arturto would be all for it.
There have been books written on this subject.

You might look to the successes of congestion pricing in toll lanes in Los Angeles or Chicago to see how market thinking in roadways can make infrastucture better for everyone. This is not pure privatization, but it is an example of providing a variety of services at market prices paid directly by the user. It is NOT a model like postal letter service, where everyone gets the same price, there are no alternatives, and everyone gets the same service.
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