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Sunday, January 15, 2006

Fixing the Postal Service?

The Washington Post did an article yesterday on the Postal Service, it's problems, and some possible solutions. Doug over at Below the Beltway has a pretty good rant up on the idea of privatization of, or at least competition for the Post Office. I started to write a response there, but on the fourth paragraph I decided it should probably be it's own post.

I thought about this a while back, probably at the last rate increase. I'd love to see some competition for first class mail, but finding competition that would cover ALL the area the post office does would be impossible.

Finding companies to compete in cities over 30 or 40 thousand, and bigger probably wouldn't be that hard. But smaller cities, and towns, and villages would be difficult, if not impossible. They aren't cost effective for what the post office does. The volume the USPS does in New York is huge, and covers the cost of doing it in Bumstump, Idaho.

If we break the service up, bring in competition, they'll take the bigger cities, no problem. But we'll still have to have a USPS to cover the areas that normal businesses just don't see a profit in covering. Unless we are going to tell those areas they no longer have mail service.

What that leads to is either a huge taxpayer subsidy to cover delivery to the undesirable areas, which the current iteration of the Postal Service doesn't get (they are required to be self sustaining by law). Or it could lead to a huge price increase for those folks, because they chose not to live in a big enough city, if we keep the current rules.

Then there is the other problem with competition not covering everything, that cross over zone. Who's responsible for my mail, my 1040, or my electric bill if it leaves Carrier 1's area and goes to Carrier 2's area? Even with competitors, there will still have to be some sort of "central clearing house for mail", who runs it? Who's responsible for my tax form when it doesn't show up in Kansas City on time?

What I'm getting at is the current Postal Service has warts, but in trying to fix them we have to make sure we aren't growing tumors. They need some institutional change, the Union needs to be more flexible in some of it's operations at the USPS, so does management. But this is a case, where I, an anti-big-government, anti-monopoly guy thinks that one group running the operations is a better idea than a bunch of competing groups.

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