The End of the Phony Express, or: The USPS Goes Postal On Our Economy

by Bill Walker

Previously by Bill Walker: The Wealthy Live Without Government

The USPS employs a larger horde than Genghis Khan: 656,000 union members driving 260,000 vehicles. It is the second-largest employer in the United States after Wal-Mart. It has a government-granted monopoly on first class mail. In 2007 an FTC report noted that the service does not pay taxes, including property tax on its 38,000 facilities; does not pay vehicle registration fees, and can borrow at subsidized interest rates from the U.S. Treasury.

And they do borrow… which is how they get away with claiming that they are "not subsidized". They don’t get subsidies (except in some years, when they do), they just get loans… and more loans… and more loans. Maybe they should join up with Bank of America or Goldman Sachs and add subprime mortgages to their services at the stamp window.

In 2010 the USPS lost $8.5 billion dollars by its own accounting. These enormous losses were covered by these taxpayer-financed "loans", which it has no intention of repaying. It also has failed to fund its pension account, which is billions in arrears. Now it wants to reduce services, increase prices for magazine delivery, and would also like some more direct subsidies. And no doubt, some more loans.

According to Martha White of msnbc.com, the USPS horde carries… 15% of all parcels. (The vast majority of packages are delivered by two private companies. UPS has about 400,000 employees, FedEx about 140,000, and of course the companies pay taxes). So the vast USPS army isn’t actually vital to the day-to-day operations of US business at all. If the USPS disappeared tomorrow, UPS and FedEx would simply take up the slack without blinking. The USPS could sink beneath the waves of bankruptcy without a ripple.

The only argument the USPS makes in favor of its permanent drain on the US economy is that it provides "universal service". What that means in practice is that the millionaires living off the road around Lake Coeur d’ Alene get a cute little boat to deliver junk mail to their boat docks. Less important people in NH rural areas get "delivery" to the end of their road (under the %$#! snowdrift), if we’re lucky. Why it is vital for working people living in cities to subsidize millionaire boating enthusiasts or eccentric New Hampshire woodsmen such as myself is not clear. Nor is it clear that private companies wouldn’t leap at the chance to deliver first class mail very cheaply if it meant they could also deliver advertising… in a free market I might have to modify my woodstove to run on junk mail.

The more sinister side to "universal service" is that the Postal Service was historically a vehicle for implementing censorship. Anti-slavery literature, birth control information, and antiwar publications have all been subject to postal censorship. Monopoly meant that you couldn’t just choose another carrier; your ideas were blocked.

So if the USPS isn’t necessary for package delivery, and the only reason that UPS and FedEx aren’t delivering our mail is that they aren’t allowed to… why not just let the Phony Express out of the corral? Make it a private corporation, give the employees the stock, and let it compete.

Would this be "fair"? No, of course not. The union employees don’t deserve ownership of the postal infrastructure; it was all paid for by the taxpayers. However, just because the USPS is overstaffed and overpaid, it controls a lot of votes. This political strength is the only reason the USPS still exists. If we could eliminate the albatross by giving away the USPS infrastructure, it would be a great deal for the taxpayer… after all, right now it’s costing us nearly ten billion a year to subsidize it.

Once the USPS is privatized, it will have to pay taxes, and then those 656,000 employees will suddenly have a whole different viewpoint on how high taxes should be. The toxic political effects of having a privileged state monopoly in the middle of US society will be gone.

This is the perfect time to privatize all the sacred monopoly cows. Our country is bankrupt, and even most politicians want to have a functioning economy from which to steal. Look at Jimmy Carter; after his overspending and inflation drove the economy into a recession, he deregulated airlines and trucking, eliminating price controls and route allocations in both industries. There is no reason our current politicians couldn’t emulate his example (although it might be easier for this to happen if Americans remembered that it was a depressed and humbled Carter that freed those industries, not the deficit-boosting Saint Reagan).

The USPS isn’t the only bovine monopoly grazing on our economy; there are also power companies, cable companies (oddly enough, cities and states with competing cable companies have lower cable prices), local phone companies, water utilities, and other Soviet-style organizations. And what is the common factor shared by all these monopolies? They’re all implemented by governments, without whose help these inefficient dinosaurs would be quickly eaten by customer-service-driven competitors.

The only monopolies we have in this country are those created by government. Telephone, electric power, cable TV, first class mail, and other monopolies weaken our economy and make us more vulnerable to loss of service in disasters. (How is it good that everyone in an area loses power or phone service at the same time? How many lives have been lost because of lack of ‘redundancy’ and backups, i.e., competition?)

End all government monopolies, and let everyone compete on their own merits.

September 22, 2011

Bill Walker [send him mail] is the co-chair of the Ron Paul campaign in Sullivan County NH. He is active in the NH Liberty Alliance.

Copyright © 2011 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

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