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Time Has Come to Stamp Out the Postal Service's Monopoly
by J. H. Huebert

The Baltimore Sun
May 15, 2007

So the price of a stamp has gone up again, for the second time in two years. Yet Postmaster General John E. Potter expects us to be OK with that because he has a new gimmick this time around. His gimmick is the "forever" stamp, which will remain valid even after the inevitable next price increase.

But that's not much of an advantage over the old stamps. After all, "forever" stamps are still only good for buying the same old inefficient, overpriced service you've always gotten at the post office, whether you get it now or in 10 years.

Mr. Potter knows there are bigger problems than a new stamp can fix. He expects that the post office will run a staggering $5.2 billion deficit this year.

Mr. Potter also told the House Oversight and Government Reform Committee's postal subcommittee that "the dynamics of the 21st century communications market have altered - forever - the basic assumptions of postal economics."

Why, then - given the "dynamics of the 21st century communications market" - do we have a government-run post office at all?

Sure, government is growing and putting its nose into all sorts of new things all the time, but there are very few businesses the government runs entirely, as it does with first-class mail delivery.

Most of the important stuff Americans buy - food, clothing, and shelter - is produced almost entirely by the private sector. The result? Nearly everyone is fed, clothed and housed.

What's so special about mail delivery that the government must do it? No one seems to have a good explanation. It's in the Constitution that the federal government can create post offices - but it doesn't say the government has to do that, and it certainly does not legalize any postal monopoly.

But that's exactly what it is, a monopoly, because only the post office is allowed to deliver first-class mail.

Yes, companies such as FedEx and UPS can deliver packages, which could include letters - but they are limited by law to "extremely urgent" letters (such as overnight deliveries) and forced by law to keep their prices much higher than those of the post office. The postal monopoly costs you, me and all of us who have no choice but to be the post office's customers if we want to send standard letters, and yet the post office still can't come close to breaking even.

Meanwhile, the inflation-adjusted cost of other things has plummeted. Consider how much a long-distance telephone call costs compared with 10, 20 or 30 years ago. The price of gasoline seems to keep going up, but adjusted for inflation it has mostly gone down over the decades.

Sure, the post office can go on pretending it's a business. Postmaster General Potter can talk about the dynamics of the "communications market" and dealing with "competition."

But none of that make-believe will change the fact that the post office is an outrageously inefficient government monopoly, which exists only because the law protects it from real competition or even the consequences of its perpetually poor management.

Strip the post office of its special privileges. Then we would see what kind of "business" it's capable of. In all likelihood, under those circumstances, it would quickly become extinct.

Nothing, not even the "forever" stamp, is really forever. If it can't function as a truly private business, then it's time for the post office to step aside and let the private sector take over.


2007 The Baltimore Sun