Privatize the US Postal Service before it collapses

Privatize the US Postal Service before it collapses
© Getty

The Postal Service is a large government agency America uses to deliver catalogues we never ordered. It’s hemorrhaging money, and whenever it comes up with solutions to stay relevant in an age of free, instantaneous communication, Congress reliably jumps in to scuttle reform. The best way to fix the Postal Service isn’t to keep it tethered to bureaucrats afraid of change or unions. It’s to privatize it.

Our technocrat friends over in Europe have been doing just this, selling off large chunks of calcified government for decades. In 1995 Germany privatized Deutsche Post. The Dutch, Belgians, and Austrians have privatized their own postal services, with respective governments retaining some of the stock. Between 2013 and 2015 the British sold off the Royal Mail and its iconic red wall boxes, ending five centuries of public ownership. The mail still gets delivered.

ADVERTISEMENT
A significant part of their postal liberalization was ending postal monopolies, as we currently maintain. In the United States only the Postal Service can act as a letter carrier — competition is forbade by law. Private companies are allowed to deliver “extremely urgent” mail at a minimum of $3 or twice the first-class rate, which is the loophole FedEx and UPS operate out of. They can’t compete with the Postal Service on postcards or regular mail and packages.

On top of this monopoly the Postal Service doesn’t pay taxes, is exempt from local zoning rules, and has access to low-rate loans from the Treasury. Despite these many perks, it regularly bleeds red ink. It lost $5.6 billion in 2016, and a whopping $50 billion since 2007. The grim specter of $121 billion in unfunded liabilities looms over its future. Because the Postal Service is self-funded public corporation, it’s going to run out of cash unless something drastic happens. When the moment of reckoning comes, Congress can either bail it out or shrug and suggest constituents sign up for Gmail.

Most of them have already, of course. Today anything immediately pressing is sent through email or over the phone. The Postal Service is left to handle the junk mail. Indeed half of everything it delivers is advertising, and less than 5 percent of mail is actual personal correspondence. With the advent of cheap, ever-present electronic communication, the agency has morphed into a multi-billion dollar spam folder.

Outbox, a private company, once recognized this glut of unwanted junk mail as a business opportunity. It offered a service to receive people’s letters, then scan and email their contents. Customers could select letters they physically wanted, and download or delete the rest. The Postal Service reportedly refused to work with Outbox, which subsequently went out of business.

The Postal Service did partner with Staples at one point, to bring miniature USPS retail counters to the chain. Customers could send mail at the same location they make copies and buy office supplies from, and presumably purchase more USPS services. Because Staples personnel would man the desks, however, the American Postal Workers Union fought vigorously to stop the relationship, and it collapsed in 2013.

Much of the time, however, the Postal Service makes a valiant effort to be adaptive and solvent, only to watch the government hobble its efforts. There are more than 30,000 post offices in America, more than all Starbucks and McDonald’s combined. Most of them lose money. Understandably, the Postal Service moved to shutter some of these unprofitable branches and sell the real estate, as any business would. Congress ordered them not to.

The Postal Service considered retiring its unprofitable Saturday deliveries. Again, Congress told the agency it could not.

Should the Postal Service wish to boost revenue by increasing its rates, the nine-member Postal Service Board of Governors must authorize the change, which it presently cannot, because President TrumpDonald John TrumpNFL freezes policy barring players from protesting during anthem McConnell spokesman on Putin visit: 'There is no invitation from Congress' Petition urges University of Virginia not to hire Marc Short MORE has yet to appoint nominees for two of its slots.

Government oversight of the Postal Service is more hindrance than help. Given its struggle to stay solvent, let alone relevant, in a ubiquitously digital world, we would do well to liberalize our mail and cut the Postal Service loose.

Andrew Heaton is a producer at Reason TV, and the host of the comedy webseries “Mostly Weekly,” which recently covered privatizing the Postal Service. He is a media fellow of the R Street Institute and the author of “Laughter is Better than Communism.”